Platform Liability

EU Copyright Directive: the liability of platforms for hosting infringing content was a major theme of 2021. In June 2021, the CJEU ruled that a video-sharing platform is only directly liable for content uploaded by its users when it acts in full knowledge of the dissemination of the copyright works on the platform. Read more on the judgment here. However, the impact of the decision was superseded by national implementation of Article 17 of the EU Copyright Directive, which sets out a detailed liability framework for “Online Content Sharing Service Providers”. The highly controversial Article 17, has now been implemented in a number of EU member states. Read our articles on implementation in Spain, France and Germany. However, the Directive left scope for interpreting Article 17, so there will be differences in the way it has been implemented nationally. As a result, we expect that references to the CJEU on the scope of the obligations (and indeed which providers are caught by the provisions) will flow in 2022. A sub-plot also rumbles on : Poland has challenged Article 17 with an action for annulment and the case is proceeding to the CJEU with the decision expected in 2022. Read our article on the AG Opinion here.

EU Digital Services Act: online service providers, such as social media and video-sharing platforms, will also need to grapple with the EU proposals in the Digital Services Act, aimed at clarifying responsibilities and safe harbours applicable to online service providers, including a harmonized notice and take down procedure in relation to hosting infringing content. The draft DSA was published at the end of 2020 but following a raft of amendments proposed by the EU Parliament and Council and EU member states throughout 2021, a new draft is now expected in early 2022. Read our summary of the proposals here and our update here. Also take a look at our dedicated topic centre for more information on the DSA.

The UK framework: since the implementation date for the EU Copyright Directive fell after the UK had exited the EU, the UK government was not required to implement the Directive and the government has said that it does not intend to. The UK’s focus in 2021 has been its domestic agenda for an 'online harms' regulatory framework, which will put a duty of care on certain companies, including hosting providers, to protect their users from harmful content. However, harmful content does not include copyright infringing content. In relation to infringing content, the UK appears to be keeping its paper dry while it watches how EU member states implement Article 17 and the impact on the various stakeholders.

Copyright and new technology

Text and data mining: we think issues involving copyright and new technologies, such as AI and blockchain, will take centre stage for 2022. The EU Copyright Directive contains new exceptions to copyright infringement for text and data mining, specifically to help promote AI research. You can read more on the TDM exceptions here. In 2022, we will see these exceptions, which have been implemented by a number of EU member states in 2021, start to be tested by users and creators of AI tools.

The UK already had an exception to copyright infringement for text and data mining for the purposes of non-commercial research. However, the UK IPO is now consulting on a number of options, with the aim of encouraging innovation using AI, including whether to extend the existing UK TDM exception to cover commercial scientific research or adopt a broader exception, with or without a rights holder opt-out, which would bring the UK more in line with the TDM exceptions in the EU Copyright Directive.

Ownership of copyright in AI created works: both the Commission and the UK IPO are also consulting on the question of ownership of AI created content. The EU’s general approach is that only works with a human author should be protected by copyright (or patents). The UK is currently one of the very few countries which does protect computer-generated works without a human author and the UK is consulting on whether to maintain this approach or limit or even remove the scope of protection for computer generated works. We are likely to see policy developments on this area in both the EU and the UK in 2022. Read our article on the UK IPO Consultation on AI here.

Upcoming EU legislation: the EU is taking a broad approach in regulating AI. As part of the AI strategy, already developed in 2018, the Commission published the draft for the Artificial Intelligence Act in April 2021 (available here). The draft contains harmonized rules for the development, distribution and utilization of AI systems in the European Union. Thus, certain AIs are to be completely banned on the basis of their risk, while others are to be regulated depending on their level of risk to fundamental rights. Besides that, AI will be a part of the Digital Services Act with regard to the notice-and-take-down-requests – this can be seen in the fact that the EU Commission has also included resources in the DSA draft to study the impact of large AI systems.

Rights data management:  buried in the EU’s IP Action Plan is a reference to the Commission’s goal to improve the current systems for licensing and sharing of copyright works, including the use of new technology, such as AI and blockchain, in rights management and licensing copyright works. The Commission has launched a study on copyright data management and AI, the results of which will likely be published in 2022 and we expect the topic of new technology and rights data management to garner some interest as a result. This may also feed into approaches taken to the licensing arrangements between rights holders and online content sharing platforms in the context of the framework for liability of platforms under the EU Copyright Directive and the DSA.

Communication to the Public

2021 saw a number of key cases in Europe and the UK on the interpretation of the right of ‘communication to the public’. In addition to the CJEU’s ruling in Youtube and Cyando, already mentioned above, on liability of video sharing platforms, the CJEU clarified in M.I.C.M. that the distribution of unlawful content using P2P software constitutes communication to the public. The CJEU held that it is irrelevant that the users only share parts of the entire work and whether or not they are aware of this. Read our article on the decision here. We also had key decisions in the context of hyperlinking and framing, including the CJEU’s judgment in VG Bild-Kunst, and the UK Court of Appeal decision in Warner Music v TuneIn, both of which explored ways in which using the techniques of linking to and framing third party content on the internet can still amount to acts of ‘communication to the public’. The UK Court of Appeal in Warner Music v Tunein were unanimous in finding that it was not necessary or desirable for the UK Court to depart from the CJEU’s jurisprudence on the right of ‘communication to the public’, following Brexit.  In fact, the Court of Appeal applied the existing CJEU case law and even took into account as highly persuasive the new CJEU decision (VG Bild Kunst) decided after the UK's withdrawal date of 30 December 2020.  At least for now, it shows that the UK Courts are likely to remain closely aligned to the EU approach on copyright, absent UK Parliament taking forcing change by legislation. Read our article on the developments here.

Blocking Injunctions: In the UK, Warner Music v TuneIn has already been applied in the context of blocking injunctions, in the recent case of Columbia Pictures (Columbia Pictures Industries Inc. & Others v. British Telecommunications PLC & Others [2021] EWHC 2799 Ch). The UK Court granted a blocking injunction against the 6 leading UK ISPs in respect of 5 target websites, who were making available vast quantities of copyright protected film and television content through links (including embedded players) to third party sites, including content owned by the 6 applicant movie studios.  Applying Warner Music v TuneIn, the activities of the target sites, including enabling users to easily search for and access content and providing additional information about the movies (genre, age rating etc.), amounted to a “communication to the public”.

In Germany, in addition to the possibility of bringing claims before the courts for blocking injunctions, various rights holders have joined forces with the major Internet providers and created an out-of-court decision-making body - the CUII (Clearingstelle für Urheberrechtsverletzungen im Internet - Clearing body for Copyright Infringements in the Internet). The creation of it was welcomed by the German government, among others. In a two-stage procedure, DNS blocking injunctions of structurally copyright-infringing websites can be obtained more quickly than in court from the Internet providers involved. So far, 6 different website operators are affected by such DNS blocking injunctions, which includes a total of 30 individual domains.

In France, blocking injunctions can lodged before courts and also before the Regulatory Authority for audio-visual and digital communication (ARCOM), the newly created authority which results from a merger of the High Authority for the Distribution and Protection of Intellectual Property on the Internet (HADOPI) and the Higher Audio-visual Council (CSA). You can read more on ARCOM here.

Brexit and exhaustion of rights

When the UK left the EU, the UK and the EU agreed that both parties are free to determine what exhaustion regime should apply to their territories. Since 1 January 2021, the UK has applied a one-way regional EEA regime, which means that once a product, such as a book, has been legitimately placed on the market in the EEA, that product can continue to be re-sold into the UK, without being prevented by the rightsholder. However, the EU may allow rightsholders to restrict the importation of certain goods from the UK into the EEA that have not previously been put on sale in the EEA. In effect, this has left the UK with a one-way exhaustion regime, until the UK decides on a future regime.

The UK government ran a consultation on the UK’s future regime for exhaustion of intellectual property rights, which closed on 31 August 2021. Read our article here. It is consulting on a number of options, including: maintaining the one-way regional EEA regime; moving to an  international exhaustion regime or moving to a mixed regime (where specific goods or rights may be subject to different regimes).  Which option the government chooses will have significant consequences for UK manufacturers importing goods (or parts) into the UK and enforcement by the rightsholder in other countries. Whilst we expect the government will opt to maintain the current one-way EEA regional regime, there is no certainty and we expect rights holders will be keeping a keen eye on the developments in 2022.

Authored by Penelope Thornton, Joel Smith, Morten Petersenn, Nils Peters, Alastair Shaw and Aissatou Sylla.