EU Directives Pass Through Parliament
On March 26, the European Parliament adopted two Directives that will impact industry: one regarding territoriality that establishes new rules applicable to certain online transmissions of broadcasting organizations (the “Broadcasting Directive”); and another that establishes new copyright rules for the Digital Single Market (the new “Copyright Directive”). Both texts are expected to receive final approval by the EU Council (Member States) next week and will take effect after publication in the EU’s Official Journal (approximately September 2019), at which point the Member States will have a two-year period to implement the new rules into national law. Neither Directive has an immediate effect.
Territoriality: Online Transmissions of Broadcasting Organizations
The Broadcasting Directive sets new EU rules that will permit broadcasters to carry certain television programming also on its ancillary online services throughout the EU, based solely upon the original rights licensed in the broadcaster’s “country of origin.” After an extremely hard-fought battle in the legislative process by the film and other audiovisual sectors, this Directive was successfully narrowed in scope from its original far-reaching proposals to apply only to: (1) “news and current affairs” programs, and (2)broadcasters’ “fully financed own” productions. It also applies only to online services that are directly related to the original broadcast (i.e., catch up and similar), not to other online services that the broadcaster may launch separately. With this limited scope of application, the rightsholders’ authority to limit their licenses on an exclusive territorial basis in the EU have been protected for now. Other sections of the Directive also extend the EU retransmission regime to cover retransmission over an internet access service carried out in a ‘managed environment’ and clarify that application of the regime to retransmission carried out by direct injection technologies.
Copyright in the Digital Single Market
The Copyright Directive falls short of establishing a general monitoring obligation on ISPs as originally proposed, but sets new EU rules that will require certain ISPs (“online content sharing service providers”) to use “best efforts” to obtain an authorization from rightsholders for content appearing on their systems and to respond expeditiously to notice and takedown requests from rightsholders; larger ISPs must further make best efforts to prevent future uploads of notified works.(See Art. 17). It is unclear what constitutes “best efforts” and which measures are sufficient to meet this threshold: these concepts will be interpreted by each Member States during their implementation into national law.
The new copyright rules also require the application of a “remuneration principle” that essentially requires proportionate pay to certain authors, such as directors, writers, and performers. Though there appears to be no prohibition against waiver of this principle, its mere existence causes confusion and could undermine the previously unregulated system of buy-outs and collective bargaining practices within the EU.
These new rules also require transparency on the producer’s part in providing clear statements and annual audits of payments, a best seller “bonus”, and allow for the revocation of a license by the author for “non-use” by a producer. Guilds will now be able to assist the author/performer in disputes using alternative dispute resolution mechanisms for mediation and arbitration with producers, with the author or performer retaining the right to sue in court. None of these principles may be waived in contracts for authors and performers. While a number of Member States already have provisions in place on remuneration, transparency, contract adjustment and revocation, a main factor for the EU-level regulation in the Directive is to harmonize existing national law and to a certain degree provide either a floor (minimum requirements) or a ceiling (maximum protection) in the single market. It is unlikely that these new protections for authors, directors, and performers will be applicable to non-EU/EEA productions. However, further study will be needed to evaluate the situation with productions that “touch” the EU/EEA through financing arrangements, on-site physical production, etc. IFTA continues to follow the legislative developments in the EU and as efforts shift to national implementation of these new rules, will issue updates accordingly.