Google Avoids Link Tax But Vague “Ancillary Copyright” Law Sets Up Future Legal Battle

In August of last year, a number of German lawmakers were pressing proposed “ancillary copyright” legislation that would have required Google and others that indexed or aggregated news to pay for links or excerpts from those news items.

The proposed law was championed by German magazine and newspaper publishers who, like their counterparts in the US, are seeing declining readership and ad sales.

The law did pass in the German parliament, but Bloomberg reports that a compromise reached earlier this week stayed in. That compromise will allow Google (and others) “to display ‘single words or very small text excerpts’ referring to publishers’ websites at no cost. For content exceeding these limits, publishers retain the “exclusive right of use,” according to the bill.

However, there also apparently remains ambiguity about exactly how much can be excerpted without a content license (see the postscript below). In the US, the “fair use” doctrine under the First Amendment would prohibit any similar proposal from becoming law.

In France, Google also recently avoided a “link tax” by agreeing to create a €60 million “Digital Publishing Innovation Fund” to “help stimulate innovation and increase revenues for French publishers.”

For a great deal more background, see our previous stories below:

• German Parliament Hears Experts On Proposed Law To Limit Search Engines From Using News Content.
• New German Law Will Allow Free “Snippets” By Search Engines, But Uncertainty Remains

Postscript: The following statement was released earlier today by the European Publishers Council:

EUROPE’S PUBLISHERS WELCOME NEW GERMAN LAW TO FORCE CONTENT AGGREGATORS AND SEARCH ENGINES TO RECOGNISE COPYRIGHT

The European Publishers Council (EPC) welcomes today’s decision by the German Bundestag to approve an ancillary copyright for news publishers in law that means that search engines and other aggregators who commercialise publishers’ content will no longer be able to do so without permission. The “Leistungsschutzrecht,” as it is know in German, will pave the way for commercial negotiations between the parties on the price for the commercial use of publishers’ content.

EPC Chairman and CEO of Impresa in Portugal, Francisco Pinto Balsemão, said: “The EPC welcomes this important vote in the German Bundestag today which recognises clearly in copyright law both the value and the cost of investment in professional journalistic content.”

The new law will only apply to those companies who exploit commercially third party content such as content aggregators and search engines. The proposed provision signifies no change at all to possible uses by other users, or for consumers, bloggers or companies and associations who may use links or cite passages of published content.

News publishers can now demand that search engines and other providers of such services that aggregate their content, refrain from unauthorised forms of usage. These companies will need licences for such usage in the future.

The EPC believes that this law will help establish a market for aggregator content. New innovative business models can now be built based on legally licensed content.

Meanwhile the EPC is actively working on creating the technical infrastructure that will facilitate the communication of online digital rights. Its project, the Linked Content Coalition, has devised a new Rights Reference Model (RRM), due to be published for comment over the next few weeks. The RRM brings together for the first time all the different licensing models and languages for all kinds of content: text, images, video, music, for example. This project seeks to solve the problem and address the criticism that it is often difficult to work out how to use online content legally – for individuals, businesses and for automated tools.

EPC’s Executive Director, Angela Mills Wade said: “With the right legal conditions and the technical tools provided by the Linked Content Coalition, it will be easy to access and use content legally. This will mean that publishers will have the incentive to continue to populate the internet with high-quality, authoritative, diverse content and to support new, innovative business models for online content.”

Commentary from Greg: It’s clear that the publishers are putting their “spin” on the legislation that was passed and that they will push for content licenses for other than “de minimis” usage of newspaper and magazine content by Google and others.

If concrete rules around how much content can be show for free cannot be negotiated between the parties, it’s a safe bet that Google and others will be sued by German publishers under the new law. Then the battle will shift to the courts, which will be forced to interpret the precise scope of the “very small text excerpts” that are exempt from the new law.