German Media Newsletter, June 2017 | Greenberg Traurig LLP

June 2017

Update: EU Portability Regulation Signed, to Apply from First Quarter of 2018

On June 14, the new EU regulation on the portability of online content was signed by the President of the European Parliament and the President of the Council. The regulation is expected to be officially published in the Journal of the European Union shortly, and will enter into force for all Member States without the need of implementation into national law nine months after its official publication, i.e. in the first quarter of 2018.

The rules aim to ensure that subscribers of online content services have access to such content under the same conditions as in their country of residence when temporarily visiting another Member State. During the time of the stay – which must be “limited in time”, but no maximum time period is given – the service is deemed to occur solely in the Member State of permanent residence. This allows providers to grant access to their service without obtaining a license for such other territories where subscribers are temporarily staying. The regulation will apply to the subscription of audio-visual content and other copyright protected materials or transmissions, such as music, videos, e-books or broadcasts. Contractual provisions circumventing the regulation are unenforceable.

While the portability obligation generally addresses providers of paid-for services, the regulation allows other service providers to opt in voluntarily. These service providers may then also deliver online content to their subscribers when they are temporarily visiting another Member State, subject to the condition that the subscriber’s residence is verified and the subscribers and respective right holders are informed about the provider’s opt-in. The regulation outlines how service providers must verify their subscribers' ordinary residence, but only allows them to check two out of a list of 11 criteria, including inter alia payment details, billing and postal address, IP address, and publicly available tax information as available criteria. Content owners may waive the requirement of verification.

Despite the unclear duration of “temporarily” under the Regulation, operators will need to monitor their subscribers’ user habits. This may be difficult to achieve for for-free services that usually do not have the required technologies in place.

Bavarian Film Fund FFF Bayern Announces Scheme to Support International High-End TV Series

On June 14, Bavarian Film Fund FFF Bayern announced that its subsidy scheme for international co-productions, launched in 2013, will be extended to fund high-end TV series. Serial productions co-produced by a German partner and at least one partner from a non-German speaking country with production costs of at least EUR 1.2 million per 60-minute episode (or EUR 20,000 per minute for shorter episodes) are eligible for funding of up to EUR 2 million if the German contribution to the co-production is 30% or more, or at least EUR 5 million. Also, at least 50% of principal photography must take place in Bavaria. The fund's 2017 budget for the support of international co-productions and high-end TV series amounts to EUR 4.73 million.

Besides FFF Bayern, regional schemes Medienboard Berlin-Brandenburg (MBB), MFG Baden-Württemberg, and Filmstiftung North Rhine-Westphalia offer subsidies for TV series as well as films. Also, since 2016, the federal German Motion Picture Fund (GMPF) has supported international TV series.

ECJ: 'The Pirate Bay' Communicates Protected Works to the Public

On June 14, the European Court of Justice (ECJ) found that the making available and management of an online sharing platform constitutes an act of communication to the public under European copyright rules.

Stichting Brein, a Dutch foundation located in the Netherlands and responsible for protecting the interests of copyright holders, sought an order demanding two internet access providers to block domain names and IP addresses belonging to the online file sharing platform ‘The Pirate Bay’. ‘The Pirate Bay’ allows its users to upload and share files in segments (known as ‘torrents’) directly from their computers, and a substantial number of the users of Pirate Bay partake in file-sharing of copyright-protected works occurring on the platform. The case was brought to the Supreme Court of the Netherlands upon appeal and referred to the ECJ, which was asked whether or not ‘The Pirate Bay’ communicates works to the public within the meaning of Article 3 (1) of Directive 2001/29 (InfoSoc-Directive).

The court held that regardless of the fact that the copyright protected works were uploaded on ‘The Pirate Bay’ by its users, the site's operators play a crucial role in facilitating public access to the works. By categorizing the works based upon numerous factors, the site allows for easy accessibility, and its operators expressly display their intention of making protected works available to users. The court also noted that the site provided this service for profit, generating substantial advertising revenues, and stressed that the works are being communicated to the public in violation of their copyright protection.

European Parliament Demands Raised Quota for EU-made Content for SVOD Services

On May 10, the European Parliament’s culture and education committee proposed amendments to the European Commission's 2016 amendment proposal of the Audiovisual Media Services Directive (AVMS Directive). The 2016 proposal would oblige Member States to ensure that providers of on-demand audio-visual media services secure at least a 20% share of European works in their catalogue; the European Parliament now seeks to raise that quota to 30%. The new proposed amendments also suggest that right holders label audio-visual content that qualifies as a European work in the metadata, so that service providers can easily determine whether works are European or not.

For television broadcasting services, the quota for European works is already at 50% and will not be changed by the proposed amendment of the AVMS Directive. The European Economic and Social Committee (EESC) had previously demanded to align both the linear TV and VOD quotas at 50%.

With its AVMS Directive amendment proposal, the European Commission seeks to react to changes in consumer behaviour and content consumption. Together with the Portability Regulation (see above), the proposal is part of a greater set of new legislative instruments in an attempt to create a digital single market, a main priority under the Juncker Commission’s agenda 2020.