Technology and Intellectual Property | Proposed amendments to the Norwegian Copyright Act – Impacts on rightholders and users

The Norwegian Ministry of Culture and Gender Equality (“Ministry”) has suggested a number of amendments in the Norwegian Copyright Act (“NCA”). The main purpose of the proposal is to incorporate the Digital Markets Directive EU 2019/790 (“DMD”) and Directive EU 2019/789 in Norwegian law. In this newsletter, we summarize the amendments we believe will have the most significant impact on the activities of technology companies.

Introduction

The proposal from the Ministry contains amendments intended to strengthen the position of rightholders, inter alia by imposing a direct liability on providers of content sharing platforms, for clearing copyrights with rightholders. However, the proposal also involves amendments which impede the rightholders’ scope of protection, most notably through the proposed expanded access to text- and data mining.

In this newsletter, we summarize the amendments we believe will have the most significant impact on the activities of technology companies, such as the proposed provisions on text and data mining, protection of press publications, platform liability, the suggested contract adjustment mechanism for copyright royalties, the potential consequences of non-use of a licensed work and the establishment of a new Norwegian Copyright Tribunal.

The proposal was circulated for hearing on 22 November 2023 and the deadline to submit responses to the hearing is 15 March 2024.

Text and data mining

The proposal provides expanded access to data mining both for research purposes and other purposes, in accordance with DMD Articles 3-7. Text and data mining involves digitally analyzing large amounts of text and/or data in order to uncover patterns, trends, and other meaningful information. The output or result of the mining does not contain the text itself, but rather patterns and information derived from large amounts of data. Text and data mining is of importance in many scientific fields, including medicinal research on genes and disease correlations. Text and data mining is also critical to the development of AI-tools, which are developed and improved by analyzing large amounts of data.

The act of data mining involves reproduction of text and data which may be protected by copyright or sui generis database rights. Therefore, text and data mining currently generally requires the consent of the rightholders.

According to the proposal, the reproduction of protected data shall be permitted, without the rightholders’ consent, provided that the user has lawful access to the data in question. However, data mining for non-research purposes shall only be permitted if the rightholder has not expressly reserved such rights. Rightholders may prevent data mining by attaching a clear and machine-readable statement of reservation to the data in question. According to the proposal, the application of technical protection measures (TPMs) to prevent data mining, may serve as a statement of reservation. Whereas the burden of clearing copyrights or database rights currently lies with the users, the proposal shifts the burden from the user to the rightholder by permitting datamining to the extent that such acts are not explicitly reserved by the rightholder. Thus, the proposal is presumed to imply higher administrative costs for rightholders. Furthermore, according to the proposal, any reservations by the rightholder shall be without effect on acts of data mining for research purposes.

Although the proposal provides users significantly expanded access to data mining, it must be borne in mind that the right to data mining is restricted to reproductions of works for the purposes of analysis. Data mining does not involve making the analyzed works available to the public, by displaying or otherwise sharing the works with others. Thus, the protected works cannot be made available to the public in the form of output or results from the data mining process. Data mining also involves a responsibility to ensure the safety and integrity of the data in question.

By facilitating data mining, the proposal is an important aid for developers of AI-tools. However, neither the DMD, nor the proposal from the Ministry, aim to answer another much-discussed question surrounding AI and copyright law, namely whether works created by AI can be subject to copyright protection.

A new layer of protection for press publications

The proposal from the Ministry grants press publishers a new exclusive right to their publications. Currently, only the individual creator of the content of a media publication (e.g. text or photographs) are granted copyright protection, which may in turn be assigned to the publisher.

However, the proposal grants publishers an independent exclusive right to their publications, in accordance with DMD Article 15. Press publications are defined in DMD Article 2, no. 4, as follows:

“a collection composed mainly of literary works of a journalistic nature, but which can also include other works or other subject matter, and which:

(a) constitutes an individual item within a periodical or regularly updated publication under a single title, such as a newspaper or a general or special interest magazine;

(b) has the purpose of providing the general public with information related to news or other topics; and

(c) is published in any media under the initiative, editorial responsibility and control of a service provider.”

The purpose of this new exclusive right is to make it easier for publishers to recover their organizational and financial investments. The proposed right for media publishers can only be invoked against online use of media publications by information society service providers. The right does not prevent private or non-commercial use of the publications by individual users. Further, this right does not prevent the reproduction of single words or very short extracts of a publication.

According to the proposal, this new right entails a new “layer” of protection for media publications and does not restrict the rights of the authors of the works included in the publication, nor does it entail an extended scope of protection for works that are no longer subject to by copyright protection.

As for the duration of the exclusive right granted to publishers, it is suggested to be two years, counting from the 1 of January in the year of the publication of the first individual work in the collection. This entails that publications made late in the year will effectively have a shorter de facto duration of protection, compared to publications made in the beginning of a calendar year. Adding new publications to the collection, does not extend the granted protection. The new layer of protection for press publications may increase the financial and administrative costs of information society service providers. However, seeing that press publications are generally already subject to copyright protection, the consequences of this amendment are presumed to be limited.

Platform liability – an impossible balance?

In recent years, the number of online platforms for the dissemination of user generated content has increased significantly. YouTube and Instagram are amongst the most widely known examples of such platforms. Platforms for sharing user generated content facilitate easy access to a variety of cultural and creative works. At the same time, the increasing number of such platforms has also resulted in the unlawful dissemination of protected works without the rightholders’ consent. This has given rise to legal questions of whether the service providers independently infringe upon others’ exclusive rights, by facilitating users’ copyright infringements.

Currently, The Norwegian Copyright Act contains no provisions that specifically regulate the liability of platform providers for content uploaded by their users. The proposal imposes a direct copyright liability for online platform providers, for the content disseminated on their platforms, including content uploaded by their users. The proposal incorporates the DMD Article 17. According to the proposal, platform providers will as a point of departure be liable for the dissemination of works on their platforms. Should protected works be disseminated without consent, the platform provider will nevertheless be free of any liability if it can prove that it has:

made its best efforts to obtain an authorisation (DMD Article 17, nr. 4, litra a);
made best efforts to ensure the unavailability of specific works and other subject matter for which the rightholders have provided the service providers with the relevant and necessary information; (DMD Article 17, nr. 4, litra b); and
acted expeditiously, upon receiving a sufficiently substantiated notice from the rightholders, to disable access to, or to remove from their websites, the notified works or other subject matter, and made best efforts to prevent their future uploads in accordance with point (b) (DMD Article 17, nr. 4, litra c).

In accordance with DMD Article 17, no. 6, a lesser liability is imposed on providers of platforms that have been available to the public for less than three years and that have an annual turnover below EUR 10 million.

The proposed rules on platform liability impose a difficult balance on platform providers. The rules require that platform providers invest significant time and effort preventing the unlawful dissemination of protected works. On the other hand, platform providers are obliged to ensure that the lawful dissemination of works is not hindered. In the proposal, the Ministry admits that these rules impose an impossible balance on the platform providers. Interestingly and in attempt to resolve the conflict, the Ministry states that the platform providers’ obligation to not hinder the lawful dissemination of works shall take priority over their obligation to prevent unlawful dissemination of protected works. This is to the benefit of the users of such platforms and to the disadvantage of the rightholders. To further support the users’ right to lawful dissemination of works, the platform providers shall also be obliged to process users’ complaints about the platform providers’ decisions to remove content uploaded by them, in accordance with DMD Article 17 no. 9.

It is pointed out by the Ministry, in accordance with DMD Article 17. no. 8, that DMD Article 17 does not entail a general obligation to monitor all content on a provider’s platform. This entails that the platform provider’s responsibility is not to make individual pre-assessments of all contents shared on the platform. The platform providers are only expected to filter content by way of automatic means which are sufficiently able to distinguish between lawful and unlawful content. An individual human assessment will only be required if a user complains about the platform providers’ decision to remove content uploaded by them. However, in order to avoid liability, a platform provider may need to monitor certain specific situations, e.g. to prevent the dissemination of works that have previously been determined to be unlawful.

Contract adjustment mechanism

The Ministry’s proposal incorporates the contract adjustment mechanism set forth in DMD Article 20. This provision entitles rightholders to claim additional remuneration from a licensee, when the original agreed remuneration turns out to be disproportionately low compared to all the subsequent relevant revenues derived from the exploitation of the works or performances.

Combined with the proposed transparency obligation, the proposal is presumed to strengthen the rightholders’ position and entail increased level of remuneration to rightholders for the exploitation of their works. The contract adjustment mechanism shall not apply to collective bargaining agreements.

Non-use of licensed works and transparency obligations

In its proposal, the Ministry grants rightholders who have transferred or licensed their works on an exclusive basis, the right to revoke the license in case of lack of exploitation of the works in question. The proposal incorporates DMD Article 22.

According to the proposal, the right of revocation applies not only where the licensee does not use the work at all, but also where the work is not being sufficiently exploited within a reasonable time period. The scope of the right of revocation must be assessed on a case-by-case basis and will depend on the nature of the works in question.

The proposal also incorporates the transparency obligations set forth in DMD Article 19, obliging licensees to provide information about the exploitation of the licensed works on a regular basis. The transparency obligation enables rightholders to assess whether the licensed works are sufficiently exploited.

The right to revocation and the transparency obligations will presumably increase the licensees’ administrative costs and create uncertainty surrounding the level of remuneration, which may potentially negatively affect the level of investments in protected works. On the other hand, the requirement may increase the value of acquired or licensed works by potentially incentivizing increased investments in such works.

The establishment of a new Norwegian Copyright Tribunal

Currently, disputes regarding the calculation of equitable remuneration for protected works may be heard by the Norwegian Remuneration Board (No: Vederlagsnemda). The Ministry has proposed expanding the competency of the existing Remuneration Board, to include other disputes regarding obligations stipulated in DMD and Directive EU 2019/789, thereby establishing a new Copyright Tribunal. The Copyright Tribunal shall conduct mediations as well as provide judgements. The Copyright Tribunal shall also be able to provide non-binding preliminary expert opinions in certain cases. The amendment aims to facilitate a simple, affordable, and swift dispute resolution mechanism, as an alternative to regular court proceedings. It is assumed that especially less resourceful actors will benefit from the new dispute resolution scheme that is proposed.