European Parliament approves the DSM Copyright Directive Proposal

In yesterday’s session, the European Parliament approved the proposed Directive on Copyright in the Digital Single Market [see our previous comments here, here, and a more detailed position paper, here]. MEPs voted 438-226 with 39 abstentions.

Here is the text passed – a compromise solution that slightly changes from the previous version rejected by the European Parliament back in July.

Among the most controversial provisions:

  • the text and data mining (TDM) exception has been confirmed in its original structure (limited to research organizations). The new version adds an optional additional TDM exception (Article 3a) that applies in favor of lawful users except such TDM usage has been expressly reserved by the right holder.
  • the ancillary right for press publishers (art. 11) has been slightly amended:

1. Member States shall provide publishers of press publications with the rights provided for in Article 2 and Article 3(2) of Directive 2001/29/EC so that they may obtain fair and proportionate remuneration for the digital use of  their press publications by information society service providers.

1a. The rights referred to in paragraph 1 shall not prevent legitimate private and non-commercial use of press publications by individual users.


2a. The rights referred to in paragraph 1 shall not extend to mere hyperlinks which are accompanied by individual words.

4. The rights referred to in paragraph 1 shall expire 5 years after the publication of the press publication. This term shall be calculated from the first day of January of the year following the date of publication. The right referred to in paragraph 1 shall not apply with retroactive effect.

Recital 33 specifies that “the protection shall also not extend to factual information which is reported in journalistic articles from a press publication and will therefore not prevent anyone from reporting such factual information”. This seems a bit in contrast with the provision of 2a that allows reporting only “individual words”.

  • As regards article 13, filtering obligations have been only apparently removed, since in case right holders are not happy to license their contents, UGC platforms shall cooperate to block such contents

1. Without prejudice to Article 3(1) and (2) of Directive 2001/29/EC, online content sharing service providers perform an act of communication to the public.  They shall therefore conclude fair and appropriate licensing agreements with right holders.

2. Licensing agreements which are concluded by online content sharing service providers with right holders for the acts of communication referred to in paragraph 1, shall cover the liability for works uploaded by the users of such online content sharing services in line with the terms and conditions set out in the licensing agreement, provided that such users do not act for commercial purposes.

2a. Member States shall provide that where right holders do not wish to conclude licensing agreements, online content sharing service providers and right holders shall cooperate in good faith in order to ensure that unauthorised protected works or other subject matter are not available on their services. Cooperation between online content service providers and right holders shall not lead to preventing the availability of non-infringing works or other protected subject matter, including those covered by an exception or limitation to copyright. […]

Article 2(4b) sets out a very complex definition of the UGC platforms affected, taking into account the CJEU case law: “‘online content sharing service provider’ means a provider of an information society service one of the main purposes of which is to store and give access to the public to a significant amount of copyright protected works or other protected subject-matter uploaded by its users, which the service optimises and promotes for profit making purposes“. Recital 37a adds that this is “including amongst others displaying, tagging, curating, sequencing, the uploaded works or other subject-matter, irrespective of the means used therefor, and therefore act in an active way.” It then excludes from the definition of online content sharing service providers microenterprises and small sized enterprises, as well as service non-commercial providers such as online encyclopaedia or providers of online services where the content is uploaded with the authorisation of all right holders concerned, such as educational or scientific repositories.

Article 12a protecting sport event organizers has been introduced at a later stage (with no impact assessment).

This compromized version shows some slight improvements, despite the original defects of the Proposal still remain unsolved. Now the trilogue negotiations amongst the Parliament, the Council and the Commission will start.

Francesco Banterle


First results of the public consultation on revision of the EU Database Directive

Last 6 October, the European Commission published the first results of the public consultation on revision of the Database Directive 96/9/EC (here) that took place between 24 May and 30 August 2017 (here).

Among the various initiatives to foster European data economy, the European Commission is conducting an ex-post evaluation of the Database Directive. In its view, the Directive should play a key role in increasing legal certainty for database makers and users, and enhancing the re-use of data.

There is however little evidence regarding the application and effects of the Directive. The previous report published in 2005 concluded that “the economic impact of the ‘sui generis’ right on database production is unproven” (here). The 2005 Report (not really positive) invited for more analysis on the Directive’s effects.

After more than 10 years, where the CJEU had to clarify the boundaries of the sui generis right, the aim of the consultation is “to understand how the Database Directive, and in particular the sui generis protection of databases, is used, to evaluate its impact on users and to identify possible needs of adjustment”.

The European Commission asked in particular if:

  1. by creating the sui generis right, the Directive has protected investment in the creation updating or maintenance of a database
  2. the Directive is encouraging investments in advances information processing systems
  3. the Directive reached a good balance between interest of rightholders and users
  4. the Directive has achieved harmonisation
  5. national contract law give more legal certainty than sui generis protection when it comes to prevention of extracting or re-using database content
  6. the Directive still fit for purpose in an increasingly data driven economy

Respondents were a mix of business, academics/research institutions, trade associations, and non-governmental organizations.

At a first glance views are divided, particularly in relation to whether [I have tried to count the answers, including the report of the anonymous replies, taking aside hesitant positions – so apologies for any inaccuracy]:

  • the Directive sufficiently protects investments in creating databases (II.2.1) – pro: 45 / contra 25
  • the Directive has achieved its objective to protect and stimulate a wide variety of databasesand innovation in advanced processing systems (II.2.2) – pro: 38/ contra 39, and development of the data market (II.3.9) – pro: 39/ contra 39
  • the current scope of the sui generisright is still satisfactory (III.5.1) pro (satisfactory – too narrow): 42 / contra (too broad – unclear): 53
  • the original objectives of the Directive are still in line with the needs of the EU (III.1) – pro: 53/ contra 39
  • the Directive is coherent with the EU Data Economy Package objectives (III.4.4) pro: 27 / contra: 34
  • the sui generis right has brought more legal certainty for database makers (II.3.1) – pro: 43 / contra: 42, and lawful users (II.3.2) – pro: 38 / contra: 47
  • the Directive achieves a good balance between interests of rightholders and users (II.2.4) – pro: 32 / contra 49
  • the Directive had a positive effect on (i) access to data (II.3.5) – pro 29 / contra (negative or no effect) 57; or (ii) re-use of data (II.3.6) – pro: 30 / contra (negative or no effect) 51
  • national case law gives more legal certainty than the sui generis right (II.2.6) – pro: 30 / contra: 35
  • whether the Directive still fit for purpose in an increasingly data driven economy (2g) – pro: 36 / contra: 47
  • whether the restriction drawn by the CJEU on the scope of the sui generis right (i.e., no protection of the investment made in the creation of data) had positive effect on the scope of the protection of database (III.9.1) – pro: 33 / contra: 27
  • The sui generis right should apply to databases which contain automatically collected and/or machine-generated data (III.10.2) – pro: 20 / contra: 36

As said, opinions are divided, although at a first glance, the general outcome seems not very positive.

It is difficult to foresee which adjustments the European Commission is willing to propose, if any. It is known that the introduction of the sui generis right has been largely criticized (going in the opposite direction than that endorsed by Feist in the US). And it does not seem that any other country has been inspired by and replicated our EU database protection system. Both the 2005 evaluation and this public consultation highlighted that the subject matter and the extension of the sui generis right are often unclear. Indeed, the CJEU intervention has been necessary to limit an excessive extension and the possibility to protect the investments in the creation of data (only those relating collection, verification and presentation of data can be protected – see here and here). However, the points raised in this consultation seem to suggest that the European Commission is trying to question the CJEU approach. The European Commission indeed has inquired about the respondents’ approval of the CJEU interpretation (to ask whether they would instead include also the creation of data under the database right) and whether businesses have appetite to explore the extension of rights also in non-personal raw data (machine generated data), at the moment excluded by the scope of the database right (that requires the investment in the “organization” of data – i.e., the contrary of “raw” data). Thus it seems that apparently the goal is finding confirmations from the market to legitimize a stronger legislative approach to data.

As a confirmation, the European Commission has already launched at least two other recent consultations about the opportunity to strengthen the legislative approach to data, respectively in (i) 2016, see the “Synopsis report – public consultation on the regulatory environment for data and cloud computing”, of 12 May 2016 here at § 4.2.4.; and (ii) in 2017, see the “Synopsis report – public consultation on building a European data economy, of 7 September 2017, here, at p. 5. However, the answer of the market seems always the same: the data value chains are extremely varied, making it difficult to design one-size-fits-all solutions, and freedom of contract should prevail (see here for our comments against the introduction of new exclusive rights in data).

Instead, adjustment can be introduced in the boundaries of the exclusive given by the sui generis right, such as the concept of “substantiality” of the extraction/re-use (Art. 7 of the Database Directive) and – above all – exceptions. Exceptions – especially those for research – should be made mandatory and not optional (see Articles 6.2 and 9 of Database Directive). In this regard, it should also be advisable to introduce the Text and Data Mining (TDM) exception suggested by the DSM Copyright Directive Proposal (see our comments here). However, we repeat that the new exception should allow also TDM for commercial purposes although based on compensation (paying access), in order to stimulate auto-regulation and new access schemes. TDM is not competing with the exploitation of the original database (in line with Art. 8.2 of the Database Directive) and seems instead a good mechanism to ensure flexibility and open data (that is a real instrument to foster a European data market).

In any case, the public consultation should push the European Commission to analyze the economic impact of the ‘sui generis’ right, in order to justify its stay in the EU acquis. We will keep monitoring the next communications from the European Commission on this issue.

Francesco Banterle