Interview in the journal Neue Juristische Wochen­schrift (NJW) – Germany’s publishers take on Google

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It seems they will not be friends, Germany’s publishers and Google. In February, they met before the Regional Court of Berlin. Market abuse is the accusation made by 41 publishers against the search engine operator. At the end of the day, the publishers were on the losing side – and that despite the legislator equipping them with an ancillary copyright three years ago. The question is, however: how effective is that right if they are up against an enormously powerful search engine operator which is virtually able to dictate its conditions to publishers for the use of their journalistic content? That is what NJW wanted to know from Prof. Dr. Jan Bernd Nordemann, attorney at law specialising in, amongst other fields, copyright law and media law, who without representing publishers in court wrote an expert opinion for the small and mediumsized publishers involved in the proceedings before the Regional Court of Berlin.

NJW: Prof. Nordemann, press publishers have had an ancillary copyright for almost three years now. What does this right cover?

Nordemann: The ancillary copyright affords press publishers the exclusive right “to decide how, when and by whom the press content they produce is made available to the public”. This concerns primarily a use of press content on the internet. One group which the legislator had in mind in this respect was aggregators of news content, especially internet search engines. Internet search engines regularly make press content available to the public on the internet in that they display press content in their search results, at least in the form of extracts or thumbnails. The only exceptions are where “individual words” or “the smallest text extracts” are used, in which case the ancillary copyright would not apply. What precisely that means is a topic of much debate amongst us lawyers. The Board of Arbitration at the German Patent and Trade Mark Office was of the opinion, in a first landmark decision in September 2015, that the relevant threshold was seven words. This threshold would mean, for example, that Google’s search results would be covered by the ancillary copyright and Google would thus require authorisation to use the respective content, in particular insofar as the normal display of text extracts and thumbnails in the list of search results returned by Google are concerned.

NJW: Why do publishers need an additional protection right in addition to copyright?

Nordemann: Digitalisation has led to massive upheaval in the media industry. Press publishers are a good example of this. In the digital world, they have had to adapt their traditional business model. New opportunities for using, exploiting and monetising press content have emerged. When introducing the ancillary copyright, the German legislator wanted to protect press publishers against systematic access to publishers’ output free of charge, especially by search engines. Copyright would possibly not quite suffice in this context: according to the opinion of the Board of Arbitration, the ancillary copyright ensures, for example, that all press content which does not fall below the “seven word threshold” is protected. In the case of copyright, ascertaining what is protected is much more complex: a clear, quantitative threshold cannot be used as a basis, instead a distinction is drawn along qualitative lines as per Sec. 2 (2) German Copyright Act. Only personal intellectual creations are protected as text under copyright law. The CJEU once stated, in its Infopaq decision, that even just eleven words could be protected by copyright. However, that is only a “could” decision, which is further dependent on whether those eleven words also constitute a personal intellectual creation. The ancillary copyright has therefore created a much more reliable threshold above which any relevant use is said to begin. This in turn means that the ancillary copyright lends itself much more readily to mass monetisation, for example through a collecting society.

NJW: Nevertheless, Germany’s publishers recently lost a case against Google which concerned, amongst other things, precisely this ancillary copyright. What was that case about exactly?

Nordemann: The situation regarding the assertion of ancillary copyrights by press publishers is somewhat complicated. Many press publishers placed their rights with the collecting society, VG Media. VG Media set tariffs for the use of ancillary copyrights in the area of digital media, in particular by search engines. Those tariffs were then checked by the board of arbitration. The relevant decision is the one I mentioned earlier. As Google correctly assumed – as the board of arbitration later confirmed – that continuing to display search results would constitute a relevant use of the ancillary copyright and that consequently payment would be due to VG Media, Google approached the press publishers as the original rightholders. Google first demanded that the press publishers who had placed their rights with VG Media declare that they consented to their content being included in Google News free of charge (so-called “opt-in system level 1”). However, Google apparently did not pursue that system any further. Instead, Google later sent additional letters to the VG Media press publishers demanding that they declare their consent to snippets and preview images being made available to the public in Google search results for free. If consent was not forthcoming, Google announced, the press publishers’ content would not be completely removed from the search results but that they would at least completely refrain from displaying snippets and preview images (so-called “opt-in system level 2”), whilst the content of other press publishers would continue to be displayed, as before, with snippets and preview images in the search results. Faced with a potentially serious loss of traffic, all press publishers for whom VG Media administers the respective ancillary copyrights ultimately granted consent not only to “opt-in system level 1” but also to “opt-in system level 2”.

NJW: Why did the press publishers choose to take the antitrust law route?

Nordemann: In my opinion, that is indeed the correct legal remedy. Google was only able to insist that the publishers grant consent free of charge to the use of their ancillary copyrights because Google holds a dominant market position. In the case of an abuse of a dominant market position, however, antitrust law provides for claims, in particular claims for injunctive relief as are now being asserted in court proceedings. I cannot currently see any other grounds for action. In particular, search engines are not subject to any special regulation of market power under copyright law.

NJW: Does this not constitute somewhat contradictory behaviour on the part of the publishers as they first granted Google the right to use their content free of charge before then attempting to prohibit that company from abusing its market power by way of an action for injunctive relief?

Nordemann: I do not see that as being a contradiction. Google accounts for over 90% of all searches in Germany, thus it clearly has a dominant market position in respect of searches in Germany. A dominant market position is assumed, under the German Act Against Restraints of Competition (Sec. 18 (4) GWB) from as little as 40% market share – Google has over twice that. In fact, this can be described as a virtual monopoly. The virtual monopoly in search then also provides a dominant market position on the other affected markets, in particular on the relevant market for booking search related advertising and on the so-called indexing market, namely the market on which Google requests the listing of websites for its search engine. It is on this indexing market that Google encounters the press publishers who grant Google consent to use.

If they now have an unavoidable market partner in Google and that partner threatens them with restricted listing, in my opinion it is immediately understandable that the publishers would acquiesce to that request. That does not mean, however, that the request is lawful. It is precisely this which can be examined under antitrust law.

NJW: The court did not see any abuse of market position on the part of Google. Are you convinced?

Nordemann: The Regional Court did indeed assume a prevailing interest of Google in continuing to operate its business model in which there is no space for paying for the use of press content. According to the court, the equilibrium of the balanced system within which search engines operate would be disrupted by any obligation to pay remuneration to press publishers for indexing press content.

That may seem plausible at first glance, however it is not convincing upon further scrutiny. Google’s interest in continuing its business model of free-of-charge indexing of websites has now been pierced by the decision of the legislator only to allow that indexing generally with the consent of the proprietor of the ancillary copyright. This general decision on the part of the legislator must be afforded considerable weight when ascertaining whether an abuse of market power has occurred. No matter how controversial the ancillary copyright was politically and what one’s own political opinion of it is: the German legislator introduced the new right with the clear objective of enabling press publishers to monetise search machine use. With its introduction of the ancillary copyright, the German legislator thus specifically expressed a clear rejection of the free-of-charge display of press content in search engines.

In my opinion, one should not be allowed to deny Google the option of taking the business decision not to display any press content in search results or to reduce what is displayed so that it no longer falls within the ancillary copyright. In my opinion, however, Google cannot be permitted simply to force the publishers to grant consent to use free of charge. That is not in the interests of competition, namely keeping markets open, a factor which is always a key criteria considered when ascertaining an abuse of market power. By forcing publishers to grant consent free of charge, Google denies its competitors the chance of licensing the ancillary copyright and using it to its fullest extent in order to obtain a competitive advantage over Google. In fact, this consent free of charge even represents a competitive disadvantage for competing search engines because Google’s competitors do not possess enough market power to be able to demand free-of-charge consent from the publishers. In addition, it must be said in respect of the abuse of exploitation, that absolute rights generally may not be ceded free of charge.

NJW: What does that say about the significance of ancillary copyright?

Nordemann: The case before the Regional Court of Berlin shows that the German legislator has generally achieved its goal of creating an absolute right for press publishers which enables them to make the use of press content in the form of result lists or thumbnails by search engines monetisable. The fact that Google has been able to avoid this monetisation for now can only be attributed to the special market power which Google holds. In my opinion, antitrust law cannot allow the situation to continue as it is. Google’s current practice will also lead – as already mentioned – to an impediment of competing search engines.

NJW: Where do we go from here?

Nordemann: The case is going before the antitrust senate of the Court of Appeal in Berlin (“Kammergericht”). It is expected that the losing party will then take the case to the German Federal Court of Justice. The proceedings before the Board of Arbitration already mentioned will also proceed through the various legal stages. The ancillary copyright will have to prove itself. If one wants to take the legislator’s intention seriously, the result will likely be that Google will either pay the same fair amount as competing search engines or will no longer be able to use press content in a manner which has an ancillary copyright relevance. We can certainly expect an interesting few years ahead of us in clarifying the situation.

Reform of EU Copyright Law – Proposals by the European Commission for a digital single market

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“Copyright is everywhere”: In the digital knowledge and entertainment society of today, copyright law controls the distribution and use of content. Jean-Claude Juncker, President of the European Union has also recognised this. When Jean-Claude Juncker announced his five priorities for the 2014 election to the office of President, his stated first priority was copyright law. He realised that the potential of digital technologies that know no borders must be fully exploited. “To do so, we will need to have the courage to break down national silos in telecoms regulation, in copyright and data protection legislation”. The goal: the creation of a “Digital Single Market” (DSM) within the EU.

On 14 September 2016, the European Commission presented proposals for a copyright law reform. The object of these proposals is not just an improved digital distribution of copyright protected content. The intention is also to produce a “fairer and sustainable marketplace” for creators, the cultural and creative industries and the press.

1. More choice and easier access to content

The Commission took a first step towards the better integration of the digital markets within the EU back in December 2015 when it presented a proposal on the portability of online content services. That proposal would allow Europeans to take their online content, which they use legally in their home country, for example via subscription models, with them on temporary stays abroad, on trips, for example.

The European Commission subsequently, on 14 September 2016, submitted further proposals for easier access across borders:

  • For broadcasting companies, the clearance of rights for EU-wide broadcasting of their programmes on the internet will be simplified significantly. This also includes the catch-up services of these broadcasting organisations, such as the ZDF Mediathek in Germany. In future, the country of origin principle will apply meaning that broadcasting organisations will only have to clear the necessary rights in their home country.
  • Moreover the territoriality of copyright law will be softened to the benefit of IP TV providers (e.g. Deutsche Telekom’s IPTV Entertain). They will now have the ability to obtain a licence for the simultaneous, unmodified and complete retransmission of channels originally broadcast elsewhere in the EU via collecting societies. In particular, providers of packages of channels will be able, under the new rules, to make a select package of TV channels available to the entire EU via IP TV. These licensing options shall not, however, be available for platforms which operate through the open internet, for example Zattoo.
  • These proposals are only consistent with regard to the realisation of a Digital Single Market. It remains to be seen, however, whether there is an actual corresponding demand for a Digital Single Market. The softening of the territoriality principle can also make legitimate price differentiation by rights holders more difficult or even impossible. For example premium content in professional football: the consumer prices outside the country where the league is located could increase while the consumer prices within that country remain stable.
  • In addition, the Commission also proposes a facilitation of access for museums, archives and other facilities through a new Copyright Directive. They should retain the ability to digitise out-of-commerce works (books or films) and make them available across borders.

2. “Improving copyright rules on research, education and inclusion of
disabled people”

Under this heading the European Commission proposes a new exception for the use of materials in digital form to illustrate teaching, in education facilities and in online courses, which shall also apply across borders.

Moreover, the intention is to make it easier for researchers across the EU to use text and data mining technologies to evaluate larger quantities of data. In addition, a new mandatory exception will enable cultural heritage institutions to preserve works digitally. Finally, the Commission proposes further legislation for the implementation of the so called Marrakesh VIP Treaty, an international copyright agreement which aims to facilitate access to published works for persons who are blind, visually impaired or have other reading difficulties.

3. “A fairer and sustainable marketplace for creators and press”

The European Commission does not content itself merely with proposing for provisions for the improved integration of the Digital Single Market. Rather, rules for a “fairer and more sustainable market for creators, the creative industries and the press” are also presented.

The proposal for a Directive initially foresees the reinforcement of the position of right holders in negotiations with video platforms which publish user generated content and therefore play an active role in the distribution of the content. The most important example in the area of video platforms is YouTube.

Moreover, the proposal of the Commission includes a new ancillary copyright (related right) for press publishers. It will be similar to the existing ancillary copyright at European level afforded to film producers, phonogram producers or broadcasters. This would be designed to ensure that press publishers are better able to monetise their content on the internet. An ancillary copyright of this type for press publishers – in a somewhat limited scope – already exists at a German level, and the political debate surrounding the introduction of the ancillary copyright in Germany would lead one to expect that the development proposals will engender much discussion at an EU level. Therefore, in this respect, the Commission will have to consider the experiences with the ancillary copyright in Germany: in Germany, the ancillary copyright is unable to have an effect as Google, due to its market power on the search engine market in Germany, circumvents it by obtaining, upon request, free licences from press publishers.

Moreover, it is worth mentioning that the draft directive obliges players who exploit copyrighted content to inform authors and performing artists about the profits which they have earned with the author’s works or the performances of the performing artist. In addition, a mechanism will be introduced which will grant authors and performing artists an inalienable right to additional remuneration if the previously agreed remuneration is disproportionately low in light of the success of the work. This is based on, among other things, the German right to additional remuneration in bestsellers cases (Sec. 32a German Copyright Act). This is worth noting, therefore, in particular because it is the first time that European copyright law has included a regulation of general copyright contract law at a European level.

4. Conclusion and Outlook

The draft regulations and directives of the European Commission do not only contain the various rules designed to enable improved access to copyright protected works and performances across national borders within the EU. The European Commission is also taking the opportunity to regulate the markets for copyright protected works and performances. Until now the harmonisation of European copyright law has always been driven forward by the Commission using so-called directives. Directives must be transposed by the member states into national law. The Commission is now also using the instrument of the directive. At the same time, however, access to copyright protected content in particular will soon be regulated in two regulations. Regulations do not have to be transposed into national law but are rather immediately directly applicable in all member states. This shows the direction that the European Commission is taking as far as copyright law is concerned. Copyright law in Europe is moving towards a uniform set of rules in the form of a Regulation. The end result may be unified European copyright legislation and the end of national copyright law in Europe.

eipr: Dr M. Schaefer with contribution “ISP Liability for Blocking Access to Third-Party Infringing Content”.

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BOEHMERT & BOEHMERT partner Dr Martin Schaefer has made a contribution to the English language journal European Intellectual Property Review (10/2016, p. 633-638) entitled “ISP Liability for Blocking Access to Third-Party Infringing Content” . In the article, Dr Schaefer gives an overview of developments and the current state of jurisprudence in relation to the blocking of websites by internet service providers (ISP) on grounds of contents which infringe third-party copyright. In Germany, the “Goldesel” case (Liability for Interference of Access Provider) decided by the Federal Supreme Court on 26 November 2015 is the lead case here. Dr Schaefer comments here: „The Goldesel decision of the German BHG has paved the way to a sensible website blocking possibility in accordance with art.8(3) Info Directive, using the concept of Störerhaftung as a basis.“ Dr Martin Schaefer fought the case at first instance.

musikmarkt 07/2016: Dr M. Schaefer with contribution “The curtain closed and many open questions?”.

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BOEHMERT & BOEHMERT partner Dr. Martin Schaefer has contributed the article “The curtain closed and many open questions?” in the specialist magazine musikmarkt (07/2016). Dr Schaefer provides an overview of the current state and future direction of law following two court judgements which are of greatest relevance for copyright lawyers in the music industry: The court judgements in question are Martin Vogels vs. VG Wort by the Federal Supreme Court and the judgement of the Federal Constitutional Court in “Metall auf Metall”. Dr Schaefer explains both judgements and lists possible consequences. The entire – most recent edition – of the specialist magazine can be accessed here.

musikmarkt 01/2016: Dr M. Schaefer contributes article “Copyright Policy in a Crisis Era”.

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BOEHMERT & BOEHMERT partner Dr. Martin Schaefer has contributed the article “Copyright Policy in a Crisis Era” in the specialist magazine musikmarkt (01/2016). Lots is in motion in the field of copyright, both in terms of legislation and in the case law. Dr Schaefer provides an overview of pending judgements in the fields of remuneration (Reprobel case), copyright contract law, provider liability as well as on copyright initiatives of the EU (“portability”). Dr Schaefer expects large copyright challenges for the coming months, primarily in the field of music. “It remains to be hoped,” Schaefer says, “that the German government and MPs keep an open ear to the arguments of the creative economy as already it is foreseeable that in 2016 the wider public will be more concerned with other issues than those of music authors, artists, music publishers and sound media producers.” The entire article can be downloaded by subscribers at.

“Kommunikation & Recht” (12/2015) with contribution from Dr M. Schaefer on the “Collection Company Bill”.

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BOEHMERT & BOEHMERT partner Dr Martin Schaefer has submitted an article to the specialist magazine “Kommunikation & Recht” (12/2015, S. 761 ff) entitled “The new Collection Company Act – a guide to the bill”. The background is the bill put forward by the Federal Ministry of Justice and Consumer Protection on the implementation of the EU Directive 2014/26/EU on the collective management of copyright and related rights. In his article, Dr Schaefer explains the background to the proposals and makes an initial assessment of the bill. The specialist magazine “Kommunikation & Recht (K&R)” appears monthly and focuses on all national and international legal issues relating to media.

musikmarkt 11/2015: Dr M. Schaefer with article “Reduced Sight in One Eye?”.

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BOEHMERT & BOEHMERT partner Dr.Martin Schaefer has made a contribution to the specialist magazine musikmarkt (11/2015) entitled “Reduced Sight in One Eye?”. In the article, he comments on the new bill on copyright contract law put forward in October. Dr Schaefer shows to what extent the bill excludes the interests of publishing houses and producers and notes here: “If the bill is to become law, it is already clear that it would weaken domestic producers and publishing houses – in favour of largely foreign service and platform operators.” The entire article can be accessed by subscribers at.

Celebratory Publication on Copyright Act with contribution from four BOEHMERT & BOEHMERT partners

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C.H. Beck Verlag has released a celebratory publication marking the 50th anniversary of the German Copyright Act. The “Celebratory Publication 50 Years of the Copyright Act – From the audio tape to social media” is dedicated to the German Copyright Act. The contributions contained in the publication, made by renowned legal experts, look at whether and in how far the framework of the Copyright Act are adequate to meet the challenges of the coming decades. Four BOEHMERT & BOEHMERT partners and solicitors Prof C. Czychowski, Prof A. Nordemann, Prof J. B. Nordemann and Dr M. Schaefer contribute the article “The Copyright Act in normal operation: case low”. The article looks at the jurisprudence surrounding the Copyright Act from its entry into force in 1966 to today. The publication can be obtained from Beck Verlag: Verlag C.H.BECK, 2015 (Hrsg. Th. Dreier und R. Hilty). ISBN 978-3-406-68519-4.

musikmarkt 06/2015: Dr M. Schaefer with contribution “Four misunderstanding on copyright contract law”.

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BOEHMERT & BOEHMERT partner Dr.Martin Schaefer has made a contribution to the specialist magazine musikmarkt (06/2015) entitled “Four misunderstanding on copyright contract law”. In the article, he explains for what reasons the idea of a “copyright minimum wage based on copyright contract law” is, on closer inspection, not suitable as a general solution for the creative economy. Dr Schaefer says here: “The idea of copyright for authors is not that of a suitable wage, but of a suitable participation. Copyright grants the author a participation right in the possible success.” The entire article can be accessed by subscribers here.

New edition: “Manual Commercial Criminal Law” (HWSt) with contributions from BOEHMERT & BOEHMERT partners.

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The respected Handbuch Wirtschaftsstrafrecht (HWSt) (Manual of Commercial Criminal Law) published by Prof Hans Achenbach, Prof Andreas Ransiek and Prof Thomas Rönnau has now been released in a new 4th edition (2015) by C. F. Müller Verlag, Heidelberg. Three BOEHMERT & BOEHMERT partners have authored contributions for the chapters on copyright and industrial property rights. Dr Florian Schwab is responsible for the subject of “Product Piracy”. Further contributions are made by Prof Axel Nordemann (Copyright Criminal Law) and Malte Nentwig (Patent and Utility Patent Criminal Law). The respected manual offers a compact summary of key fields of commercial criminal law including administrative offences and has its focus in the representation of relative practical aspects. Manual of Commercial Criminal Law. Series: Recht in der Praxis. C. F. Müller Verlag, Heidelberg. 2015 978-3-8114-6019-5. The manual can be obtained as hardcover or as e-book from the publisher.

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