The EU Commission is stepping up the fight against illegal content with Internet platforms

Discussions about copyright rules for the digital age are rising. In the last quarter of 2017, the European Commission (“EC”) has been pretty busy to step up the fight against online piracy and counterfeiting; but online platforms also have a role to play. Indeed, hundreds of thousands of movies, TV shows, software and books are still available to download for free. In this article, we highlight some of the new proposals aiming at protecting copyright and ensuring that illegal content once taken down does not (too quickly) simply reappear.

How does the Commission plan to step up the fight against counterfeiting and piracy?
Apart from the copyright proposal reform adopted in September 2016, the EC recently published a number of important IP documents:

-          A Communication paper on “Tackling Illegal Content Online - Towards an enhanced responsibility of online platforms”; 

-          A Communication paper giving “Guidance on certain aspects of Directive 2004/48/EC of the European Parliament and of the Council on the enforcement of intellectual property rights”;

-          A Communication paper on “A balanced IP enforcement system responding to today's societal challenges”.

What are the EC Communications all about?
In a nutshell, the 1st communication was adopted to increase the proactive prevention, detection and removal of illegal content in the online environment. The EC proposes common tools to detect, remove and prevent the reappearance of such content online. These Guidelines also aim to provide clarifications to platforms on their liability when they indeed take proactive steps to detect, remove or disable access to illegal content.

The 2nd and 3rd communications provide for a comprehensive set of measures aiming at improving the way IPRs are applied and enforced across the EU. It supports the 1st recommendation. In particular, the EC calls on the tech industry to undertake further due diligence steps to combat IPR infringements.

What are the main new measures to ensure that copyright holders are well protected?
The 1st measure: The EC wants to deprive commercial-scale IP infringers, the 'big fish' rather than individuals, of the revenue flows that make their criminal activity lucrative (aka the "follow the money" approach).

Well, here, nothing new under the sun…
Indeed, instead of using legislation, the EC continues to support industry-led initiatives to combat IP infringements, including voluntary agreements on advertising on websites, on payment services and on transport and shipping. “Such agreements can lead to faster action against counterfeiting and piracy than court actions” said the Commission. 

For instance, the Memorandum of Understanding (MoU) on the Sale of Counterfeit Goods via the Internet, signed in 2011 between the right holders and internet platforms, has already yielded significant results.
The 2nd measure: clarifying interpretation issues that have arisen in the application of the 2004 Directive on the enforcement of intellectual property rights (IPRED).

It’s a useful initiative.
The guidance provides clarification where there have been diverging interpretations on IPRED provisions in the Member States, not only based on the case-law of the EU Court of Justice but also on national "best practices".

The guidance makes it clear that the possibility to issue an injunction against an online platform on the basis of IPRED does not depend on the intermediary's liability for the infringement (as under the E-commerce Directive). The guidance also explains that by means of such injunctions against intermediaries, national courts may issue injunctions imposing specific monitoring obligations.
Some of the measures in IPRED only apply to 'commercial scale' infringements. The guidance clarifies the concept of ‘commercial scale' which should be interpreted taking into account qualitative elements, such as the commercial advantage of the infringements, and quantitative elements, such as the number/extent of the infringements.

Lastly, the guidance encourages the use of new instruments such as protective brief (defendant informs the court before an infringement case has formally been lodged) and dynamic injunctions (e.g. against repeat infringers).

Finally, the 3rd measure: The EC wants to explore the potential of new technologies such as blockchain to combat IP infringements in supply chains.
This is a totally new approach (but unfortunately no information is provided by the Commission…).

Blockchain technology, with its immutable characteristics and peer-to-peer review, could indeed be used as a registry/database of IP rights. Content creators may then decide to produce and license their new album in the blockchain and receive royalty payments via smart contracts, without having to deal with the chain of collection societies and publishing administrators.
“Dot Blockchain”, a blockchain-based music database with a codec and player that is tied to a blockchain in order to play content, is one example of a company using such technology to solve the piracy issues.

However, it remains to be seen how the piracy problems will be handled. Internet users still have plenty of ways to copy, record, and distribute content without the consent and compensation of its right holders.

What are the main actions expected from online platforms?
The EC proposes common tools to “swiftly and proactively detect, remove and prevent” the reappearance of illegal content online:

·         Detection and notification
Online platforms should systematically enhance their cooperation with the national competent authorities, whilst Member States should ensure that courts are able to effectively react against illegal content online.

To speed up detection, Internet platforms are encouraged to work closely with trusted flaggers, i.e. specialized entities with expert knowledge on what constitutes illegal content. Notices from trusted flaggers should be able to be fast-tracked by the platform.

Finally, online platforms should establish an easily accessible and user-friendly mechanism that allows their users to notify content considered to be illegal and which the platforms host. This should facilitate the provision of notices that contain an explanation of the reasons why the notice provider considers the content illegal and a clear indication of the location of the potentially illegal content (e.g. the URL address).

·         Proactive removal
It is emphasized that online platforms should do their utmost to proactively detect, identify and remove illegal content online. The EC strongly encourages online platforms to use voluntary, proactive measures aimed at the detection and removal of illegal content and to step up cooperation and investment in, and use of, automatic detection technologies. Particularly fast removal is crucial in the case of illegal content where serious harm is at stake, for instance in cases of incitement to terrorism acts.

Very importantly, the EC emphasizes that when online services explicitly search for pirated materials, they won’t lose the benefit of the liability exemption provided for in Article 14 of the E-Commerce Directive.

In particular, the taking of such measures do not need to imply that the online platform concerned plays an active role which would no longer allow it to benefit from the said exemption. Whenever such measures lead the online platform to obtain actual knowledge or awareness of illegal content, it shall act expeditiously to remove or to disable access to the illegal information in question to satisfy the conditions required by law for the continued availability of that exemption.

·         Prevention of re-appearance (Notice-and-stay-down approach)
The EC strongly encourages the further use and development of automatic technologies to prevent the re-appearance of illegal content online. Where automatic tools are indeed used to do so, a reversibility safeguard should be available for erroneous decisions. Also, the use and performance of this technology should be made transparent in the platforms' terms of service.

Online platforms should take measures which dissuade users from repeatedly uploading illegal content of the same nature and aim to effectively disrupt the dissemination of such illegal content.
Access to databases that are used to automatically match and identify reappearing illegal content should be available to all online platforms (subject to compliance of any processing operation with applicable legislation on the protection of personal data and competition). Privacy policies of companies should include transparent information on processing of personal data in case of such databases.

Hash-based and other automatic filters are not new of course. Services such as Google Drive and Dropbox already have these in place and YouTube’s Content-ID system also falls into this category.
The Communication also calls for broader transparency measures (including on the number and speed of take-downs), as well as complaint mechanisms and other safeguards to prevent the over-removal of content.

Possible legislative measures in a near future?

Although these recommendations are non-binding, the EC expects online platforms to implement their Guidelines. Implementation will be monitored over the next months. If nothing is done by then, the EC threatens to impose binding legislation: “The Commission expects online platforms to take swift action over the coming months, (…) [and] will monitor progress and assess whether additional measures are needed, in order to ensure the swift and proactive detection and removal of illegal content online, including possible legislative measures to complement the existing regulatory framework. This work will be completed by May 2018”.

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