The new French law targeting "automated image referencing services": does EU law allow it?

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As reported by this blog [here, here and here], earlier this year France adopted a law [Loi No 2016-925 on freedom of creation, architecture and cultural heritage] which - among other things - introduced new provisions [Articles L 136-1 to 136-4] into the Code de la propriété intellectuelle (CPI) to regulate the exercise of the exclusive rights of reproduction and representation vis-à-vis automated image referencing services. 

The content of the new provisions

As explained by Brad Spitz in a post published on the Kluwer Copyright Blog, "the new provisions will apply to ‘automated image search services’, which Article L.136-1 IPC defines as any online public communication service that reproduces and makes available to the public for purposes of indexing and SEO, plastic, graphic or photographic works, collected in an automated way from online public communication services (i.e. internet websites). In other words, these provisions target search engine services like Google Images."

Spitz also adds that Article L.136-1 IPC specifies that the images have to be ‘reproduced and made available’ by the image search services. This suggests that an act of reproduction is needed in order to trigger the entire mechanism envisaged by Loi No 2016-925. Lacking reproduction, no permission would be needed.

But: permission from whom? Article 136-2(1) CPI answers that, by saying that the publication of a plastic artwork, graphic or photographic work by an online communication service will be now subject to the consent - not of authors - but rather one or more collecting societies appointed to this end by the French Ministry of Culture.

Readers will remember that on this blog I have already expressed some doubts regarding the compatibility of this new legislative initiative with EU law. In particular, three main questions come to my mind once again.

1) A deprivation of rights?

The first question is whether a mechanism by which relevant authors are ab initio deprived of their right to authorise or prohibit the reproduction and making available of their works through online referencing systems [appointed collecting societies will instead have such right] is in line with EU copyright law, notably the InfoSoc Directive.

Collecting societies are not included among relevant categories of rightholders in this piece of EU legislation. Further to the decision of the Court of Justice of the European Union (CJEU) in Reprobel [here], it is questionable whether such a departure from the so called author principle is allowed by the InfoSoc Directive [and France may not be the only instance ...].

This conclusion is strengthened by the Opinion of Advocate General (AG) Wathelet [here] in the pending reference in Soulier [the decision is due in a few weeks' time, 16 November 2016]. The AG stated [paras 38-39, emphasis added] that: 

Were you thinking of doing as you please?

"Article 2(a) and Article 3(1) of Directive 2001/29 require the prior express consent of the author for any reproduction or communication to the public of his work, including in digital format. That consent constitutes an essential prerogative of authors.

In the absence of any derogating EU legislation, the author’s express and prior consent for the reproduction or communication to the public of his work cannot be eliminated, assumed or limited by substituting it with tacit consent or a presumed transfer which the author must oppose within a fixed time limit and in accordance with conditions laid down by national law. It follows that national legislation like the decree at issue, which replaces the author’s express and prior consent with tacit consent or a presumption of consent, deprives the author of an essential element of his intellectual property rights."

It follows that, by depriving authors of their ability to authorise the making of acts of reproduction/communication to the public, French legislature might have gone against what is allowed under EU law.

In addition - further to the CJEU decision in Luksan [here; what was at stake here was an Austrian law that - in contrast with EU law - failed to recognise film directors as first copyright owners] - it is arguable that by vesting ab initio collecting societies with the rights to exploit copyright works France might have deprived authors of their fundamental right to (intellectual) property, as expressly protected instead under Article 17(2) of the Charter of Fundamental Rights of the European Union.

2) A re-design of liability rules?

The second question also relates to the compatibility with existing CJEU jurisprudence. 

Even if the French law requires the making of both an act of reproduction and and an act of communication to the public to fall within its scope of application, it appears to assume that an automated image referencing service:

• is primarily responsible for the making of acts of reproduction and communication to the public; and
• in any case, is not eligible for the safe harbour protection in the Ecommerce Directive.

Under the existing EU framework, it may be questionable whether such approach is correct. 

With particular regard to the notion of communication to the public, while it has taken the CJEU several judgments to try and make sense of this notion, as of today it is unclear whether an online referencing service can be considered as making acts of communication to the public itself. 

In the recent GS Media decision [discussed here, here, here, here], the CJEU confirmed that if one construes communication as merely requiring the making available of a work, ie without the need for any actual transmission, then what needs to be considered is "the indispensable role played by the user and the deliberate nature of its intervention. The user makes an act of communication when it intervenes, in full knowledge of the consequences of its action, to give access to a protected work to its customers, and does so, in particular, where, in the absence of that intervention, its customers would not, in principle, be able to enjoy the ... work" [para 35]

One could wonder whether in the case of an online referencing service, it is this or rather the creators of the websites indexed  (or, in any case, third parties) that play such indispensable role to give access to protected works [as noted here, a similar approach seems to have been (correctly?) taken also by the EU Commission in its recently proposed directive on copyright in the Digital Single Market in relation to the so called 'value gap'].

Another model notification
under Directive 2015/1535

As I noted here, in light of certain decisions of the CJEU and national courts alike, it may be argued that – in the case of a copyright work made available through the service of a passive online intermediary – the latter would not commit an act of (unauthorised) communication to the public (potentially giving rise to primary liability for copyright infringement), because the role that is ‘indispensable’ in the whole process is the one of the third-party/uploader, rather than that of the intermediary. 

3) Why French Government did not notify the EU Commission?

Finally, Directive 2015/1535 requires Member States to notify the EU Commission of any draft technical regulation targeting information society services. The reason, as explained at Recital 4 of the directive, is that "[b]arriers to trade resulting from technical regulations relating to products may be allowed only where they are necessary in order to meet essential requirements and have an objective in the public interest of which they constitute the main guarantee."

By looking at the relevant Commission's database, it seems that this has not happened for Loi No 2016-925 at the draft stage. The only notification I have been able to find relates to the draft decree implementing Articles L-136.3 and L 136.4 IPC.

What could the implications of this missed notification be? 

The answer might be 'inapplicability' of relevant provisions. The CJEU clarified that this would be the effect of the failure by a Member State to notify draft technical regulations before they are adopted in its 1996 decision in CIA Security, and confirmed this in its 2000 Unilever judgment.

Something along these lines has been also suggested in relation to the German and Spanish initiatives on so called 'ancillary copyright' for press publishers [see B Vesterdorf (2015), ‘The effect of failure to notify the Spanish and German ancillary copyright laws’ 37(5) EIPR 263]. 

Ultimately, the right of appointed collecting societies to license the reproduction and making available of images via automated image referencing services could be unenforceable. So automated image referencing services might not have to secure a licence after all.

In conclusion ...

... It seems that the path to royalties is paved with a number of potential obstacles. As anticipated by Spitz in his blog post, it is indeed likely that "[t]here will be long discussions and probably lawsuits before some royalties result from these new provisions."

But what do readers think?