WHITE PAPER< EUROPEAN COPYRIGHT REFORM >IMPACT ON FREE AND OPEN SOURCE SOFTWARE AND DEVELOPER COMMUNITIES

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by OpenForum Europe & FSFESEPTEMBER 2017

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European Copyright reform:
Impact on Free and Open Source Software and developer communities/ Foreword‘I do not think that anyone would disagree that creators and right holders should andmust receive a fair and balanced compensation for the exploitation of their works. However, this should be achieved without negative impacts to open source’s contribution to thedigital economy, nor to the internet freedoms of our European developers and consumers.
With deliberations on the Copyright proposal having finally started in the Council andthe European Parliament’s lead Legal Affairs Committee I hope to see that the final outcome of these deliberations strikes the right balance by: safeguarding the existing legal framework and established CJEU case law, adopting a technologically neutral approach andat the same time respecting and upholding end-user fundamental rights and freedoms’.

< MEP Catherine Stihler is Vice Chair of the Committee for Internal Market and Consumer Protection(IMCO). She is the rapporteur for the IMCO Opinion
on the proposal for a directive on copyright in the Digital
Single Market.

<

<4/ Executive Summary
This document highlights an important aspect of the proposed Article 13 of the Copyright
Directive that has so far not been sufficiently considered: namely, its likely impact on Free
and Open Source Software1 and collaborative software development, as well as on developer
communities, which together underpin a software and software based services (SSBS) market
which is worth EUR 229 billion in the EU (2009) and employs a workforce of 3.1 million(2013).
The proposed Copyright Directive has the clear potential to harm Europe’s competitiveness andgrowth in this area. Importantly, it could also restrict important fundamental rights of developers and internet users, without achieving a proportionate benefit. In particular, the proposed
Article 13 could create barriers for the development of source code by imposing liability on
platforms used by developers, harming a sector fundamental for the Digital Single Market.
Therefore, both OFE and the FSFE consider that the proposed Article 13 should be redraftedin order to be consistent with the existing legal framework around intermediary liability, asestablished by the e-Commerce Directive.
This paper reflects on these issues, explaining the matter at stake from a software development
point of view and providing some guidance.

/ Disclaimer
This White Paper has been authored by OpenForum Europe and the Free Software Foundation Europe, and has been peer reviewed by Dr Christina Angelopoulos, Centre forIntellectual Property and Information Law, University of Cambridge.
Views expressed in this paper represent those of the FSFE and OFE, they do not necessarilyreflect those of organisations or individuals that support or are members of the FSFE or OFE.

1. Free and Open Source Software (FOSS) has the potential to develop into a unique strength of the European software sector, if
supported accordingly. Although FOSS is very well suited for applications in the commercial context, many European companies,
public administrations and users do not yet seem to know enough about its advantages. Thus, the authors of the current paper recommend focusing on policy actions that strengthen the FOSS knowledge base and the exchange of related best practices between private
and public organisations.

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European Copyright reform:
Impact on Free and Open Source Software and developer communities

1 / IntroductionT

he Copyright Communication2 3 released by the European Commission in September
2016 explains that the proposed Article 13 is intended to address the challenges posed bysome of the new forms of online content distribution along the value chain, which are
based on user-created content, without presenting solid evidence of the measures imposed by this new article.
The proposed Copyright Directive introduces a set of alternative obligations targeted at‘information society service providers that store and provide access to large amounts ofworks or other subject-matter uploaded by their users.’ Considering the wording of the
proposed provisions, in particular Article 13, these new legislative measures could apply
to software development platforms. This paper explains how, and analyses the negative
impact on business and innovation that this application could have.
The Copyright Directive Proposal, and in particular its Article 13, impacts heavily upon
several fundamental rights, such as freedom of expression, the right to privacy, the freedom to conduct a business, and the presumption of innocence. Moreover, it disrupts thecurrent legal framework, by changing the long-standing rules governing intermediaryliability that were established through Directive 2000/31/EC of the European Parliamentand of the Council of 8 June 2000 on certain legal aspects of information society services,in particular electronic commerce, in the Internal Market (the ‘ECD’).

{

Those kind of laws (the proposal) are destructive to the open source
innovation.
Jean-Baptiste Kempf : President _ Videolan}

What is true at a general level also applies to software development, especially development and European software communities. Free and Open Source Software (‘FOSS’)and open collaboration play a vital role in software development today. Software is often
openly available for developers to view, edit, distribute; in addition, a wide range ofdevelopers contribute to improving this software, using various online services and tools
efficiently to allow open and collaborative software development. Hugely popular examples include services such as GitHub, Gitlab and Stack Overflow; GitHub reports (as ofApril 2017) almost 20 million users, while Stack Overflow is reported (as of April 2014)
to have over four million registered users.
2. “Modernization of the EU Copyright Rules”, https://ec.europa.eu/digital-single-market/en/modernisation-eu-copyright-rules (lastaccessed Sept. 1, 2017)
3. Proposal for a Directive of the European Parliament and of the Council on copyright in the Digital Single Market, COM(2016)
593 final, https://ec.europa.eu/transparency/regdoc/rep/1/2016/EN/1-2016-593-EN-F1-1.PDF (last accessed 25 August 2017)<

<6Under the current proposal, these tools would no longer be able to operate as they dotoday and software developers’ ability to share source code and collaborate in its development would be hampered. In particular, each of the following fundamental rights would
be impacted in the following ways:< Freedom to conduct a business: large businesses, SMEs and individuals relying
on current tools to develop software, especially in FOSS or collaboratively, could be
faced with automated filtering which could engender ‘false positive’ identifications ofinfringing software, which in turn could cause developers’ dependencies randomly todisappear and so literally “break” their builds, resulting in lost business, lost productivity, less reliable software, and less resilient infrastructure.
< Right to privacy: as in other areas, implementing this Directive would require active monitoring of the data and activities of software developers, whether individuals orbusinesses, in order to prevent any future infringement of copyright.
< Freedom of expression and information: the general monitoring obligation imposed by this Directive could well result in more unjustified content removal, reflecting
fear of potential liability for the actions of the users of the platform. Such content
removal could even result in the taking down of whole code repositories, which inturn could disrupt software businesses in the most harmful way.
< Presumption of innocence: a general monitoring obligation, as proposed in thisDirective, does not provide for any meaningful redress mechanisms to challenge theremoval of content requested by a rightholder. As such, this Directive would treat
every user of the platform as a potential copyright infringer by default.
It is noteworthy that on numerous occasions the Court of Justice of the European Union(CJEU) has held that despite the protection of intellectual property being enshrinedin Article 17(2) of the Charter of Fundamental Rights of the European Union, there isnothing in the wording of that provision or in the respective case-law to suggest that rightis inviolable and therefore to be absolutely protected. Therefore, a proper balance needs
to be struck between the protection of copyright and of other affected fundamental rights
and freedoms.4
As currently drafted, the proposal would have negative consequences for software development and European software communities, especially for FOSS, and the use of softwaredevelopment platforms. This is also a concern for Europe’s competitiveness and growth.
A recent study for the European Commission highlights the importance of FOSS for
European growth and competitiveness5. Moreover, the proposal would also fragment
the European Union’s legislative framework around relevant topics, such as intermediaryliability.

4. C-70/10 Scarlet Extended [2011] ECR I-11959
5. European Commission (2017). The Economic and Social Impact of Software and Services on Competitiveness and Innovation.
Available at: https://ec.europa.eu/digital-single-market/en/news/economic-and-social-impact-software-and-services-competitiveness-and-innovation. Last accessed July 27, 2017.

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European Copyright reform:
Impact on Free and Open Source Software and developer communities

Therefore, OFE and the FSFE consider that Article 13 is putting in danger the existing
legal framework around intermediary liability, established by the ECD and confirmed
in numerous instances by the CJEU. Unless its proposed provisions are brought in linewith this existing framework, Article 13 should be entirely deleted, in order to maintainthe legislative coherence of the EU’s approach to intermediary liability, as reflected in the
ECD.
In Section 2, this paper looks at how FOSS collaborative software development platforms
work, showing their relevance in the economy. Section 3 explains how these particular
types of platforms fall under Article 13. Section 4 explains the different ways in which
Article 13 could disrupt the software development ecosystem in Europe, harming theDigital Single Market. Finally, before concluding, Section 5 details the legislative developments in the various EP committees, highlighting the amendments of the Copyright
Directive which are relevant for this paper.

<<82 / What are Free and Open
Source collaborative
software platforms, andwhy do they matter?

F

OSS is software that is often developed by collaborative networks of programmers. For
FOSS, the licensing terms6 encourage modifications and improvements by anyone. Thisimplies allowing individual users to use the licensed software as they please, to study its
source code, to be able to share it, and to customise it according to their needs. While
the software itself may be freely available, there are a myriad of business models based on
FOSS, which enable revenue and job creation. One of the biggest business success stories
here is the Linux kernel: as shown in the Linux Kernel Development Report of 2016,
over 13,500 developers from more than 1,300 companies have contributed to the Linuxkernel since tracking began 11 years ago, including companies such as Intel, Red Hat,
Linaro, Samsung, SUSE, IBM, Renesas, Google, AMD, Texas Instruments and ARM.

The Commission’s proposal targets platforms which store, provide and give access to large
amounts of works and other subject-matter uploaded by their users. One specific type ofsuch platforms is that used for the collaborative development of software using version
control systems (VCS), a fundamental tool that allows fine tracking of the development
history of a software project. In fact, some of these collaborative platforms and version
control systems are used not only by FOSS communities, companies and software developers7, but also by researchers and governments to store and share their software8. As
this indicates, software development platforms are very important, because software cansignificantly increase Europe’s industrial competitiveness and largely contribute to Europe’s growth.
Indeed, the overall software and software-based services market in the EU28 region was
worth EUR 229 billion in 2009, and by 2020 it is expected that this annual figure will
have grown to nearly EUR 290 billion. Software sector employment in the EU grew by
16.1% between 2008 and 2013. This can be contrasted to the decline in employment in

6. FOSS licences, as approved by the Open Source Initiative and the Free Software Foundation. Available at: https://opensource.org/
licenses/category, and https://www.gnu.org/licenses/license-list.html
7. Wired (2015). How GitHub Conquered Google, Microsoft, and Everyone Else. Available at: https://www.wired.com/2015/03/
GitHub-conquered-google-microsoft-everyone-else/. Last accessed April 19, 2017.
8. GitHub (n.d.). GitHub Government. Available at: https://government.GitHub.com/community/. Last accessed April 19, 2017.

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European Copyright reform:
Impact on Free and Open Source Software and developer communities

the total business economy of about 3.4%. Also, software development companies arealso characterised by high productivity (measured in value added per employee). According to the study, the average yearly growth of the software development industry inEurope is expected to be 2.9% between 2015 and 20209.
It has also been estimated that due to the nearly universality of software development
practices, hardly any new software product on the market is built without incorporating
easily accessible and reusable FOSS code10. In addition, the overall contribution of FOSS
to Europe’s economy was estimated to have amounted to EUR 450 billion in 201211. As
such, the importance of FOSS and collaborative open development for modern software
business must not be underestimated. Moreover, FOSS is fundamental not only for software companies per se, but FOSS is also increasingly included in virtually every productand every business, including the devices and production pipelines of media companies
and publishers.

{

Nowadays almost all companies and individuals in Free and Open
Source Software are using version control systems to develop, plan,
coordinate, and document their work. The information in those version control systems embodies precious technical and scientificknowledge and humanity cannot afford the risk of losing it.

}

Roberto Di Cosmo : Founder/CEO _ Software Heritage

There are a myriad of software platforms in existence today. Some of the most popular
or relevant are listed below, together with a short description, in order to highlight the
crucial role which these platforms play in software development.
< Software Heritage. Software Heritage is an initiative started in 2013, and was
registered in France in 2016. Its goal is to collect, preserve, and share software thatis across cultural heritage, industry, education, science, and research communities,
to address the concern that without preservation software that is made up of technical and scientific knowledge will be lost. With source files counting over 3 billion,
commits counting more than 820 million and 64 million projects, Software Heritageis the largest software archive in the world. The importance of promoting universal
access to software source code has been internationally recognised in April this year12,
when UNESCO and the National Institute for Research in Computer Science and9. European Commission (2017). Ibid.
10. Milinkovich, M. (2015) How the Eclipse community works. Keynote presentation @ the 11th International Conference on Open
Source Systems, Florence, Italy.
11. Daffara, C. (2012). Estimating the Economic Contribution of Open Source Software to the European Economy. Available at:
http://www.openforumacademy.org/library/ofa-research/first-conference-proceedingsA4.pdf. Last accessed July 28, 2017.
12. http://en.unesco.org/news/agreement-software-preservation-signed-unesco. Last accessed Sept. 01, 2017.

<

< 10
Automation signed an agreement to contribute to the preservation of the technological and scientific knowledge contained in software.
< GitHub. GitHub provides a set of “social coding” tools built around the Git
version control system, and incorporates social functionality that makes a developer’s
identity and activities visible to other users. The GitHub site makes user identities,
internal project artifacts and related actions publicly visible across a wide community.
On the GitHub site, developers create profiles that can optionally be populated withidentifying information, including an avatar (i.e., an image representing a user throughout the site), their name, email address, organisation/affiliation, location, and webpage. A developer’s profile is visible to other users and displays all the repositories that
person is working on, as well as a list of their latest activities on the site. Currently
GitHub has over 650 employees. As of August 2017, GitHub reports having over 23
million users and hosting 65 million repositories, making it the largest VCS platformin the world.
< GitLab. GitLab is a web-based Git repository manager with wiki and issue tracking
features, using a FOSS licence developed by GitLab Inc. The software was writtenby Dmitriy Zaporozhets and Valery Sizov from Ukraine. As of December 2016, thecompany has 150 team members and more than 1400 FOSS contributors. It is usedby organisations such as IBM, Sony, Jülich Research Center, NASA, Alibaba, Invincea, O’Reilly Media, Leibniz-Rechenzentrum (LRZ), CERN, and SpaceX.
< Stack Overflow. Stack Overflow is a privately held website, the flagship site of the
Stack Exchange Network, created in 2008. It was created to be a more open alternative to earlier question-and-answer sites. The website serves as a platform for users to
ask and answer questions on a wide range of topics in computer programming, including by posting snippets of source code, and, through membership and active participation, to vote questions and answers up or down, and edit questions and answers
in a fashion similar to a wiki or Digg. All user-generated content is licensed under aCreative Commons Attribution-ShareAlike license.
< GNU Savannah. GNU Savannah is a project of the Free Software Foundation
which serves as a collaborative software development management system for FOSS
projects. Savannah currently offers features such as CVS, GNU arch, Subversion, Git,
Mercurial, Bazaar, mailing list, web hosting, file hosting, and bug tracking services.
Unlike SourceForge or GitHub, Savannah’s focus is on hosting only FOSS projects,
and it has very strict hosting policies in place to ensure that only FOSS is hosted. Project submitters have to state which specific FOSS licence the project uses at the time
when they registering a new project.
< SourceForge. SourceForge is a Web-based service that offers software developers acentralised online location to control and manage FOSS projects. It provides a sourcecode repository, bug tracking, mirroring of downloads for load balancing, a wiki for
documentation, developer and user mailing lists, user-support forums, user-written
reviews and ratings, a news bulletin, a micro-blog for publishing project updates, andother features. As early as 1999, SourceForge was one of the first to offer this service

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European Copyright reform:
Impact on Free and Open Source Software and developer communities

free of charge to FOSS projects. In March 2014, the SourceForge repository reported
hosting more than 430,000 projects and more than 3.7 million registered users. The
domain sourceforge.net attracted at least 33 million visitors by August 2009 according to a Compete.com survey.
Many European companies benefit from using these platforms. In France, for example,
the FOSS market was valued at over 4.5 Billion euros in 2016 (PAC consulting), withover 400 companies systematically using collaborative development platforms and version
control systems to develop and offer their products. These range from large generalist
software service companies such as Smile, Alterway or Linagora, to specialised software
editors like Alfresco or Nuxeo, to cite just a few. Founded in 1992 in Germany, SUSE
develops and sells GNU/Linux-based products. With SUSE and openSUSE they haveover 400 public repositories alone on GitHub, and run their own platforms (e.g. https://build.opensuse.org/).

{

Almost all of our development is based on a web-based version
control repository, and such tools play a key role in the processes ofopen source development and collaboration.

}

Richard Brown : Chairman _ openSUSE

However, software development platforms are not only used by companies at first associated with software development. The German e-commerce company Zalando is developing its software infrastructure on those platforms with 49 code repositories with FOSS13.
The car manufacturer BMW for example has 31 code repositories through its subsidiarity
BMW Car IT, focusing on the design and development of software for future BMW
automobiles and motorcycles14.
Other examples of European-based companies using such platforms can be found in themembers’ lists of FOSS business associations such as the French Conseil National du
Logiciel Libre, which represents 400 companies15, the German Open Source Business
Alliance (OSBA), and others, such as ESOP (Portugal), ASOLIF (Spain), COSS (Finland) or OpenUK.
It is important to note not only that these platforms are used to share and develop software, but also that innovative products are being build on top of them. This is, for example, the case for the Spanish company source{d} which is building FOSS components toenable machine learning on source code. This has the potential of changing how softwareis developed, as they are aiming to enable programming that comes from teaching machines to understand and write code.
13. https://GitHub.com/zalando
14. https://GitHub.com/bmwcarit
15. http://www.cnll.fr/cnll/membres/

<

< 12
3 / How are Free and Open
Source collaborative
software platforms targetedby the Copyright reform?

A

rticle 13 of the proposed Copyright Directive targets “information society providers
storing and giving access to large amounts of works and other subject-matter uploaded bytheir users”, which is precisely what software development and other code hosting platforms do:< Works and other subject matter: Source code is any collection of computer
instructions, possibly with comments, written using a human-readable programming
language, usually as ordinary text. The users can also upload image files and audio
files, e.g., icons and sound effects, as well as other assets, used with the computer
program being developed. The source code is often transformed by an assembler orcompiler into binary machine code, understood by the computer16. For almost all
software projects, the source code that programmers develop is fundamental. Source
code, text, image or audio files generally may fall under “copyright protected work orother subject matter”.
At the European level, Directive 2009/24 on the legal protection of computer programs harmonised Member States’ legislation in this field, including by defining
a minimum level of protection and requiring Member States to protect computer
software as such by copyright, applying to them the protection given to literary works
within the meaning of the Berne Convention for the Protection of Literary and Artistic Works. EU Copyright law thus already protects any computer program, both as awhole and as regards its component parts, in the form written by a programmer, i.e.,
its source code, as long as it conveys a particular individual way to express the functionality of a computer program and hence is original.
< Information society services storing and giving access: According to the ECD,
information society services are services “normally provided for remuneration, at a
distance, by electronic means and at the individual request of a recipient of services”17.

16. De Souza, Froelich & Dourish (2005). Seeking the source: software source code as a social and technical artifact. Available at:
http://dl.acm.org/citation.cfm?id=1099239. Last accessed April 19, 2017.
17. Article 2, ECD.

13European Copyright reform:
Impact on Free and Open Source Software and developer communities<

Many of the tools commonly used for software development are information society
services that generally store computer code in whole or in part, and allow users toshare it. Users may also upload literary works or images, audio files, flow charts andother similar materials.
< Large amounts: Collaborative software development by its nature requires large
numbers of individuals to access and edit protected works. The platforms with which
they work store “large amounts” of works, i.e. source code. For example, as of April
2014, Stack Overflow had over 4,000,000 registered users, and in late August 2015 itexceeded 10,000,000 questions. As of August 2017, GitHub reports having over 23
million users and 65 million repositories. Software Heritage, with its more than 2.5
billion files, is the largest source code hosting platform in the world.
Based on this analysis, it seems clear to us that software platforms such as the ones mentioned above would fall within the scope of Article 13 of the proposed Directive.

{

If the new copyright directive in any way hinders innovation for themodernization of the (...) public sector then the directive is defective
and harmful.

Daniel Melin : Senior Procurement Officer ICT _ Swedish National Procurement Services

}

< 14
4 / What happens tosoftware development if the
proposal comes into force?

R

ecital 38 of the proposed Directive states:‘where information society service providers store and provide access to the public to copyright protected works or other subject-matter uploaded by their users, thereby going beyond
the mere provision of physical facilities and performing an act of communication to the
public, they are obliged to conclude licensing agreements with rightholders’.

According to that Recital, this obligation to conclude agreements with rightholders isnegated if the provider is eligible for the hosting safe harbour of Article 14 of the ECD.
Recital 38 suggests that in order to ascertain whether the safe harbour applies or not, it isnecessary to verify whether the service provider plays an active role, ‘including by optimising the presentation of the uploaded works or subject matter or promoting them, irrespective of the nature of the means used therefore’. Moreover, the idea of equating content
optimisation with the platform being active is a very controversial reading of the CJEU’scase law in the area, as existing research shows18.
Article 13 of the proposed Directive, entitled ‘Use of protected content by informationsociety service providers storing and giving access to large amounts of works and othersubject-matter uploaded by their users’, states:‘Information society service providers that store and provide to the public access to large
amounts of works or other subject-matter uploaded by their users shall, in cooperation
with rightholders, take measures to ensure the functioning of agreements concluded withrightholders for the use of their works or other subject-matter or to prevent the availabilityon their services of works or other subject-matter identified by rightholders through thecooperation with the service providers. Those measures, such as the use of effective content
recognition technologies, shall be appropriate and proportionate. The service providers shallprovide rightholders with adequate information on the functioning and the deployment of
the measures, as well as, when relevant, adequate reporting on the recognition and use of
the works and other subject-matter.’

18. Dr Christina Angelopoulos, “On Online Platforms and the Commission’s New Proposal for a Directive on Copyright in the
Digital Single Market”, January 2017, available at: https://juliareda.eu/wp-content/uploads/2017/03/angelopoulos_platforms_copyright_study.pdf (last accessed on 21 August 2017).

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European Copyright reform:
Impact on Free and Open Source Software and developer communities

Applying the criterion of whether they “play an active role” to software development
platforms and how they function, it might be considered that platforms optimise thepresentation of uploaded works. For example: for every project, GitHub provides access
control and several collaboration features, such as bug tracking, feature requests, task
management and wikis. Stack Overflow serves as a platform for users to ask and answer
questions, vote questions and answers up or down, and edit questions and answers in a
fashion similar to a wiki. Users of Stack Overflow can earn reputation points and “badges”, assess the popularity of questions and of users, rank the most discussed topics, andso on – in addition, their questions are tagged, and so are searchable, based on those tags.
All of these features can reflect ways of optimising content on platforms and, as such,might support the conclusion that software development platforms make copyright protected content or other subject matter available to the public.
The notion of an “active role” still remains a vague concept, which is highly dependent
on the context, and impedes legislative provisions - such as those under discussion - frombeing easily applicable and valid over time, regardless of technological developments. It
moreover raises the question of who decides what is “active” and what is not.

{Mozilla’s mission includes the principle that “free and open source
software promotes the development of the internet as a public resource.” Many code hosting sites, some run by volunteers, participate inand enrich this ecosystem. For these sites, existing licensing systems,
including open licensing, are effective. Requiring them all to create
expensive scanning mechanisms and intrusive user monitoring, anddeal with the resulting false positives, would establish a prohibitiveenvironment for the development of open source software. This unintended negative consequence underlines just how broad, disproportionate, and dangerous the proposed Article 13 is for the health andvitality of the creative and open internet, and we continue to strongly
oppose it.

}

Raegan MacDonald : Senior EU Policy Manager _ MozillaIn the particular case of software development platforms, users who were not the initial
creators of the published source code have the technical capability to distribute the code
(or a derivative work based on the code) at a later stage in a manner that is not permitted by the terms and conditions of the specific licence under which the code was madeavailable to them by the original author or right-holder on the platform. By way ofillustration, some of the most widely used FOSS licences are the GNU General Public
Licence (“GPL”) and the Berkeley Software Distribution (“BSD”) type of licence; whilstboth permit redistribution of the licensed code, subject to specific terms and conditions,what may well not be permitted is distribution by the licensee of certain combinationsof the code, when mixed (e.g., users are forbidden from distributing GPL-licensed code

<

< 16
as part of a final product to which they apply only the BSD license). Applying Article
13 to software development platforms would mean making the platforms liable for suchkind of illegitimate distributions of derivative works in violation of the clear provisionsof the applicable licence, without a real possibility for the platforms to audit or check thelegitimacy of such distributions.
If the proposed Article 13 and Recital 38 as they stand were to be applied to these platforms, in practice this would mean that VCS platforms:< could be directly liable for copyright infringement if a user were to include (upload)
any infringing software or other protected material;< could face potential liability for infringement in the event of subsequent redistribution by a platform user of protected material under a licence that was not permitted
by the licensing terms applicable to the code as originally uploaded;< could be obliged to proactively implement filters< could be obliged to demonstrate that they have agreements in place with rightholders, or ex-ante prevent the appearance of content, based on specific information
provided by rightholders.
If Article 13 as proposed is applied, software development platforms will need to undertake and implement permanent compliance assessment. This is usually a specialised activity, typically reserved only to software vendors for software included in their products,
intended to assess the appropriate use of code, and respect for the applicable license terms
and conditions. Such compliance is painstaking and expensive, and it includes extensive
human assessment. Already a specialist consulting industry has grown up around suchcompliance assessment (such as BlackDuck, Nexb, and Triplecheck); moreover, it is not
feasible fully to automate this activity or to apply it to any piece of content uploaded to adeveloper platform, ranging from source code to text, audio, video. In practical terms thiswould be impossible, especially because automated detection mechanisms do not exist forsoftware as they do for audio-visual material. Licence compliance problems exist even for
big companies, let alone the small ones. The impossibility of applying such recognition
measures to software, and the associated legal uncertainty, could undermine the distribution ecosystem.

{

To what extent KDE is directly impacted by the proposed regulation
fully depends on whether the above setup would make us “information society service providers storing and giving access to large
amounts of works and other subject-matter uploaded by their users”.
If yes, then we would probably need to move most of our infrastructure and organization outside of the EU.
Thomas Pfeiffer : Board Member _ KDE}

17European Copyright reform:
Impact on Free and Open Source Software and developer communities

Content recognition is not the core business of software development platforms, nor it
should be. When more time and resources are spent in assessing the legality of the code
uploads instead of actually developing the code, the correct balance between the legal
framework and the business habitat has certainly not been achieved.

<

< 18
5 / How to avoid thefragmentation of Europe’s
intermediary liability
legal system?

C

urrently, intermediary liability is regulated in different pieces of EU legislation, while
the cornerstone of its defences are provided in the ECD. Moreover, there is now extensive CJEU case law which has clarified the application of those safe harbours. With theintroduction of a new copyright proposal as the draft Directive now stands, we face thealarming prospect of two or more conflicting EU frameworks applying to online platforms, without a clear list of criteria to justify which framework is to apply in which cases.

The obligation to “use effective content recognition technologies”, as proposed by Article
13 is incompatible with the prohibition of monitoring obligation, as enshrined in Article
15 of the ECD, and as extensively re-affirmed by the CJEU19. The proposed Recital 38
explicitly states that the obligation to implement “effective technologies” to ensure protection of works or other subject-matter also applies to those service providers which are
eligible for the hosting safe harbour of Article 14 of the ECD. This obligation is not only
contrary to the well-established principle of prohibition of monitoring, but is detrimental
to collaborative software development, by threatening the existence of other code-hosting
repositories that preserve FOSS code as cultural heritage (such as the Software Heritage
initiative20, which solely provides physical facilities for source code, thus generally fallingunder the hosting safe harbour of the ECD).
Assuredly, if conflicting obligations apply to platforms, this will most likely not only disrupt the development of software, but also create important barriers for (or delays in) thecompletion of the European single market and the expansion of digital innovation.
The opinions issued by the parliamentary committees of the European Parliament varyon the topic, and unfortunately do not appropriately address the possible fragmentationof intermediary liability rules.

19. C-70/10, Scarlet v Sabam; C-360/10 Sabam v Netlog.
20. https://www.softwareheritage.org/. Last accessed: July 28, 2017.

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European Copyright reform:
Impact on Free and Open Source Software and developer communities

For example, Amendments 2521, 49 and 52 adopted in July 2017 by ITRE in theirOpinion for the Directive proposal extend the applicability of the proposed Article 13 so
as to cover all hosting providers “where […] storage and [...] provision of access constitutes an essential part of their activities”, by requiring information service providers (i)to acquire licences to all user-generated content hosted on their platforms, regardless ofwhether they have editorial responsibility for that content and (ii) to cover all content generated by their users, including users that are acting for non-commercial purposes. This
proposal goes beyond what is acceptable according to the CJEU, which stresses the needto strike a fair balance between the protection of copyright and the protection of otherfundamental rights and freedoms.
CULT members of the European Parliament have led compromise negotiations. The
Article 13 amendments adopted in their Opinion in July 2017 state (i) that platforms
should conclude licensing agreements with rightholders requesting such agreements, and(ii) that platforms actively optimising content and commercially exploiting it can no longer benefit from the safe harbour of the E-Commerce Directive. Moreover, CULT statesthat in the absence of such agreements, platforms need to put effective technologies inplace to ensure protection of works or other subject-matter.
A more positive approach is followed by IMCO, which adopted its Opinion in June
2017, which states that:“Regarding Article 13 (and corresponding recitals 37, 38 and 39) [...], the current wording is incompatible with the limited liability regime provided for in Directive 2000/31/
EC (Electronic Commerce Directive), a piece of legislation that has proven to be enormously beneficial for the internal market in the digital sphere [...]. The Rapporteur firmly
supports the notion that the value gap has to be addressed and emphasises that creators andrights holders are to receive a fair and balanced compensation for the exploitation of theirworks from online service providers. However, this should be achieved without negative
impacts on the digital economy or internet freedoms of consumers. The current wording of
Article 13 fails to achieve this. [...]”
Amendments 23, 24, 25, 69 adopted by IMCO support the safe harbour provisions of
the ECD, together with the fair balance test with other affected fundamental rights andfreedoms, and the general prohibition of monitoring obligation. In addition, Amendment 72 proposes including an appropriate redress mechanism for users to appeal actions
taken by the information service providers in light of Article 13 either before the courts
or via another competent authority.
Similar direction has also been taken in the Draft Opinion of the LIBE Committee,
which is to be voted upon in September 2017. LIBE supports not diverting from theexisting intermediary liability as enshrined in the ECD when revising the role of platfor-

21. Amendment 25: ‘An information society service provider shall be obliged to acquire licenses for copyright protected content
regardless of whether they have editorial responsibility for that content. The licenses acquired by information society service providers
from rightsholders should be deemed to cover all user generated content by their users, including users that are acting for non- commercial purposes.’

<

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ms in dissemination of copyrighted material. The way in which Amendment 9 rephrases
Article 13.1 supports the coherence of the European legal framework of intermediaryliability:[…] where information society service providers offer users content storage services andprovide the public with access to content and where such activity is not eligible for theliability exemptions provided for in Directive 2000/31/EC [...][emphasis added]“{

These particular types of software development service or ‘platform’
do not belong in the proposed Copyright Directive. However, as aprecautionary necessity, it is important for the European Parliamentand Commission to provide legal clarity and reassurance early on in
the first stage of the co-regulation procedure.

}James Lovegrove : EMEA Public Affairs Director _ Red Hat

Another LIBE amendment which would undoubtedly support the harmonisation of
the EU’s legal framework is the one rephrasing Recital 38.1, by stating that informationsociety service providers which offer users content storage services and provide the publicwith access to content should be obliged to conclude licensing agreements with rightholders, ‘unless they are eligible for the liability exemptions provided in Directive 2000/31/
EC of the European Parliament and of the Council’. This establishes the ECD as thecornerstone of intermediary liability, and does not allow any artificial derogation from its
status.
In the main parliamentary effort on copyright reform (i.e., the Draft Report issued by
the JURI committee), the ex-rapporteur Therese Comodini Cachia had proposed amendments to the Commission’s proposal which relied on the ECD, and could have ensured asuccessful way to avoid legal fragmentation.
Amendments 22, 23, 28 and 56 of the JURI Draft Report avoid the proliferation of rules
concerning intermediary liability treating the ECD and its relevant Articles 14 and 15 as
the foundation for governing the liability of online platforms, with the proposed Copyright Directive in the Digital Single Market only being complementary to the ECD.
Amendments 58, 59 and 60 of that JURI Draft Report recognise the necessary balance
between protecting rightholders’ intellectual property rights, and other concerned fundamental rights and freedoms of users of online services, whilst providing appropriate
means of redress to challenge decisions taken by platforms at the request of rightholders.
In particular, these amendments respect the lawful use of copyrighted material under
exceptions and limitations to copyright by users, and a right to access the judicial system
for the purpose of asserting the right of use under these exceptions.

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European Copyright reform:
Impact on Free and Open Source Software and developer communities

As justified in amendment 809 to the JURI draft report, Internet today is the most crucial source of information available to many users.
“Making online service providers responsible for the uploaded content, including texts,
videos or images to be filtered and monitored is against users’ interests and the rights ofcreators. Monitoring and filtering large volume of materials before it is uploaded on the
web will not only be only financially challenging for small companies, but it will change
the Internet as we know. The eCommerce directive provides for a well balanced practicewith removal of the illegal content following the notification.”
It is especially noteworthy that legislation is not the place to define the particular measures for ensuring agreements concluded between platforms and rightholders for the useof their works, considering the rapidity of technological advancements and to ensurethat the newly proposed Copyright Directive can still be applicable over time, whensuch technological advancements become reality. Considering the fact that the proposed
Copyright Directive is targeted at modernising existing copyright rules for the digital age,
it is especially important to maintain technological neutrality within any such Directive.
Hence, any mention of specific technological measures should be abandoned, in order toestablish future-proof rules for online environment and tot to hamper innovation within
the Digital Single Market. In this sense, Amendment 6123 of the Draft Opinion goes in
the right direction, by replacing any reference to content recognition technologies.
Before the legislative negotiations are concluded, the following points need to be addressed in a successful manner:< the lack of balance between the rightholders’ rights and the aforementioned fundamental rights;< the economic, technological and even legal challenges of content recognition technologies;< the practical impossibility of applying filters to control code being uploaded onto
software platforms; and< the lack of justification for targeting literally all online platforms which store large
amounts of content (including software development platforms), when the allegedly
identified problem does not apply to them.
Unless this is achieved, the proposed Article 13 should be deleted, such as suggested byamendments 798, 799 and 800 in the JURI draft report.

23. “Member States shall facilitate, where appropriate, the cooperation between the information society service providers and rightholders through stakeholder dialogues to define best practices for the implementation of appropriate and proportionate measures,
taking into account, among others, the nature of the services, the availability of the technologies and their effectiveness in light oftechnological developments.”

<

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6 / ConclusionsT

he proposed Copyright Directive attempts to tackle the ‘value gap’ through the introduction of a set of alternative obligations targeted at ‘information society service
providers that store and provide access to large amounts of works or other subject-matter uploaded by their users.’ Applying these key components of Article 13 to software
platforms, this paper concludes that those platforms certainly fall under the scope of theprovisions. Under the current proposal, software platforms would no longer be able tooperate as they do today and software developers’ ability to share source code and collaborate in its development would be hampered. This will create important barriers for(or delays in) the completion of the European single market and the expansion of digital
innovation.

{

Article 13 creates a high level of uncertainty for the software industry
and the free and open source software community, which are driversof economic growth, jobs, education, innovation, and the democratization of technology. The article should be struck entirely, or at least
tailored to exclude software development.

}

Tal Niv : VP Law and Policy _ GitHub
Currently, intermediary liability is regulated through different pieces of EU legislation,
while the ECD provides the cornerstone of its defences. While formally stating that the
ECD will not be opened for review, the Copyright proposal currently under review to alarge extent narrows the scope of the ECD’s application, by modifying the definitions on
which the very ECD is based. Although it is true that those definitions were agreed morethan one decade ago, if there is an identified and evidenced need to update the ECD,
then this should be done in a transparent way, not by ricochet, such as redefining concepts that ECD regulates and declaring that in certain very vaguely defined conditions,
the ECD will not apply.
As shown in this paper, Article 13 as currently proposed shifts the responsibility for protecting allegedly infringed rights from rightholders to platforms. Various EP committees
have adopted their opinions (IMCO, ITRE, CULT) and more will follow (LIBE, JURI).
This paper highlights some of the amendments which support the safe harbour provisionsof the ECD, together with the fair balance test, with other affected fundamental rights
and freedoms, and the general prohibition of monitoring obligation.

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European Copyright reform:
Impact on Free and Open Source Software and developer communities

If such an important economic sector as software development has been missed, there
possibly are others that may be harmed by Article 13. Better understanding about the
impact of Article 13 in the different application cases, and better awareness about where
and how innovation takes place in the current market, are a first step in order to create aproper regulatory framework.
Unless special attention is paid, the current legislative discussions might end with theEuropean Parliament adopting a report which has negative impact on an entire and substantial area of business activity which has very little to do with the Directive’s intended
subject matter.

<

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/ About

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