This article was first published by LexisPSL on 4 May 2022.

On 26 April 2022, the European Court of Justice delivered its landmark judgment on the Republic of Poland’s action to annul Article 17(4)(b), and (c) in fine of Directive (EU) 2019/790 (the EU DSM Copyright Directive). Poland’s basis for this challenge was the right to freedom of expression and information in Article 11 of the Charter of Fundamental Rights of the EU (the Charter). On the basis that it was not possible to excise these provisions safely from Article 17, Poland sought the quashing of Article 17 in toto. The long-awaited answer from the court was unsurprisingly that Article 17 stands. The obligation that it imposes on so-called online content sharing service providers (OCSSPs-eg, YouTube) to review, prior to its dissemination to the public, the content that users wish to upload to their platforms, is accompanied by the necessary safeguards to ensure that that obligation is compatible with the Charter. The court therefore dismissed the Polish action against Article 17, noting also that the provision was indivisible.

What are the practical implications of this case?

There are many EU Member States that still need to complete implementation of the EU DSM Copyright Directive and national authorities and courts will have to start applying it. For lawyers representing rightholders or OCSSPs, the next steps will be rendering advice on the actual use of Article 17—either licensing or enforcement-in light of the Court of Justice’s rather high-level guidance (particularly in contrast to the Advocate General’s more detailed opinion). For lawyers representing users, the important issues concern respect for the requirement that legally uploaded content is not blocked. Legal content in this context is content that is in the public domain, authorised or subject to a copyright exception. Confusingly, the court refers to exceptions, which are normally defences to what are otherwise considered infringements, as user rights. While the court has used this terminology before, it seems that its use here relates to the specific construct of Article 17.

In the penultimate paragraph of its seminal decision, the court instructs the Member States that transposition of Article 17 into national law must be done on the basis of a fair balance between the relevant fundamental rights protected by the Charter. Once the EU DSM Copyright Directive is transposed, national authorities and courts must apply national law in a manner consistent with Article 17 and ensure ‘they do not act on the basis of an interpretation of the provision which would be in conflict with those fundamental rights or with the other general principles of EU law, such as the principle of proportionality’. It is here that the floodgates open-rightholders and likely the Commission as well as certain Member States, such as France, and perhaps some OCSSPs, will interpret this language as meaning that a verbatim implementation of Article 17 subject to an application in practice that respects fundamental rights is in line with the EU DSM Copyright Directive. Anti-copyright groups take the view that only implementations of the EU DSM Copyright Directive that follow the restrictive German approach which includes ex ante safeguards are acceptable. Practitioners can also expect tosee national court referrals start to filter up to Luxembourg.

The court has neglected to provide detailed guidance on what kind of content recognition technologies are permissible in light of the ex ante and ex post safeguards in the EU DSM Copyright Directive. Indeed, it seems to take a high-level approach to this important issue. This approach contrasts with the more specific and detailed interpretations of the European Commission in its Guidance on Article 17 (4 June 2021) and the Advocate General (AG) in his Opinion (15 July 2021). The AG for instance took the view that the possibility to block content could only apply to ‘manifestly illegal content that is ‘identical’ and ‘equivalent’ to protected works’. The AG also criticised the part of the Commission Guidance which referred to the possibility for rightholders to ‘earmark’ content which ‘could cause significant economic harm to them’. The court appears to have purposefully skirted any mentioning of the Commission Guidance or these elements of the AG opinion in its judgment.

What was the background?

Article 17 creates a new liability regime pursuant to which OCSSPs (as defined in Article 2(6)) carry out acts of communication to the public/making available when they give access to protected works uploaded by their users. In such cases, the hosting privilege in Article 14 of Directive 2000/31/EC (EU E-Commerce Directive) does not apply and OCSSPs risk liability for copyright infringement. There is however a way out for them—the new regime establishes a safe harbour for OCSSPs who undertake best efforts: (a) to obtain authorisation; (b) to ensure unavailability of content for which rightholders have provided the relevant and necessary information (basically unauthorised content); and (c) to ensure notice and takedown and staydown. However, this is only the first half of Article 17 (paragraphs 1–4). The EU legislator was concerned that this new regime posed risks for users’ fundamental rights, and it therefore adopted a further set of provisions (paragraphs 5–10).

The Polish government, which was dissatisfied with these further provisions, filed its action against the European Parliament and the Council of the European Union on 24 May 2019 some five weeks after adoption of the EU DSM Copyright Directive and just days before it entered into force. This judgment is just the beginning; the import and meaning of Article 17 will continue to be debated and litigated for years to come.

What did the court decide?

It is in Article 17(5)–(10) that the Court of Justice took the solace it needed to conclude that Article 17 is valid even though it found a limitation on the freedom of expression under the Charter. Specifically, the court found:

• Articles 17(7) and 17(9) set clear and precise limits to the measures that can be taken pursuant to Article 17(4)(b)–(c), by excluding, in particular the blocking of legal content at the time of uploading. The court refers in this regard to the existence of copyright exceptions, the public domain and the uploading of free content by the author
• Article 17(7) obliges Member States to ensure that users can upload content for the specific purposes of quotation, criticism, review, caricature, parody and pastiche. These exceptions are rendered mandatory in the framework of Article 17 to ensure a uniform application in the EU. Article 17(9) obliges OCSSPs to inform their users about them and as noted above the court frames them as rights
• According to Article 17(4)(b)–(c), the liability of OCSSPs for ensuring that certain content is unavailable can be incurred only on condition that the rightholders concerned provide them with the relevant and necessary information about that content
• Article 17(8) states that application of Article 17 must not lead to any general monitoring obligation. OCSSPs cannot be required to prevent the uploading and making available to the public of content which, in order to be found unlawful, would require an independent assessment of the content by them in the light of the information provided by the rightholders and of any copyright exceptions. In this context, the court recalls that intellectual property protection is not absolute and that it cannot be excluded (per Recital 66) that, in certain cases, availability of illicit content can only be avoided through notice and takedown (although the court rejects the Polish argument that notice and takedown is sufficient protection in and of itself)
• Article 17(9) introduces several procedural safeguards, which protect the right to freedom of expression and information of users of the abovementioned services in cases where, nonetheless, the providers of the services erroneously or unjustifiably block lawful content: OCSSPs have to put in place an effective and expeditious complaint and redress mechanism that is available to users of their services in the event of disputes over the disabling of access to, or the removal of, works or other subject matter uploaded by them
• Article 17(10) completes the set of safeguards by charging the Commission with the organisation of a stakeholder dialogue and issuing guidance

On this basis, the court held that the obligation on OCSSPs to review, prior to its dissemination to the public, the content that users wish to upload to their platforms, resulting from the specific liability regime in Article 17(4), was accompanied by appropriate safeguards to ensure respect for the right to freedom of expression and information under Article 11 of the Charter, and a fair balance between that right and the right to intellectual property under Article 17(2) of the Charter. As a result, the Polish action was dismissed.

Conclusion

From the rightholder perspective, Article 17 remains in place as a licensing and enforcement tool and indeed action against rogue platforms is completely unaffected. From an OCSSP perspective, their obligations remain in place—complicated as ever but so far, no real issues in Member States which have implemented the EU DSM Copyright Directive. The position of users is strengthened with this judgment. Anti-copyright activists are on the lookout for abuse, and they take the view, as noted above, that Member States must incorporate specific safeguards against ex ante measures which prevent the upload of non-infringing content (such as those in Germany) in their national implementations of the EU DSM Copyright Directive. This view contrasts with the position that
verbatim transposition is good enough and what matters is how the law is applied. The debate rages on and the floodgates are open.

Case details:

• Court: Court of Justice
• Date of judgment: 26 April 2022