Category: Copyright

Carbon Games or the scapegoat of a bad initiative

Blocking sites with no supervision whatsoever... what can possibly go wrong?

Blocking sites with no supervision whatsoever… what can possibly go wrong?

So… The implementation of a protocol to fight online piracy has led to the imposition of technical restrictions on the access to the website of Carbon Games in Portugal.

Indeed, a few weeks ago, any person, player or consumer who tried to access the website was prevented to do so by restrictions imposed by the Portuguese ISPs, namely Cabovisão, Meo, Nos and Vodafone. Any attempt to reach the site resulted in the following message “the site that you’re trying to reach was blocked due to an order from the Regulator Agency”.

Those who are neither Portuguese nor familiar with the case might fail to grasp the myriad of subjacent issues which are wrong with this statement.

Therefore let me explain.

Last year, a protocol was signed – more specifically a ‘memorandum of understanding’ – between the content industry representatives and telecom operators according to which the latter will be required to restrain the access – i.e. blocking – websites with copyright infringing content.

Among the involved parties one can outline IGAC (Inspeção Geral das Atividades Culturais – General Inspection of Cultural Activities), DGC (Direcção Geral do Consumidor – Directorate General of Consumer), APRITEL (Associação dos Operadores de Telecomunicações – Telecom Operators Association) and MAPINET (Movimento Cívico Anti-Pirataria na Internet – Civic Movement for Anti-Piracy on the Internet).

Following the long judicial process which ended with the Portuguese Intellectual Property Court giving ISPs Vodafone, MEO and NOS the order to block the access to the The Pirate Bay website, such entities felt that a faster and less-expensive site-blocking mechanism was required. One that would not require an individual judicial assessment of copyright infringements.

The abovementioned memorandum intends to frame the cooperation of the signatory parties regarding the protection of authors’ copyright rights, while intending to circumvent the limitation arising from the absence of any duty to monitor of ISPs in regards of the information they transmit or store, thus attributing to IGAC such monitoring obligation.

Thus, under these new incumbent responsibilities, IGAC ought to collect and analyse claims of infringements and to order ISPs to prevent the access to legally protected contents unlawfully made available online.

According to the memorandum, the infringement claims ought to demonstrate the lack of authorization of the copyright owner in regards of the works thus made available. In that regard, claims must also be accompanied by a document certifying that, following the request to remove infringing contents, no answer was obtained from the website administrator.

The specifics are as follows: websites which deal predominantly with making available works protected by copyright without the authorization of the rights’ holders will be denounced by the entities representing the rights owners and, once the claim is confirmed by the IGAC, telecom operators are notified to block the websites at stake. The denouncing claims are expected to be filed periodically (twice a month) through MAPINET and referring to a block of up to 50 allegedly infringing websites. However, it is possible to file individual claims in situations particularly detrimental to copyright owners.

In this context, websites containing more than 500 non-authorized works or distributing repositories containing at least two thirds of illegal copies are deemed to predominantly making available works protected by copyright without the authorization of the rights’ holders.

The protocol has been diligently implemented in practice since its signature as, as far as I am aware, up to 180 websites have been blocked under this procedure.

As the case regarding Carbon Games demonstrates, there are several flaws in this system.

To start with, it is important to clarify that Carbon Games is a US videogames developer and its website deals with games of which they are the original creators.

Secondly, this process is undertaken by several private entities and one public body, the IGAC. While it is expected that the interests of private entities will not forcefully coincide with the general interest of the public, one would at least risk hoping that IGAC, within its recently established obligations of analysing claims of infringements, would not rush such analysis.

While one would expect that the infringing nature of the activity of a website should be adequately assessed, it is evident that the system does not work properly, considering that Carbon Games legally produces videogames and, all considering, should have its interests protected by the implementation of the initiative.

Additionally, the fact that ISPs ought to be compensated for all the trouble that the implementation of this protocol may entail for them actually risks to disincentive the establishment of any internal assessment system regarding the legitimacy of the infringement claims raised.

Moreover, the requirement of 500 illegal works or two thirds of illegal copies seems absolutely discretionary. What is the expected outcome of this decision? That websites containing 499 illegal works will remain fully operational? And if this is really the criterion, then it makes the Carbon Games case all the more ludicrous.

One would expect that a website allegedly managing illegal content would have the chance to contra-argument and present its defence. Apparently, it is not the case. In fact, considering the communication of Carbon Games on its own website, it was not aware of any suspicion of infringement content, any administrative proceedings nor of any blocking order prior to the occurrence of the effective blocking. In fact, it seems that no mechanism has been put in place in order to appreciate the wrongful blocking of websites.

In the meantime, it has been admitted that the order of blockage was unduly given and, accordingly, all the providers of online services have been notified that the blocking should be annulled, thus enabling the proper functioning of the website.

I cannot help but wonder how such an error is even possible. Isn’t the list provided to IGAC supposed to be validated?

While the efficacy of such an agreement is questionable considering that it is quite easy to circumvent such technical restrictions implemented by the ISPs by simply altering DNS servers or by changing the website’s domain, the users not aware of this are actually prevented to access the content of blocked websites.

More gravely, it seems that having a website, disregarding the legal nature of its content, is sufficient to be exposed to such mistakes. And the economic consequences can be quite worrisome for the website considering that an unjustified blocking leads platforms to be deprived from the access of their customers for an undefined period of time. In fact, in the Carbon Games case, it took up to two months (!!) to correct the error.

From the reading of the protocol, I honestly fail to see how the owner of a website, facing an unfounded blocking order, is expected to react and speedily regain control of its full functioning. Of course there are proper judicial means such as filing for an injunction. Nevertheless, considering that all this implemented ‘administrative’ procedure disregards any judicial assessment, it seems counterproductive to only foresee such judicial intervention when it is needed to react to unfounded orders.

It is evident that creativity should be rewarded and incentivized through a great protection and enforcement of IP rights. However, it has been made evident that, without proper legal and judicial oversight, access to legitimate content can be unjustifiably restricted. And while the e-Commerce Directive already includes procedures for removing illegal content, considering this whole experience, this specific solution does not seem to be the right path.

The EU copyright law reform – the end of the Internet as we know it?

All means ALL! Even the ones we will think about in the future.

All means ALL! Even the ones we will think about in the future.

One would optimistically think that certain ideas are so unrealistic that no one would ever think about them, let alone dare expressing them. However, and contrarily to one’s best hopes, as it is getting more and more usual in the ambit of protection of IP rights, it seems that there is no limits for the manifestation of the most unbelievable ideas.

Which brings us to copyright, i.e., precisely, the protection conferred upon the expression of ideas and in relation to which the most ludicrous ideas have been expressed.

A recent communication of the EU Commission on copyright reform, entitled ‘Towards a modern, more European copyright framework’ does not bring good tidings.

Apparently it is a welcome document as it aims to address the current lack of harmonization of the copyright laws in the EU. Indeed, it is unquestionable that the current EU copyright legislation requires an update. For instance, the InfoSoc Directive (Directive 2001/29/EC on the harmonisation of certain aspects of copyright and related rights in the information society) intended to address a reality prior to the existence of Twitter, Youtube and Facebook. Consequently, adapting the EU copyright rules to the new online realities is of paramount importance.

However, alongside some seemingly positive approaches of the intended reform, and while it is not wordily stated in the document that the necessity of conferring copyright protection to the acts of using snippets in acts of linking, the reference to ‘rights of communication to the public’ and of ‘making available’ leaves the door opened to such interpretation.

So you can understand why this expression is relevant, Article 3 of Directive 2001/29 provides as follows:

Member States shall provide authors with the exclusive right to authorise or prohibit any communication to the public of their works, by wire or wireless means, including the making available to the public of their works in such a way that members of the public may access them from a place and at a time individually chosen by them.

Copyright holders therefore have the exclusive right over their works and are thus entitled to authorise or prohibit, with certain exceptions and limitations, the making and distribution of copies as well as communication to the public.

The scope of the concepts of “communication to the public” and of “making available” therefore determines what constitutes an act on the internet over which creators and related industries can claim copyright rights and, consequently, negotiate licences and be remunerated upon.

In the EU Commission own words:

The Commission is reflecting and consulting on the different factors around the sharing of the value created by new forms of online distribution of copyright-protected works among the various market players. The Commission will consider measures in this area by spring 2016. The objective will be to ensure that the players that contribute to generating such value have the ability to fully ascertain their rights, thus contributing to a fair allocation of this value and to the adequate remuneration of copyright-protected content for online uses.

In this context, the Commission will examine whether action is needed on the definition of the rights of ‘communication to the public’ and of ‘making available’. It will also consider whether any action specific to news aggregators is needed, including intervening on rights.

It further states that:

Rights that cannot be effectively enforced have little economic value, particularly when infringements occur on a commercial scale that free-rides on the work and investment of creators, the creative industries and legal distribution services.

This explicit reference to new regulation for news aggregators can be interpreted – and most probably is – as an intention to proceed to an ancillary copyright law.

Indeed, the copyright laws directed to news aggregators – which unquestionably led to restrictions on linking – as adopted in certain Member States (Spain and Germany, I presume) are cited as failures which carry the risk of more fragmentation in the digital single market.

Thus said, in a fact sheet, the EU Commission has clarified that it does not intend to tax links:

We have no intention to ask people to pay for copyright when they simply share a hyperlink to content protected by copyright. Europeans share and post hyperlinks every day and they should remain free to do so.

The Commission will look at the activities of different types of intermediaries in relation to copyright-protected content. This is a different issue.

News aggregators, for example, are not only using hyperlinks but also extracts of articles and may gain revenue doing so.

Different solutions related to news aggregators, both legislative and market-led, are being tested at national level. We are closely looking into them and are analysing whether they deliver on their objectives.”

So the use of snippets by news aggregators appears to tbe the cornerstone of the issue. Unfortunately, it does not come as a surprise. In fact, it sounds quite familiar. Lurid ideas as this one have been expressed – and protected too – through legislative means in some Member States, as I already addressed here.

More worryingly, they are motivated by the pressure of publishers who seem to not get over the fact that their content is promoted for free elsewhere than their websites and want to be compensated be the decrease of sales. Allegedly because others make money out of it. If doubts remain, the EU Commission confirms that it will adopt a ‘follow the money’ approach, which seems to confirm that the aim is to force search engines and news portals to pay publishing companies for linking to their content.

This seems to contradict the spirit of the Svensson ruling. The case involved a website providing its clients, according to their needs, with lists of clickable Internet links to articles published by other websites, in which the copyright holders alleged that their exclusive right to make their respective works available to the public had been infringed by the services provided.

In that context, the CJEU clarified some issues in regards of the relation between linking and copyright in the information society, ruling as follows:

1. Article 3(1) of Directive 2001/29/EC of the European Parliament and of the Council of 22 May 2001 on the harmonisation of certain aspects of copyright and related rights in the information society, must be interpreted as meaning that the provision on a website of clickable links to works freely available on another website does not constitute an ‘act of communication to the public’, as referred to in that provision.

Particularly relevant in this regard was the fact that it was interpreted that the communication at stake (making available the works concerned by means of a clickable link), despite concerning the same works as those covered by the initial communication and by the same technical means (the Internet) was not directed to a new public, meaning “a public that was not taken into account by the copyright holders when they authorized the initial communication to the public”. Consequently, such acts were deemed as not requiring the authorization of the copyright holders.

This conclusion is not altered by the circumstance that “when Internet users click on the link at issue, the work appears in such a way as to give the impression that it is appearing on the site on which that link is found, whereas in fact that work comes from another site”.

However, the Court outlined that

where a clickable link makes it possible for users of the site on which that link appears to circumvent restrictions put in place by the site on which the protected work appears in order to restrict public access to that work to the latter site’s subscribers only, and the link accordingly constitutes an intervention without which those users would not be able to access the works transmitted, all those users must be deemed to be a new public, which was not taken into account by the copyright holders when they authorised the initial communication, and accordingly the holders’ authorisation is required for such a communication to the public. This is the case, in particular, where the work is no longer available to the public on the site on which it was initially communicated or where it is henceforth available on that site only to a restricted public, while being accessible on another Internet site without the copyright holders’ authorisation.

The ruling left many questions unanswered. Therefore the intention would not be a bad thing if it addressed the relevant unattended points and if the wrong interests would not dictate the initiative. In this context it seems that the lobby pressures are stronger that the European Parliament’s express opposition on the matter.

On the bright side, it seems that the copyright protection for links in general, which would affect end users and, ultimately the very basic premise of the Internet as we know it, characterized by the open and free communication, by the unlimited sharing of information and opinions, has been put aside.

However it is questionable what is the utility of using a link without a short extract from the linked webpage. It is a common usage on the Internet. From a practical viewpoint, if the intention actually proceeds, the immediate consequence would be that, as explicit permission from the copyright holder would be required for that purpose, any Internet users linking to freely available content for commercial purposes on the Internet could be held liable for primary copyright infringement if using those snippets. As the commercial reuse or retransmission of copyright-protected content appears to be the main motivator, and considering the new arising of new forms of businesses online, such as blogs depending on publicity, it is reasonable to fear that pretty much everyone can be affected.

Furthermore, if the system of exceptions allowing for copyright-protected works to be used, in defined circumstances, without prior authorisation from the rights holders, does not ensure the proper protection in this context, the outcome will be disastrous beyond imagination.

Thus said, the whole raison d’être of copyright laws – to produce incentive to creativeness – is completely going amiss, considering that their protection is conceded uniquely to protect businesses that refuse or are just unable to adapt their strategies to the fast-changing online reality.

The very predictable end of the Google News service in Spain

This web page in Spain... no más!

This web page in Spain… no más!

Google has announced that, in a few days, it will remove Spanish news publishers’ content from its Google News service and close this service in Spain.

Well, this really does not get any nearer of being a surprise. In fact, it actually was the most expectable outcome, considering the amendments to the Spanish intellectual property law passed last October. As you might well remember, this law imposes on Spanish publishers to charge a compulsory licensing fee for the use of snippets of text from their articles by news aggregators. As a consequence, not only newspapers would get to choose to have their publications be included on Google News (after all, it is free publicity and generates traffic and revenues), this law also now compels them to be paid for it.

This extraordinary piece of legislation was intended to succeed where a similar German law (the ancillary copyright law), introduced in 2013, had previously failed. Pretending to avoid that, once they realized the loss of traffic associated with not being indexed on Google News, publishers would voluntarily waived their right to a licensing fee, a unprecedented inalienable right to payment was therefore created, meaning that no one could allow the use of snippets for free. However, considering that, from the very first draft, it was particularly directed to Google, this law is now pre-empted before even entering into force on the first day of January.

Thus said, it is quite easy to predict that 2015 will not start well for Spanish publishers. Not only won’t they be able to obtain from Google the desirable fees for the use of excerpts from their publications, but they won’t be able to benefit either from the traffic directed to their websites and the revenues which are associated to advertising. This will certainly affect the most the weakest existing publishing businesses or the startups intending to enter the publishing market.

Perhaps learning something from this would not be such a bad new year’s resolution for the EU and for other Member States regarding similar legislative initiatives.

The ‘EU Google Tax’ – A very unpromising work in progress?

Let's tax everything.

Let’s tax Googleverything.

Once upon a time or, more precisely, about four years ago, a group of German newspaper publishers filed several antitrust complaints due to the use, in Google news service and search results, of article snippets from their publications.

One would think that the additional free traffic directed by Google, associated to this inclusion of short snippets from their stories, would actually be beneficial for publishers, generating more audience, making their content more valuable, and enabling them to sell more advertising.

It might be quite an accurate consideration but, as it seems, completely irrelevant because the main issue at stake was apparently reduced to the argument that Google was making money out of it:

Hans-Joachim Fuhrmann, a spokesman for the German Newspaper Publishers Association, said the Web sites of all German newspapers and magazines together made 100 million euros, or $143 million, in ad revenue, while Google generated 1.2 billion euros from search advertising in Germany. “Google says it brings us traffic, but the problem is that Google earns billions, and we earn nothing,” Mr. Fuhrmann said.

Although many, in fact, failed to understand how short excerpts shown as part of search results can be detrimental to newspapers publishers, last year, the German Parliament actually approved a new kind of copyright to protect online journalism and, consequently, subjected the presentation of news snippets and linking to the source to a licensing fee.

The law, better known as “ancillary copyright for press publishers” or “Leistungsschutzrecht für Presseverleger”, establishes that publishers have the exclusive right to commercialize their products or parts thereof. The law is intended to be particularly applicable to situations where companies commercially use third party content.

Therefore, a commercial aggregator or a search engine will not be able to aggregate quotations and links of journalistic articles unless they have received previous and explicit authorization. However, as this is intended to be a proportionate solution (?), the use of single words or very small text excerpts is allowed.

The main goal to be achieved is to enable publishers to receive an appropriate contribution for their content being promoted, for free, elsewhere than their websites.

Anyway, recently, the very same German publishers filed an antitrust complaint with the German Federal Cartel Office. Allegedly, due to Google’s dominance on the search engine German market, publishers were forced to agree to let Google use the snippets and links for free.

In parallel, based on the abovementioned German law, they filed as well a copyright request of compensation with the Copyright Arbitration Board of the German Patent and Trade Mark Office, demanding Google to pay them 11% of its gross worldwide revenue on any search that results in Google showing a snippet of their content.

Well, this could have been just like any regular competition or copyright case. Except, for its ludicrous details, it was not.

To start with, no advertising is displayed in the Google News service. Moreover, publishers do not have to be on Google at all. But, despite being able to ‘opt-out’, without any further consequences, the same publishers didn’t remove themselves from Google’s search. Indeed, Google has already ensured that publishers opting out of Google News won’t have their content removed from its search results. In addition, it has been demonstrated that publishers actually use every tool put at their disposal by Google, including Google Webmaster Tools and SEO (Search Engine Optimization) techniques, in order to achieve a better ranking position in search results.

This all saga is not so vaguely reminiscent of a Belgian comic case, from 2006, where, following the complaint of a group of publishers, alleging that Google was infringing on their copyrights by linking to their newspaper articles, Google removed the links referring to content of those newspapers. However, due to the (expected) traffic drop which ensued, those publishers asked to be referenced again on the search engine results. (For more details, see here and here)

As the story seems to repeat itself, the abovementioned antitrust complaint was ultimately rejected as inconclusive, no sufficient grounds having been found to justify an investigation.

In addition, Google decided to remove existent snippets and not to use any further news snippets referring to publications of those publishers. One would expect that the publishers would be satisfied with this initiative but, instead, they dramatically qualified it as “blackmail.”

Confused? Don’t worry. Apparently, this does not have to make any sense at all… And it gets worse!

Not having news snippets referring to their websites showing on Google News obviously led those publishers to a commercial disadvantage comparing to other news websites, which snippets continued appearing in the search results. In this context, and against all odds, the same old group of publishers announced the intention to grant Google a free license to use those kind of excerpts.

This has lead us to an interesting outcome, indeed.

So we now have a German law which allows publishers to collect license fees from news aggregators and search engines which use snippets of their content.

This law was primarily intended to address the specific concerns of a group of German publishers regarding Google market power and to regulate the particular situation of the snippets displayed on Google News.

But it turns out that, after all, Google will benefit from a preferential treatment precisely due to its dominant position in the EU market.

One would innocently expect that Member States could learn from each other mistakes…

Well, against our best expectations, that it is not the case. Spain has just approved a new copyright law, which is polemic at many levels, namely because it has created a brand new ‘inalienable right’ (derecho irrenunciable) for news publishers.

In practice, it means that publishers won’t be able to refuse the use of “non-significant fragments of their articles” by third parties. However, it creates a compulsory license to compensate them for that use, which means that copyrights holders can’t decide to allow the use of content for free and, therefore, completely overrides any concept of fair use, like Creative Commons-type of licenses.

Thus said, one optimistic would still hope that the same mistake wouldn’t be emulated at the EU level.

However, when Günther Oettinger, the next Digital Economy and Society EU Commissioner – considering his previous demonstration of obliviousness regarding Internet in general – takes a stance on the issue, one cannot help to start worrying.

Indeed, as reported by Julia Red (the Pirate Party MEP), Oettinger recent statements were as follows:

When Google is taking intellectual works from within the EU and using them, then the EU has to protect those works and demand a tax from Google.

I am really not sure that a similar tax is the way forward for the EU copyright reform in the digital age we are living in. The reform shouldn’t be aimed to target companies according to their position on the EU market.

To begin with, I am afraid that the whole aim of copyright laws – produce incentive to creativeness – is somehow going amiss and that they will end up being used to protect businesses that refuse or are just unable to adapt their strategies to the fast-changing technological reality.

It is always very frustrating for any legal practitioner to deal with laws that are no longer suitable for the reality they are intended to be applicable to. But it is even more exasperating to deal with laws that were never appropriate to the situation which is intended to be regulated. To legislate in the new era with an old mindset is definitely not the way to go forward.

Moreover, I strongly believe that an extension of the existent copyright laws, namely regarding links, is not compatible with the spirit of openness that characterizes the Web and is mostly a reflection of the interest of publishers who have failed to achieve successful business models on the Internet. Taxing links might most likely lead to the smashing of the very basic premise of the Web.

Furthermore, I am worried that this might be the beginning of the end of freedom and access to unlimited information that characterizes the Internet as we know it and that it will stifle innovation brought by successful entrepreneurship.

Last but not the least, all my criticism aside, considering the German example, how ironic would it be that, in the midst of all the concerns surrounding the dominant position of Google in the EU market, and in all the efforts deployed to fracture its market power, its dominant position would end up being strengthened?

© 2017 The Public Privacy

Theme by Anders NorenUp ↑