Licenses: we are past copyright

We have been arguing for quite sometime now that handing out the power to define the scope of users rights to right holders – in the form of license agreements that they can (almost unilateral) draft and frame as they wish – is bad. Really bad: licenses fragment the legal framework that mandatory exceptions try to harmonize; licenses contain abusive terms or impose obligations on users that are not foreseen in the laws; and licenses have a huge impact on national budgets.

Unfortunately, this message has not come through to all, or not everyone understands what we are saying, or worse right holders have done a nice job in convincing lawmakers that’s the right way to go.

Allowing licenses to override exceptions is the only treat that publishers want

The current copyright reform carried the promise of being a landmark in the history of the EU copyright law. Lawmakers would finally show they understand that copyright is not superior to any of the other fundamental rights that every constitutional law across Europe grants to their citizens, and would make things right. Sadly, however, the prospects of that being the case for education are now very low.

MEPs passed the last year negotiating the scope of the educational exception. On the one hand, those who side with schools, teachers and students, proposed amendments to eliminate some of the constraints that the educational exception contains. On the other hand, those who side with publishers have been pushing for more restrictions, in order to narrow down the scope of the proposed exception even further.

Not enough MEPs understood that the most problematic aspect of art. 4 is not the scope of the mandatory exception (n.º 1) but the fact that Member States may choose not to apply such mandatory exception if licenses covering those uses are easily available in the market (n.º 2).

It is our understanding that publishers could not care less about the scope of the educational exception, provided that they can rule out the application of said exception with their own license agreements. This is copyright “taking the back seat”, as Professor Niva Elkin-Koren would put it.

License terms are not user friendly

It’s disappointing to see MEPs failing to acknowledge that providing this much power to publishers and other right holders will perpetuate the unbalanced power structure of the modern copyright systems. If right holders do not need to negotiate with users the exercise of their rights over their works (which is defensible from an economic point of view), is it fair to ask users to negotiate with right holders the exercise of their rights to access and use such works for educational purposes?

Subjecting educational uses to negotiation is problematic not only because it’s unfair and it fragments the legal frameworks for educational uses of protected works, but because the majority of educational institutions in the EU will be ill-placed to negotiate license terms or will be forced to accept the terms dictated by the licensor.

Even in countries where Ministries of Education will chose to negotiate and buy licenses on behalf of the education institutions under their control, things will not be easier. Accepting to give precedence to licenses over exceptions will open the door to strong lobbying of national governments by publishers, resulting in high transaction costs and naturally increasing the costs of education, at least in those 17 Member States where educational exceptions are now completely or largely unremunerated.

One should not forget that, according to a study commissioned by the EC in 2016, 31,3% of educators pointed out that “I or my school could not afford the price of the license”, when discussing copyright-related restrictions experienced by them that have an impact on their daily activities.

In addition to licensing prices, users will be faced with licensing offers under terms and conditions that are questionable, to say the least. We have been analysing collective licensing agreements in Finland, France and the United Kingdom, and we are shocked to see that licenses that have been negotiated by the governmental authorities contain the following:

  • Terms that are contrary to the law (e.g. time or quantity limits that are not foreseen in the law) or abusive (e.g. the obligation on schools to ensure that they have other licences in place before undertaking activities that are covered by copyright exceptions),
  • Terms that impose burdensome obligations on schools (e.g. schools have to ensure that teachers and students comply with the terms of the license and/or take steps to ensure that any breaching activity ceases), and
  • Terms that grant right holders rights not foreseen in the law (e.g. right to enter the schools’ premises to review the implementation of the licenses or the right to require schools to participate in data collection exercises).

IMCO amendment to art. 4(2) is a nice effort, but not enough

Under the Commission’s proposal, any licensing offer can rule out the application of the education exception, thus negating much of the substance and effectiveness of the exception.

The IMCO committee proposed amendment to article 4(2) intended to give precedence only to extended collective licensing (ECL) schemes. As we said back then this represented a progress in relation to the Commission’s proposal, since it reduces the number of agreements “easily available in the market”, avoiding a situation where schools would be subject to an infinite number of individual licensing offers, with different terms and conditions. However, it does not prevent schools from being forced to accept terms and conditions imposed by collective societies under an ECL scheme.

ECL schemes are something alien to most of the Europeans, because so far they have only been implemented in the Scandinavian countries, but everyone should know that, when a collective management organization is approved by a governmental authority to grant licenses for the use of copyrighted works, including for the use of works whose right holders are not represented by such collecting society, there’s an approval decision that functions as a framework for the issuing of individual licenses to users. The terms and conditions of such individual licenses are then drafted by collecting societies, and they are not a mere reproduction of the terms of the approval decision. This means that would-be licensees may or may not have enough bargaining power to change such terms and conditions.

Therefore, if article 4(2) is to be maintained, a much better approach is the one proposed by Ms. Comodini, which gives precedence over the exception only to existing contractual relations.

MEP Comodini draft amendment to art. 4(2) is the wisest proposal on the table

Before leaving the European Parliament, Ms. Comodini proposed an amendment to art. 4(2) (“to the extent that adequate license agreements exist”) under which the unilateral and discretionary offer of the right holder to conclude a licensing agreement (“licenses that are easily available in the market”) would not be sufficient to deny the educational establishment concerned the right to benefit from the educational exception. An existing contractual relation would be needed to override the exception.

Basically, Ms. Comodini followed here the Court of Justice ruling in TU Darmstadt, where the court considered that only in cases where license arrangements already exist can they take priority over the statutory law, and a mere license proposal doesn’t qualify as such.

Certainly, if schools and governments are not obliged to accept any license offer, in order to keep using the protected works under the educational exception, they will have more bargaining power to negotiate an agreement that is not abusive and onerous to them. And they would still have an incentive to buy such licenses, as such agreements normally tend to offer something more than what is covered under the exception. We believe it would be a win-win situation, and we can only hope now that all MEPs can see the fairness and value of it.

Etching of a printer's press by Abraham Bosse.
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