The Return of the EU Copyright Directive and the 'Bestseller Clause'


It has been widely reported in the news that the Members of the European Parliament have voted to approve the revised EU Copyright Directive.

The draft Directive has stirred up a heated debate surrounding Article 11 (the so called 'link tax' – a measure designed to protect press publications from being unfairly shared on other websites without fee) and Article 13 (requiring websites to ensure that no copyrighted material is being illegally uploaded and exploited by their users).

However problematic these provisions may be for Mark Zuckerberg and the other major content curators of the World Wide Web, there are reasons for creatives to be optimistic about the implementation of the Directive.

You may not have seen any discussion in the press about Articles 14, 15 and 16. To briefly summarise these provisions:

Article 14:

gives authors and key performers the right to receive regular information on how their works and performances are being exploited and how much money has been made from them;

Article 15:

a.k.a. the 'Bestseller Clause' - this gives authors and key performers the right to request additional money if it transpires that their fee was disproportionately low compared to how much money was made from exploiting their works and performances;

Article 16:

provides for a voluntary ADR procedure to be available for those with disputes regarding Articles 14 and 15

Producers of the audio-visual arts should take note and prepare for more frequent, and more rigorous, conversations to be had regarding 'back end' remuneration.

The Society of Authors has been vocal in their support for these rights and it is perhaps easy to perceive how they would be applied to the literary world. However, the rights are extended to performers, where the lines become a little harder to define.

For instance, the transparency obligations in Article 14 can only be exercised by performers who provide a significant contribution to the overall work. Where is the line drawn? If we take the example of HBO's Game of Thrones, Kit Harington's performance as Jon Snow is indisputably significant, but what about Kristian Nairn's performance as Hodor?

Interestingly, Article 15 does not contain the same caveat about 'significant contributions' – the performer must simply prove that the remuneration for their performance is 'disproportionately low' in comparison to its exploitation.

The bestseller clause brings to mind the provision under s40 of the Patents Act 1977. Essentially, under patent law if an invention is created by an employee in the course of their employment then the patent rights belong to the employer. s40 states that if the invention is of 'outstanding benefit to the employer' having regard to the size of the employer's undertaking, then the court may order that compensation be paid to the employee if it considers it just to do so.

s40 has had very little impact for employee inventors. There has been only one case (Kelly  v GE Healthcare) in which it was decided that compensation was to be paid to an employee inventor. In the recent high profile case of Shanks v Unilever the Court of Appeal decided that although Unilever had made more than £23million from the employee's invention, no compensation was payable as this amount was dwarfed by the amounts made by Unilever as a whole. They were, as it has been put, too big to pay.

The wording of Articles 14-16 of the EU Copyright Directive is somewhat simpler than that of the Patents Act. Whether or not the author/performer's salary is disproportionate is measured purely against the "subsequent relevant revenues and benefits". Doubtlessly test cases will clarify what constitutes a relevant benefit. Would Oscar success for an otherwise commercially unsuccessful movie constitute a measurable relevant benefit?

The costs of litigation can act as a deterrent for those who feel like they have an otherwise valid claim. Article 16 may mitigate this as it expressly provides that disputes may be submitted to a voluntary ADR procedure, which may increase the number of claims. We will have to see which Alternative Dispute Resolution procedure the UK government chooses to adopt before we can assess how frequently disputes of this nature will arise.

Nothing is set in stone just yet. The Directive must still pass another vote in January 2019 and, with the Brexit deadline creeping closer and closer, even if it passes the UK might not necessarily need to implement it!

Tune in next season to see how this cliffhanger unfolds.

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