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Copyright Protection for Quotations? An Explainer on Ancillary Rights in Europe

· November 21, 2014

News media [1, 2, 3, 4] and previous DisCo posts [1, 2, 3, 4] have reported on several European countries’ efforts to create a so-called “ancillary right” in newspaper text and headlines.  This right would limit the ability to quote from or link to online news without paying a fee.  These proposals tend to be geared toward providing an additional revenue stream for news publishers, and in effect prevent search engines and online news aggregators from displaying excerpts from articles without a license.  This post aims to answer some of the common questions about ancillary rights.

[February 9, 2015 Update: For more information, see CCIA’s new Understanding “Ancillary Copyright” in the Global Intellectual Property Environment white paper and CCIA’s new Ancillary Copyright resources page.]

What are ancillary rights?

The term “ancillary rights” is sometimes used to describe exclusive rights that provide copyright-like protection and remedies to something that is conventionally viewed to be outside the scope of copyright.  Lawyers sometimes refer to similar concepts using terms like “neighboring rights” or “paracopyright.”  Sort of like copyright, but not really; ancillary rights in news headlines would exist outside of (and perhaps even in violation of) the established international copyright system.

These proposals have also been described more prosaically, for example as a “snippet tax” or “snippet subsidy.”  It is also sometimes called the “Google tax” since the search company is one of the intended targets, but these proposals would affect many companies beyond Google, potentially including search, social media companies, and blogs.  The ancillary right law enacted in Germany is referred to in Germany as the Leistungsschutzrecht.

How do these ancillary rights work in practice?

According to the Leistungsschutzrecht adopted by the German legislature in 2013, the “smallest text excerpts” are protected by copyright which the news publishers interpret to include snippets.  In Germany and Spain, legislators have anticipated that the rights would be administered by a collecting society – a bureaucracy that functions in order to collect the “tax” and distribute proceeds to news publishers.  Thus, to exercise the new right, publishers supportive of the ancillary copyright transferred their rights to a collecting society which then sued several online aggregation services for using snippets without having required a license.

Some online services responded by completely de-indexing links to content from publishers who are represented by the newly created collecting society.  Others kept the hyperlink but stopped the display of snippets.  In the case of Google, the German competition authority declared this reaction as legal since the law in no way requires any service to get a license for the display of snippets.  This came as a response to publishers’ claim Google was abusing its dominant position.

Spain’s reaction to Germany’s experience with its law was to frame their ancillary copyright as an exception with a ‘fair compensation’ requirement and to include a non-waivability provision.  This means that online services benefit from an exception for the provision of content aggregation services in return for a payment which is referred to as fair compensation.  The amount of that payment will be determined by a collecting society and would likely stand under political influence.  Under the non-waivability provision rights-holders are prevented from waiving their right – i.e. they have to be compensation even if they use a creative commons license or simply desire to distribute their content as widely as possible.  The law passed the Spanish legislature a month ago and its practical implementation remains to be seen.  There are, however, serious legal concerns as to the law’s compatibility with EU and international law.

Where have ancillary rights been an issue?

Belgium:  The roots of this movement may lie in the Belgian Copiepresse case, in which Belgian news publishers successfully sued Google over news aggregation, arguing that quoting news headlines and snippets of text infringed copyright.  (The publications later returned to the service, because within days of the remedy being implemented, newspapers complained about being inaccessible, leading to a subsequent agreement that reinstated linking.)

France:  In early 2013, responding to complaints from French news publishers, Google created a €60M “Digital Publishing Innovation Fund” aimed at stimulating innovation in French news media.

Germany:  Following on the heels of that announcement, German news publishers began agitating for a free-standing IP-like right in news headlines (which we’ve discussed here and here).  Although the German legislature acceded to these demands and enacted the Leistungsschutzrecht, German publishers subsequently changed their minds due to the “major economic pressure” of the lost revenue from online news search services.

Italy:  Italy also considered a similar bill.

Austria:  In Austria the first version of a copyright reform bill included the introduction of an ancillary copyright which largely mirrored the German Leistungsschutzrecht.  However, it is uncertain whether this provision will remain in the final version of the reform.

Spain:  A few weeks ago, Spain passed an omnibus IP reform that includes an ancillary right, locally referred to as “canon AEDE”, which DisCo analyzed earlier this year.  (More extensive scholarly analysis here.)

Sweden:  A member of the Swedish parliament announced last week interest in a “link tax” for newspapers.

The EU:  The new EU digital commissioner recently discussed a potential EU-wide copyright levy: “If Google uses and processes intellectual property from the EU, the EU can protect this property and can demand a charge.”

What are some complaints about ancillary rights?

A key issue with these laws is that they violate international trade obligations.  As DisCo has explained before, a “quotation tax” is likely in violation of the Berne Convention, which prohibits nations from restricting the right to quote.  Article 10(1) of the Berne Convention provides:

It shall be permissible to make quotations from a work which has already been lawfully made available to the public, provided that their making is compatible with fair practice, and their extent does not exceed that justified by the purpose, including quotations from newspaper articles and periodicals in the form of press summaries.

Additionally, these proposals are hard for all companies to implement, and have been criticized as particularly bad for startups and competition, as new services will not be able to afford to comply.

Many of these laws have also been ambiguously written, which exacerbates problems with implementation and may deter services from offering new features due to financial risk.

Overall, these ancillary rights tend to benefit domestic news publishers at the expense of mostly foreign Internet services, making them appear protectionist.

Intellectual Property

The Internet enables the free exchange of ideas and content that, in turn, promote creativity, commerce, and innovation. However, a balanced approach to copyright, trademarks, and patents is critical to this creative and entrepreneurial spirit the Internet has fostered. Consequently, it is our belief that the intellectual property system should encourage innovation, while not impeding new business models and open-source developments.