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A ‘Legal’ Snippet in Germany Could Mean… Seven Words, Maximum

One may wonder whether we are at the beginning of a ‘snippet saga’ in Germany. The Copyright Arbitration Board of the German Patent and Trade Mark Office (DPMA) recently recommended that snippets, i.e. small text excerpts used by search engines and online aggregators below hyperlinks, can comprise exactly seven words. This suggestion is part of the DPMA’s recommendation to privately settle a dispute between online services and press publishers over Germany’s ancillary copyright, also termed the ‘snippet levy’. Should a court confirm this recommendation, snippets which go beyond this limit of seven words would in theory have to be licensed from news publishers.

This rather peculiar recommendation has less to do with Germany’s world-famous inclination to precision, and far more with the exact opposite: the country’s vague provisions in the Leistungsschutzrecht, the ancillary copyright for press publishers. While the law initially tried to put snippets under copyright protection, a last-minute change to the law carved out “individual words and smallest text excerpts” from its scope. Naturally, the views on what constitutes a “smallest text excerpt” diverge widely, which caused most online services, including search engines like Google and Yahoo, to simply not display snippets anymore. In the case of Google, news publishers subsequently argued that Google was abusing a dominant position by not displaying snippets (i.e. by not violating their rights) and forcing them into giving licenses away for free. The German competition authority recently dismissed this claim as no company can be forced to acquire a license for something that is not being used (see here for more details).

Interestingly, the seven-word-recommendation resulted from a dispute between German news publishers, represented by their collecting society VG Media, and various online services over the applicable ‘tariff’ or license fee for the display of snippets. The Copyright Arbitration Board was primarily asked to rule on the appropriateness of a tariff determined by VG Media which amounted to (a very steep) 11% of search engines’ and news aggregators’ turnover in Germany. However, given that only a minority of Germany’s news publishers entrusted VG Media with the enforcement of their ancillary copyrights, the collecting society lowered the tariff to 6.1084% exactly. The Arbitration Board nevertheless found the tariff too high and unreasonable dismissing VG Media’s demands and recommending the parties to settle the case privately. As seen above, this was not the first dispute lost by VG Media in recent months.

A settlement, however, is unlikely because there is essentially nothing left to negotiate. Most online services have long ceased to display snippets in their search results to avoid royalty payments. Google had done so as well until news publishers experienced a decrease in traffic to their sites, which ultimately led them to grant a free license (to Google only). After the Arbitration Board’s decision, Google made it very clear that it will not pay for snippets which it either does not use or which fall under a free license granted by publishers. Should VG Media take the case to civil court, the ensuing legal process could last for years to come. A snippet saga could be born — not only leaving parties with legal uncertainty but also beautifully demonstrating the complete failure of the Leistungsschutzrecht.

Failure is one thing — being illegal under international law obligations quite another. As explained before, the Berne Convention, an international agreement governing copyright, provides for a mandatory quotation right in Article 10. Interestingly, a revision of this provision in 1967 expanded the quotation right significantly. While previously it was only permissible to make “short quotations”, it is now allowed to make “quotations” from articles — the word “short” disappeared from applicable law following the recommendation of copyright experts and the majority of diplomats. At that time even Germany’s delegate strongly recommended to not include the word “short” before the word quotations. While that is a particularly nice coincidence, the matter is not to be taken lightly. Since the Berne Convention is incorporated in the TRIPS agreement, violating Berne amounts to a trade barrier which can be sanctioned by the WTO under its dispute resolution mechanism.

Now imagine a situation in which snippets, a modern form of quotations, are reduced to seven words. From a practical point of view, it is safe to say that they are useless for Internet users who would find it difficult to find the information they are actually looking for. From a legal point of view, most would probably agree that a seven word quotation is rather ‘short’ — and exactly this conflicts with international copyright law which guarantees meaningful (and useful) quotations going beyond ‘short’ quotations.

It seems these concerns were heard by the Austrian Minister for Justice who just recently distanced himself from the ancillary copyright. While the Austrian government initially planned to introduce an ancillary copyright similar to the German version, the Minister admitted that the consultation process yielded widespread rejection of this proposal (you can find CCIA’s contribution here). As a result the future of an ancillary copyright in Austria is more than uncertain. EU policymakers should listen as carefully as their Austrian counterparts.

European Union

DisCo is dedicated to examining technology and policy at a global scale.  Developments in the European Union play a considerable role in shaping both European and global technology markets.  EU regulations related to copyright, competition, privacy, innovation, and trade all affect the international development of technology and tech markets.