Digital age blog series - #1 Innovation in copyright law

This summer, the Directive on Copyright in the Digital Single Market (“DSM Directive”) (EU Directive 2019/790) has been transposed into Belgian Law and has largely entered into force.

This blog post is the first part of our digital law series in which we highlight the main changes in the digital age from a tech & IP law perspective. This blog post describes the key take-aways when it comes to copyright law, in particular (i) new mandatory exceptions to copyright protection, (ii) new rights for authors and press publishers, and (iii) new copyright contracting principles.

New exceptions

Four new uses of copyright protected works have been recognized as not copyright-infringing although no authorization of the rightholder is obtained. Alongside the well-known exceptions for quotation, criticism, review, caricature, parody and pastiche, the new mandatory exceptions are:

  • text and data mining (i.e. making reproductions and database extractions of lawfully accessible works) for research purposes, by research organizations and cultural heritage institutions, which is meant to contribute to the development of AI in the EU;
  • text and data mining for private (non-commercial) purposes;
  • digital use of works for illustration in an educational context, such as for online teaching; and
  • digital preservation of cultural heritage by institutions like museums and libraries.
New rights

From now on, a commercial online service provider should enter into a license agreement with the press publisher if he wants to use the news content of the latter online (i.e. reproduce the content or make it available to the public). This obligation applies to publications that were published maximum two (2) years prior to the use. It does not only safeguard a fair remuneration for the press publisher, but also entitles the author to receive a fair share of the compensation. Therefore, the content provider is obliged to be transparent in the determination of an appropriate compensation. This new right does, however, not apply to the practice of mere hyperlinking.

In the event an agreement between the commercial online service provider and press publisher cannot reasonably be reached, the dispute can now be settled through a specific alternative dispute resolution mechanism. The Belgian Institute for Postal Services and Telecommunications (BIPT) may provide the parties with a binding decision, thus settling the dispute.

In addition, online content-sharing service providers (i.e. big platforms such as Facebook and YouTube) must obtain the authorization of the rightholders when they allow public access to copyright protected works, uploaded by their users. Authors and rightholders are now entitled to be granted a fair remuneration with respect hereto, or have their works removed or blocked.

New contracting principles

The new mandatory principles to be considered for copyright contracting reflect the purpose of the DSM Directive to empower copyright holders (mostly authors) and holders of neighbouring rights (mostly performers) and entitle them to a fair remuneration in any type of licensing or IP transfer agreement. A remuneration may be considered fair if it is in line with the actual or potential economic value of the IP rights, bearing in mind the contribution to the work as a whole. Lump sum payments may still be appropriate, provided that they are sufficiently linked to the value of the work.

The DSM Directive establishes a general transparency obligation on the parties to whom rights are transferred or a license is granted, with respect to the remuneration and exploitation of the relevant works. However, the Belgian legislator nuanced this obligation in a twofold way by providing that (i) in justified cases only the type and level of information that can reasonably be expected shall be shared and (ii) the obligation is not applicable when the contribution of the rightholder is not significant, unless such rightholder can show the unexpected success of the work.

Although this obligation only takes effect as from 7 June 2023, it will certainly have an influence on the following mandatory contracting rules for authors and performers, which are already in effect:

  • the right to enforce a success clause when there is an unexpected success of the exploitation and the initially agreed remuneration does not reasonably suffice any longer;
  • the right to revoke the IP transfer or license and regain their rights in the event their works or performances are not exploited by the persons with whom they concluded an exclusive agreement; and
  • the right to rely on a specific alternative dispute resolution mechanism for the settlement of conflict.

The DSM Directive and its implementation in Belgian law provide authors and performers with an extended arsenal to enforce their rights and be fairly remunerated for their works. The new rights and rules will not only impact future agreements, but may also touch upon existing agreements.

Do not hesitate to contact our Tech & IP team for further information. We are more than happy to assist you in (re)drafting your copyright related agreements and establishing your IP monetization strategy.

Marie Vercambre, Associate

Olivier Van Raemdonck, Partner