German justice ministry presents draft for copyright service provider law

Written on 23 Jul 2020

On June 24, 2020, the German Federal Ministry of Justice and for Consumer Protection (BMJV) published the "Draft of a Second Act to Adapt Copyright Law to the Requirements of the Digital Single Market". The Act aims to implement Directive (EU) 2019/790 of 17 April 2019 on Copyright and Related Rights in the Digital Single Market into German law.

Part of this Act is the draft Copyright Service Provider Act (Urheberrechts-Diensteanbieter-Gesetz-Entwurf), which is intended to implement Article 17 of the Digital Single Market (DSM) Directive and to reorganise the copyright responsibility of upload platforms for the content uploaded by their users.

The copyright responsibility of upload platforms was at the centre of the legal policy debate on the DSM Directive. Consequently, the BMJV wants the draft law to make use of the scope of Article 17 of the Directive in order to protect the rights and interests of all parties involved – creative individuals, cultural industry companies, platforms and their users – in the best possible way.

The Act enters into force on 7 June 2021 and shall apply to all – including foreign – service providers, insofar as they offer or provide their services in Germany. There are five main provisions of the Draft, and each respectively covers general provision, describes permitted uses, regulates unauthorised uses, deals with appeals, and offers some final provisions.

General provisions

Part 1 of the Draft contains general provisions, in particular on their scope. Under section 1 (1) of the Draft, a service provider (section 2) reproduces works in public if it provides the public with access to works protected by copyright which have been uploaded by users of the service. In this way, a service provider shall become responsible for the copyrighted content uploaded by users of its service and shall no longer be entitled to a provider privilege. According to section 1 (2), however, the service provider shall not be responsible for an act according to paragraph (1) and the necessary reproductions if it fulfils its obligations according to section 4, 10 and 11 "in accordance with high standards customary in the industry" and in compliance with the principle of proportionality.

Section 2 (1) of the Draft defines service providers within the meaning of the Act as providers of services under Article 1 (1) lit. b of the Notification Directive (Directive (EU) 2015/1535 of 9 September 2015) who:

  • exclusively or pursue as their main purpose the storage and making publicly available of a large amount of copyrighted content uploaded by third parties;
  • organise copyright-protected content within the meaning of point 1;
  • advertise content within the meaning of point 1 for the purpose of making a profit; and
  • compete with online content services for the same target groups.

As examples of such service providers, the BMJV explicitly mentions YouTube, but also small special interest platforms. Sec. 2 (2) and (3) contain separate definitions for start-up service providers (EU-internal annual turnover of up to € 10 million and services offered for less than 3 years) and small service providers (EU-internal annual turnover of up to €1 million).

Section 3 of the Draft contains a non-exhaustive catalogue of services not covered by the Draft that includes: non-profit online encyclopaedias; non-profit educational and scientific repositories; development and distribution platforms for open source software; providers of electronic communications services (within the meaning of Article 2 number 4 of Directive (EU) 2018/1972 of 11 December 2018); online marketplaces; cloud services provided between undertakings: and cloud services enabling their users to upload content for their own use.

Permitted uses

Part 2 describes the permitted uses. Section 4 (1) of the Draft regulates the contractual use. Accordingly, a service provider shall be obliged to make every effort to acquire the contractual rights of use for public reproduction of copyright-protected works required for this purpose. The service provider fulfils this obligation insofar as it acquires rights of use that are either offered to it or are available through a collecting society or similar body established in Germany. Paragraph (2) contains more detailed provisions concerning these rights. Section 5 refers to the statutory exceptions to public reproduction without consent, in particular for use as quotation, caricature, parody and pastiche. Finally, section 6 contains a catalogue of partial uses for non-commercial purposes, for example, up to 20 seconds of a film or a soundtrack, up to 1,000 characters of a text or a photograph with a data volume of up to 250 KB.

Section 7 of the Draft contains remuneration claims of the authors against the service provider for contractual or legally permitted uses.

Section 8 (1) of the Draft obliges the service provider to inform the user of the permitted uses when uploading works and to enable the user to mark the use as contractually or legally permitted. If the user has made such a marking and this marking is not obviously incorrect according to section 12, the blocking or removal according to section 10, 11 shall not be permitted according to paragraph (2); furthermore, the service provider shall inform the rightholder of the public reproduction.

Unauthorised uses:

In Part 3, unauthorised uses are regulated. Section 10 of the Draft concerns the blocking of unauthorised uses. The service provider is obliged to do so in accordance with section 1 (2) as soon as the rightholder has provided the necessary information and the blocking is permitted in accordance with section 8 (2) and 12. Exceptions apply, according to paragraph (2) and (3), for start-up service providers and small service providers.

According to section 11, the service provider shall be obliged to remove unauthorised uses under the same conditions if the rightholder so requests. Exceptions for start-up service providers and small service providers are not contained in the text of the Draft.

Section 12 of the Draft stipulates that the blocking and removal must be carried out despite the marking according to Sec. 8 (2), if this is obviously incorrect. According to sentence 2, when referring to legal permissions this can be the case in particular, if the content uploaded by the user corresponds to at least 90 percent of the information provided by the rightholder.

Appeals

Part 4 deals with appeals. In addition to the right of all parties to appeal to the courts, as clarified in section 13 (4) and 14 ff., provide for various appeal procedures. For example, according to section 14 the service provider must provide for an internal complaints procedure, for which, according to section 15, it may also use a recognised external complaints body. Section 16 stipulates that the Service provider shall not be responsible for the public reproduction under copyright law until the end of a complaint procedure, if the user has marked the uploaded content in accordance with section 8 (2) and this is not obviously incorrect under section 12. Finally, section 17 f. regulate the extrajudicial settlement of disputes by private or official arbitration bodies.

Final provisions

In Part 5, there are final provisions. Section 19 of the Draft provides for various measures against abuse of the statutory provisions. These measures can be: directed against alleged rightholders ("false notification" in paragraph (1) f.); users who mark their uploaded content incorrectly ("false pre-flagging" in paragraph (3)); or service providers who block content without permission ("overblocking", in paragraph (4)).

Section 20 of the Draft grants the rightholder certain rights of information against the service provider. For the obligation of the service provider to appoint a domestic service agent, section 21 refers to section 5 (1) of the Network Enforcement Act (Netzwerkdurchsetzungsgesetz). And section 22 extends the application of the Act to related rights.