Reed Smith Client Alerts

Copyright law in Europe is changing. In a client alert last year we highlighted the European Commission’s plans to tackle what some content owners have termed the ‘value gap’, as well as complaints of unfair practices in the remuneration of rightsholders, with its proposal for a new directive on copyright in the Digital Single Market (the Proposed DSM Directive). As the Commission’s plans crystallise, it seems increasingly likely that such a directive will bring with it a fundamental shift in the way that copyright law in Europe treats Information Society Service Providers (ISSP) which seek to benefit in any way from the current ‘safe harbour’ protection afforded by the E-Commerce Directive and, to a lesser extent, the InfoSoc Directive.

Authors: Gregor Pryor Hunter H. Thomson Eleanor Brooks

Background to safe harbour

The E-Commerce Directive sought to address the issue of ISSPs being subject to intermediary content liability in circumstances where active and exhaustive monitoring by such providers of their services for copyright-infringing material was a practical impossibility. To illustrate the issue, Ronan Harris (Google UK’s Managing Director) recently confirmed that 400 hours of video are uploaded to YouTube every minute. It would be extremely labour-intensive to analyse each hour of video for the presence of copyright-protected works at this upload rate. Foreseeing the potential scale of this problem, the EU Parliament and Council adopted the E-Commerce Directive in June 2000, creating a set of ‘safe harbours’, whereby ISSPs were not liable if they unknowingly hosted, cached, or acted as mere conduits for copyright-infringing material, subject to certain requirements. Generally, liability would only arise where ISSPs were put on notice of the infringing material and failed to act expeditiously to remove or disable it. The InfoSoc Directive, adopted the following year, also provides an exemption of intermediary liability where the infringing reproduction of protected works is transient or incidental, and an integral and essential part of a technological process, subject to certain requirements.

The law as it stands (challenges to the principle)

Before analysing the Proposal, it is worth briefly reviewing the current legal position on the protections afforded by the concept of safe harbour. In Google France, the claimants claimed that the Article 14 ‘hosting’ defence was not available to Google as a search engine service providing hyperlinks should not be classified an ISSP, and the advertising activity in question should not constitute ‘hosting’. In determining whether the defence was available to Google, the CJEU examined whether the role played was neutral, i.e., merely technical, automatic and passive. The question to be answered was whether the ISSP had “played an active role of such a kind as to give it knowledge of, or control over, the data stored”. The facts that: (i) Google received remuneration for advertisers’ use of its system; and (ii) the system automatically matched the two sets of data in response to each search query, were found by the CJEU to be insufficient to deprive Google of its Article 14 defence. However, the CJEU did not specify exactly what kind of conduct would be considered more than merely technical, automatic and passive.