Five considerations for the transposition and application of Article 17 of the DSM Directive

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Nearly two years have passed since the adoption of the Directive on copyright in the Digital Single Market 2019/790 (DSM Directive). As it was probably bound to happen, the discussion of its content – notably of its Article 17 – is no less heated now than in 2016-2019, that is the period between the release of the Commission’s original Proposal and the adoption of this piece of EU copyright legislation.

Member States have until 7 June 2021 to transpose the Directive into their own laws, though delays are likely to occur due to a number of reasons. Besides the disruption caused by the ongoing COVID pandemic, the publication of the Commissions’ Guidance on the application of Article 17 (see Article 17(10)) has been also postponed to a later time than originally expected. In the meantime, different positions have emerged regarding the interpretation and application of this important and complex provision, with contributions made by interest groups, activists, scholars, and government-appointed experts alike.

In this post, I would like to tackle five key points regarding Article 17 and take position in the context of a debate in which contrasting and – in some cases – highly polarized views have been presented. They are:

1. The nature of the right of communication to the public in Article 17;
2. The possibility for Member States to envisage de minimis exclusions from the application of Article 17;
3. The nature of exceptions or limitations in Article 17(7);
4. Ex ante blocking of content and the role of the complaint and redress mechanism in Article 17(9);
5. The position of users whose content has been unduly blocked.

Also because of the approaches in certain implementation drafts at the national level, an important debate that has emerged further to the adoption of the DSM Directive is that concerning the legal nature of the provision vis-à-vis Article 3 of the InfoSoc Directive 2001/29.

Some commentators have argued that the nature of Article 17 would be that of a special right or even a new sui generis right. In turn, this latter interpretation would mean that national legislatures would not be bound to comply with the list of exceptions and limitations in Article 5 of the InfoSoc Directive and could even introduce their own exceptions or limitations to the right of communication to the public under Article 17.

In his 2020 Opinion in the pending YouTube/Cyando cases [Katpost here], Advocate General Saugmandsgaard Øe held the view that, whilst the platforms at issue in those references (YouTube and cyberlocker Uploaded) would be liable in principle under Article 17 lacking a licence, the same would not be true under Article 3 of the InfoSoc Directive alone. In this sense, Article 17 of the DSM Directive would be a novel regime without retroactive application.

The Draft Commission Article 17 Guidance states that, based on the wording of recital 64, Article 17 would be a lex specialis to Article 3 of the InfoSoc Directive and Article 14 of the Ecommerce Directive 2000/31. As such, Member States would not be able to rely, in their transpositions of Article 17, on their earlier implementations of either directive with regard to the notion of ‘authorization’ or ‘communication to the public’.

As I also discussed here, this understanding of the relationship between the InfoSoc and DSM directives should be rejected, including by the Court of Justice of the European Union (CJEU) when it decides YouTube/Cyando. The relationship between these two directives is special only insofar as the treatment of certain liability aspects is concerned:

• First, save for what is provided for in Article 24, Article 1(2) of the DSM Directive lists the InfoSoc Directive among the pieces of EU legislation that are left intact and in no way affected by it;
• Secondly, recital 64 states that the DSM Directive clarifies that providers that satisfy the definition of online content sharing service provider (OCSSP) do perform copyright-restricted acts, including acts of communication/making available to the public. It does not suggest that only providers that fall under the notion of OCSSPs may perform acts of communication to the public or other restricted acts;
• Thirdly, still from recital 64, it follows that the concept of communication/making available to the public referred to – and not defined – in the DSM Directive does neither alter the corresponding notion in other EU legislation nor does it affect the application of Article 3 of the InfoSoc Directive (or, e.g., Article 8 of the Rental and Lending Rights Directive 2006/115) to providers other than OCSSPs.

All the above indicates that the concept of communication/making available to the public in Article 17 is to be interpreted in accordance with the corresponding concept in inter alia the InfoSoc Directive. In addition, settled case law provides that identical concepts in different directives should be attributed the same meaning.

Article 17 does not create a ‘sub-category’ of the communication to the public right in Article 3 of the InfoSoc Directive or a sui generis right: it is the same right. In turn, this means that Member States are not entitled to alter the scope thereof or to introduce exceptions or limitations to Article 17 beyond what EU law does allow (in this sense, see also here).

To fall within the application of Article 17, an information society service provider (ISSP) must inter alia “store and give access to a large amount of copyright-protected works or other protected subject matter uploaded by its users” (emphasis added).

Like the original Commission’s Proposal, the Directive does not define the notion of ‘large amount’. Recital 63 clarifies that the assessment of whether an ISSP stores and gives access to a large amount of copyright works and other protected subject matter is to be conducted on a case-by-case basis and take account of a combination of elements, including – but not necessarily limited to – the audience of the service and the number of files of protected subject matter uploaded by the users of such service.

Some commentators have suggested that this part of the provision would allow Member States’ legislatures “to introduce certain nuances with regard to de minimis activities”. However, nowhere does the text of the Directive envisage such possibility: national legislatures are not allowed to alter the scope of Article 17 by, e.g., introducing statutory de minimis exclusions (in substantially the same sense see also here). What the notion of ‘large amount’ does allow is solely for national courts to determine, based on the circumstances at issue and subject to fulfilling the other requirements under the notion of OCSSP, whether the ISSP at hand does in fact qualify as an OCSSP. All this is of course without prejudice to the application of the (recital 66) “specific liability mechanism” (not a safe harbour, as some commentators have instead called it) in Article 17(4), subject to satisfying all the relevant conditions therein.

Article 17(7) requires Member States to introduce or maintain in their laws exceptions or limitations for:

• quotation, criticism, review; and
• uses for the purpose of caricature, parody or pastiche

for the benefit of users when uploading and making available content generated by them on OCSSPs’ services.

Three points are worth noting here: the first is the requirement of a fair balance between contrasting rights and interests; the second is the relationship between Article 17(7) and the InfoSoc exceptions or limitations; the third is the freedom left to Member States.

Insofar as the first point is concerned, Recital 70 (see also recital 84) specifically refers to the need to strike a balance between the fundamental rights laid down in the EU Charter of Fundamental Rights, in particular freedom of expression (Article 11) and freedom of the arts (Article 13), and the right to property, including IP (Article 17). This said, in light of CJEU case law (see most recently Spiegel Online and Funke Medien), users are not entitled to invoke directly the application of the Charter rights and freedoms, lacking a specific copyright exception or limitation at both the EU level and in the applicable national law adopted in compliance with EU law. All this is without prejudice to the possibility that Article 17(7) is regarded as a provision having vertical direct effect in the event that a Member State has failed to transpose one of the exceptions or limitations therein into its own legal system (on the vertical direct effect of directives, see the classic van Duyn decision; directives cannot have horizontal direct effect).

Turning to the second point, the exceptions or limitations under points a and b of Article 17(7) are the same as those that already exist under the EU acquis (Article 5(3)(d) and (k) of the InfoSoc Directive). What is different, however, is the character of such exceptions and limitations: whilst exceptions or limitations are optional under the InfoSoc Directive (with the exclusion of temporary copies in Article 5(1) therein), under the DSM Directive they are mandatory for Member States to maintain or introduce, though solely for the purpose of Article 17 and, more precisely, for content generated and uploaded by users. In no way does Article 17(7) suggest that the exceptions or limitations in Article 5(3)(d) and (k) of the InfoSoc Directive have now a general mandatory character. Member States shall of course remain free to maintain or transpose into their own national laws the other exceptions or limitations in the InfoSoc Directive, which shall apply – where relevant – to inter alia the situations covered by Article 17.

Finally, the language of Article 17(7) is highly prescriptive. With regard to exceptions and limitations, this means that Member States are, on the one hand, required to introduce or maintain national exceptions or limitations allowing quotation, criticism, review, and uses for the purpose of caricature, parody or pastiche insofar as activities falling within the scope of the provision are concerned. A Member State does not enjoy the freedom to, say, introduce an exception for quotation but refrain from also introducing an exception for parody in relation to uses under Article 17. All these concepts are also autonomous concepts of EU law, which must be interpreted uniformly throughout the EU, without any possibility for Member States to alter the scope thereof. On the other hand, as stated, Member States do not have the discretion to introduce any exceptions or limitations beyond those expressly allowed under Article 5 of the InfoSoc Directive, which maintain – save for Article 5(1) – their optional character. In this sense, Article 25 allows Member States to adopt or maintain broader exceptions or limitations to harmonized rights, but only insofar as the resulting provisions comply with inter alia the InfoSoc Directive: in other words, there is freedom within the limits of the acquis, not beyond it.

Article 17(7) states that the cooperation between OCSSPs and rightholders shall not lead to preventing the availability of works or other subject matter uploaded by users, which do not infringe copyright and/or related rights, including – but not limited to (the work or other subject matter or parts thereof may not be protected in the first place, e.g., because the term of protection has expired or the relevant requirements for protection are not fulfilled) – where such works or other subject matter are covered by an exception or limitation. Article 17(7) does not expressly state that ‘legitimate uses’ should be allowed ex ante, rather than just ex post by relying on the redress and complaint mechanism sub Article 17(9), nor does it clarify what the legal consequences would be if a user was prevented from uploading and making available content which qualifies for protection under Article 17(7).

Complaint and redress, á la IPKat

With regard to ex ante blocking of user-uploaded content, it would be obviously preferable that, in principle, legitimate content was not blocked by the technologies applied by OCSSPs. This position is in line with that expressed by the Commission Draft Article 17 Guidance. This said, the text of the Directive is such that it is also acceptable for a Member State – from the point of view of compliance with Article 17 obligations – only to introduce a complaint and redress mechanism and not also a system of ex ante safeguards, as long as the complaint and redress mechanism is effective and expeditious (in this sense, see also here; contra here). Recital 70 indeed clarifies that the complaint and redress mechanism shall entail human review and serve in particular – though not exclusively – to users where they could benefit from an exception or limitation to copyright in relation to an upload (i) access to which has been disabled or (ii) that has been removed. Member States are required to ensure that out-of-court redress mechanisms are also available for the disputes that are outstanding further to an unsuccessful complaint.

It is not thus correct to maintain that the EU legislature would have intended that the preventive measures that an OCSSP is obliged to take under 17(4) to avoid liability can only ever or mainly be taken ex post. Rather, the history of Article 17 shows that EU legislature found that users’ fundamental rights and freedoms would be appropriately safeguarded by: (i) the provision that a licence obtained by an OCSSP also covers, at certain conditions, users’ activities; (ii) the mandatory character of certain exceptions and limitations; and (iii) the provision of a process whereby an uploader, who considers that their uploads have been wrongly blocked, has access to swift and effective redress mechanism so as to ensure they can benefit from a relevant exception or limitation.

Insofar as the legal consequences of preventing lawful uploads are concerned, one possible interpretation might be to regard the exceptions or limitations referred to therein as rights of the users, with the result that preventing the availability of works or other subject matter uploaded by users, which do not infringe copyright and/or related rights, would qualify as an infringement of user rights. Whilst supported by the language of some CJEU decisions (see, e.g., Spiegel Online and Funke Medien) and scholarly commentary, this interpretation does however neither reflect the wording of the Directive nor its rationale: neither Article 17(7) nor recital 70 refer to the exceptions or limitations for quotation, criticism, review, caricature, parody, and pastiche as ‘rights’. Furthermore, the Directive per se does not attach any particular consequences to limitations or impediments to users when performing these activities, save for the possibility – under the redress and complaint mechanism – to request that content that qualifies for protection under such exceptions or limitations is reinstated in accordance with Article 17(9) .

In light of the foregoing, it is thus appropriate to characterize the exceptions or limitations under Article 5 of the InfoSoc Directive, which Article 17(7) expressly refers to, not as ‘rights’ of users, but rather as exceptions or limitations with a mandatory character, insofar as the activities that fall under the scope of application of Article 17 are concerned.

It is sufficient to read the 10 paragraphs that compose Article 17 (as well as the accompanying recitals) to realize that this is a complex provision, the final text of which is the result of both a lengthy process and a number of compromises. However, it is now part of the EU acquis and Member States should not (and indeed may not) unduly alter the scope thereof, with the risk of interfering with the legislative action of EU legislature and creating further fragmentation in the single market.

What the provision does clearly mandate is for national courts and authorities to base their judgements on the specific circumstances at issue and ensure that the balance set at the EU level is properly safeguarded, including with regard to users and their activities. In this sense, and as a final note, the challenge launched by Poland to Article 17 before the CJEU reflects some substantial and important concerns. These, however, relate to the application of the provision, not its very existence. As such, they should be left to national courts and authorities to address. Article 17 in itself is not contrary to the Charter rights.