What are the implications of the CJEU's rejection of Poland's challenge to the Copyright Directive?

The CJEU has rejected Poland’s right to freedom of expression challenge to the landmark Copyright Directive. We explain what stakeholders need to know.

This article was originally published on Managing IP on 23 May 2022 and a link can be found here.

It’s been almost a year since the Copyright in the Digital Single Market Directive was due to be implemented by all EU member states.

A significant number of countries failed to meet the June 2021 deadline and there has been slow progress since then, with several countries yet to fully implement. One of the reasons for this (or so some countries maintained) was that Poland challenged the validity of Article 17 of the DSM Directive, causing some uncertainty regarding its status.

The Court of Justice of the EU (CJEU) has now ruled (case C‑401/19) against the Polish challenge and concluded that Article 17 is valid, as sufficient safeguards contained in the legislation ensure compatibility with fundamental rights.

Background

The DSM Directive, in particular Article 17, has been a hot topic in the field of copyright law for many years now. In summary, Article 17 establishes the principle that providers of online content-sharing services (OCSSPs) are directly liable if users upload copyright-protected works illegally. However, they can be exempt from such liability if, in situations where rights owners have provided the OCSSP with relevant and necessary information concerning the work in question, the OCSSP then actively monitors content to prevent uploads of such material.

Poland sought an annulment of Article 17, arguing that the requirement for upload filters infringed the right to freedom of expression and information under Article 11 of the Charter of Fundamental Rights of the EU. In  its latest ruling, on April 25, the CJEU rejected the challenge from Poland, in line with the opinion of advocate general Saugmandsgaard Øe released in July last year.

Decision

The CJEU reviewed all aspects of Article 17, including the basis for liability of OCSSPs and the manner in which they can obtain an exemption. Article 17 requires OCSSPs to review material before it is uploaded (a form of upload filter), and therefore limits users’ ability to exercise their right to freedom of expression and information.

This freedom is not absolute. The CJEU considered Article 17’s limitation of users’ freedom to be justified and proportionate as follows:

1. There are clear and precise limits on the measures that may be taken or required to limit the freedom of expression and information of users, in that Article 17 excludes measures that filter and block lawful content at the point of upload.
2. Article 17 provides that users must be permitted by national laws implementing the DSM Directive to upload content generated by themselves which come within exemptions for copyright liability such as parody and pastiche and must be informed of this by the OCSSP.
3. OCSSPs are only liable where the rights owner has provided them with the relevant and necessary information regarding the content.
4. Article 17 already provides that its application must not lead to any general monitoring obligations. This means that OCSSPs cannot be required to prevent uploads of content that would only be found to be unlawful after a detailed independent assessment.
5. Finally, Article 17 contains procedural safeguards to protect users’ right to freedom of expression and information when OCSSPs erroneously or unjustifiably block lawful content.

Based on this assessment, the CJEU concluded that Article 17 includes appropriate safeguards to ensure respect for the right to freedom of expression and information of users and creates a fair balance with the right to intellectual property.

Implications for member states

This decision makes clear that the mechanisms in Article 17 which balance the rights and interests of different parties are essential, and that member states should give them sufficient care and attention when implementing the DSM. This provides useful guidance for those who have not yet implemented the directive and states that have already implemented will need to review their national legislation to confirm that it is compliant. National laws must ensure that any indiscriminate upload filters are prohibited.

Implications for the UK

The UK made clear it would not implement the DSM Directive, even though it was published before the end of the Brexit transitional period. Therefore, this does not have a direct impact on the UK legal system. Furthermore, the CJEU confirmed that Article 17 is a new specific liability mechanism for OCSSPs. This will prevent any claims for retroactive liability prior to its implementation or claims in the UK arguing that Article 17 should be used to interpret existing law. This should provide some legal certainty and be a relief to OCSSPs. Any UK businesses operating in the EU, however, will need to comply with Article 17.

What comes next

As with everything relating to online liability, it is clear this decision will play an important role when analysing the scope, impact, and implementation of Article 17 whenever it arises. It may also impact other legislation such as the upcoming Digital Services Act, which contains yet another liability regime for online services to get their heads around.