Commission's Notice on Brexit and copyright: any original content?

The Commission recently issued a Notice highlighting a number of copyright measures, which, absent any agreement between the UK and EU, the UK will no longer benefit from on Brexit. These measures are of a cross-border nature or are forms of unique EU law and relate to broadcasting, portability of online content, the sui generis database right, orphan works, access to published works for the visually impaired and collecting societies. Whilst the Notice is welcome, it does not cover all of the potential impacts of Brexit on UK and EU copyright.

On 28 March 2018, the EU Commission released its Notice on the consequences of Brexit in the field of copyright. It follows similar communications on the consequences of Brexit in a number of areas, including trade marks and designs (see our commentary here and here). The thrust of the Notice is that the UK will no longer benefit from certain cross-border measures and forms of unique EU law ("lex specialis") on Brexit.

Before considering the six specific areas highlighted, it is worth considering some preliminary points.

• The Notice assumes that no deal is reached between the UK and EU on the issues highlighted. It is quite possible that the UK and EU will agree an alternative approach. Indeed, there has already been agreement in principle on the continued recognition in the UK, at least, of sui generis database rights in existence as at Brexit.
• We do not yet know what the UK government's position is on any of these issues. Theresa May's 2 March 2018 speech makes this hard to predict: while she wants some alignment on IP, she also wants the ability to diverge on the digital single market, which itself consists of a package of measures dealing with IP.
• The Notice does not cover all of the potential impacts of Brexit on copyright. In particular, it does not cover exhaustion or the rules around qualification for copyright – see below.
• Parts of the Notice seem to suggest that substantive UK copyright law will automatically change on Brexit. In particular, the Notice states that EU rules in the field of copyright will no longer apply, with UK copyright laws instead being governed by various international treaties such as the WCT and TRIPS, none of which (according to the Commission) gives the same type or level of protection as existing EU laws. Whilst it is true that the cross-border measures and forms of lex specialis highlighted in the Notice are not mirrored in the international treaties, it is disingenuous to suggest that all EU copyright laws will cease to apply in the UK as at Brexit. EU laws aimed at harmonising EU copyright have been implemented in the UK. Furthermore, substantive UK copyright law will not change on Brexit unless the UK government elects to do so – and we don’t know its plans, if any, yet. On the whole, substantive UK law provides for at least as high a level of protection for copyright owners as EU law and goes beyond the requirements of the various international treaties covering copyright.

The specific measures highlighted in the Notice are as follows.

• Broadcasting. The SatCab Directive (Directive 93/83/EEC) provides that the act of "communication to the public" by satellite occurs solely in the EU member state where the broadcast signals are introduced. It means that broadcasters providing cross-border satellite broadcasting services only have to clear the satellite communication to the public rights in the EU member state where the broadcast signals originate, not where they are received. In practical terms, it means that UK-based satellite broadcasters can broadcast into any EU member state having cleared those rights only in the UK. As at Brexit, SatCab will no longer apply to the UK. According to the Notice, UK-based satellite broadcasters will therefore have to clear rights in all member states to which their signals reach. Although the Notice does not say as much, we presume that this means that the requirement to clear in the place(s) of reception will depend on what the local laws require (see, by way of analogy, section 6A of the CDPA 1988). The Notice also says that EU-based satellite broadcasters will have to clear rights in the UK when providing cross-border satellite broadcasting services to customers in the UK but, again, that will be subject to section 6A. The net result is that it risks driving satellite broadcasters away from the UK (although losing the benefit of the Audio Visual Media Services Directive (Directive 2010/13/EU) and its successor will likely be a more important factor in such decisions). Whilst it is clear that the UK government is aware of the particular issues affecting the broadcasting industry – Theresa May specifically referencing them in her 2 March 2018 speech – there is (as yet) no official indication of how or whether they will be resolved.
• Portability of online content. Regulation 2017/1128, which came into force on 1 April this year (and is already effective), allows EU-based subscribers of online content services to access content whilst temporarily in other EU member states. This means that UK residents who have, for example, subscribed to Netflix are able to access their UK services whilst temporarily in other EU member states (for example, on holiday). As at Brexit, this will no longer be the case. If UK providers wish to allow subscribers to continue to have access to UK services whilst travelling in the EU they will have to clear giving such access in the relevant member state(s). Likewise, EU subscribers will not be able to access their EU services in the UK without their service first having cleared the UK rights. Again, whilst the UKIPO has specifically acknowledged this issue and invited continued dialogue with stakeholders, there is (as yet) no formal indication of whether a solution can or will be found.
• Database rights. Directive 96/9/EC established a sui generis database right for producers of databases. The right, valid for 15 years, recognises the investment of time, money and effort made in compiling a database irrespective of whether it is sufficiently creative. (Creative databases benefit from copyright protection.) However, only EU nationals, those habitually resident in the EU and entities formed or established under the law of an EU member state are able to benefit from the right. The Notice points out that UK nationals, UK residents and entities formed in accordance with UK law will no longer be entitled to maintain or obtain the benefit of the sui generis database right in respect of databases in the remaining EU27 member states on Brexit. Likewise, EU27 nationals, EU27 residents and entities formed in accordance with the laws of any of the EU27 member states will no longer be entitled to maintain or obtain the benefit of the sui generis database right in respect of databases in the UK. However, the UK has agreed in principle (in the draft Withdrawal Agreement) to allow holders of sui generis database rights which arise before Brexit to continue to benefit from such rights in the UK for at least the remaining term of their protection. Unfortunately, the remaining EU27 member states have not yet indicated whether or not they will reciprocate such that UK-based database producers continue to have the benefit of existing sui generis database rights in such member states post-Brexit. If they do not, then such rights will fall away on Brexit. As regards new databases created after Brexit, nothing has yet been agreed. Unless the EU27 member states amend their national laws to explicitly include the UK, new UK databases will be given no sui generis protection in the EU27 on Brexit (although the EU Council does have power to extend the right to countries outside of the EU who offer a similar level of protection for databases). It is therefore possible that a reciprocal arrangement will be put in place which maintains the current regime. Having said that, it is not even clear that the UK will wish to retain the sui generis database right. It is quite possible that it will amend the existing law or return to the pre-Directive scenario for the protection of databases. Similarly, some have called upon the Commission to abolish the sui generis database right and the final outcome of the EU's consultation on the effectiveness of the regime has not yet been released.
• Orphan works. An orphan work is a copyright work for which one or more of the right holders is either unknown or cannot be found after a diligent search. Under Directive 2012/28/EU, certain cultural institutions (such as publicly accessible libraries) in the EU are permitted to digitise and make available online in all member states any copyright works recognised as orphan works in one member state. As at Brexit, this system of mutual recognition will no longer extend to the UK. Accordingly, works recognised as orphan works in the EU will no longer be recognised in the UK (and vice versa) under the Directive. The net result is that cultural institutions in the UK will no longer be able to make available works recognised as orphan works in other EU member states. At this stage, it is unclear whether works already recognised as orphan works in the EU will still be recognised in the UK (and vice versa) on Brexit. Legislative changes would be necessary in the UK (and possibly the remaining EU27 member states) to allow for this. What we do know is that, without a deal, the mutual recognition system will end for works recognised (post-Brexit) as orphan works. It is also unclear – and the Notice does not mention - how the EUIPO's database of orphan works will be affected by Brexit. In particular, there is no discussion of whether the database will be amended to reflect the fact that the UK is no longer part of the regime. Likewise, the UK government has not yet indicated whether notices given by right-holders to the EUIPO to put an end to orphan work status will be effective in the UK and how the UK's orphan works licensing scheme might be amended, particularly in terms of the diligent searches that are required.
• Access to published works for the visually-impaired. Directive 2017/1564 - which implements the Marrakesh Treaty - allows EU-based blind, visually impaired and print-disabled persons to obtain accessible versions of books and other copyright works from authorised entities in the EU. As at Brexit, UK-based persons will no longer be able to obtain the benefit of this provision, severely limiting their access to books and other works. Likewise, authorised entities and beneficiary persons in the EU will not be able to obtain accessible format copies of works from authorised entities in the UK. Whilst the UK has the option of itself joining the Marrakesh Treaty when it leaves the EU, the government has made no announcement on this so far.
• Collecting Societies. EU collecting societies (also known as Collective Management Organisations) will no longer be obliged to represent UK-based collecting societies (and vice versa) for multi-territorial licensing of musical works for online use in accordance with Article 30 of the Collective Rights Management (online rights in musical works) Directive (Directive 2014/26/EU). While the Notice does not mention it, it is worth noting that the Directive also provides that rights holders may authorise any collecting society to manage their rights irrespective of the nationality, residency or place of establishment of the right-holder. Similarly, collecting societies must adopt non-discriminatory criteria for membership. Presumably, it will be open to collecting societies to refuse to represent and refuse membership to those in the UK on Brexit.

Whilst the Notice will be welcomed by stakeholders, it does not cover all of the ways in which Brexit will affect the EU copyright acquis. Important issues on exhaustion and qualification for copyright also arise, for example, alongside other subsidiary issues such as the application of the right of first publication.

• Exhaustion. Absent any agreement to the contrary, copyright protected goods first put on the market in the UK post-Brexit would not exhaust the distribution right of the right holder in the EEA. The right holder could therefore oppose the import of such goods into the EEA. Likewise, rights holders could (assuming the UK adopts national exhaustion post-Brexit) object to the import into the UK of copyright protected goods first marketed in the EEA. The UK government has agreed in principle (in the Withdrawal Agreement) on a transitional arrangement as regards exhaustion of intellectual property rights which will allow rights exhausted in the UK and EU pre-Brexit under EU law to remain exhausted after Brexit in both territories. Presumably, this is intended to extend to the copyright distribution right, as well as trade marks, although this has not been made explicit. If so, the Copyright Directive (Directive 2001/29/EC) will need to be amended to reflect this transitional arrangement. Assuming that it does apply to the distribution right, it is likely that those in the supply chain will have to manage two different regimes: one governing goods first put on the market pre-Brexit and one governing those first put on the market post-Brexit. Determining whether a particular batch of goods was first marketed pre- or post- Brexit will be a difficult task.
• Qualification for copyright. The UK will need to consider how it is going to treat EEA nationals in terms of qualification for copyright – and that will likely depend on what the remaining EU27 member states offer in return (although the room for manoeuvre should be limited by international copyright treaties' requirements of national or reciprocal treatment of UK and EEA nationals). For obvious reasons, the Notice does not cover how the remaining EU27 member states' legislation might need to be amended as regards the UK on Brexit. Amendments are likely to be needed to national member states' legislation to allow UK nationals to qualify for copyright in such member states and to enjoy the same extent and duration of protection as they currently have.

Given the nature and complexity of some of these issues, it is likely to be some time before stakeholders obtain clarity. In the meantime, the Commission's Notice is a good starting point for considering some of the potential consequences of Brexit in the field of copyright.