How the EU copyright directive affects esports live streams

A recurring series on Esports Insider is ‘Ask the Esports Lawyers’, where a guest post from global law firm Nixon Peabody tackles some of the more pressing – yet untouched – questions that applies to esports.

This time round, Nixon Peabody attorneys Jason Kunze and Jennette Psihoules take a close look at the new EU copyright directive, particularly in comparison to the current controls on content streaming – such as music and games in esports – per the Digital Millennium Copyright Act (DMCA).

My friend told me the new EU Directive is even worse than the DMCA. Is that true?

Good question. The main thrust of the European Union’s Directive on Copyright in the Digital Single Market (the “EU Directive”) changes the process for policing allegedly infringing content. To evaluate whether that is “worse” let’s take a step back to look at the key points of the DMCA and EU Directive.

What are the key points of the DMCA?

Hey, great question, glad you asked… the 1998 Digital Millennium Copyright Act (the “DMCA”) struck a compromise between content owners (e.g., major music labels and movie studios) and internet service providers (e.g., cable companies and other service providers) (“ISPs”). Content owners were aggressively trying to police file sharing (anyone remember The Pirate Bay?), and the ISPs were stuck in the middle as arguably contributing to copyright infringement. To address this issue, the DMCA “Safe Harbor” was created. The Safe Harbor allows ISPs and websites that host user content (e.g., YouTube, Twitch, Facebook) to have immunity from copyright infringement claims if they meet certain conditions.

Twitch Stream
Image credit: Twitch

How does the DMCA Safe Harbor work? 

Basically, the Safe Harbor requires the site to have a DMCA policy and act promptly—by taking down content—in response to DMCA “takedown” notices. Host sites like YouTube need not actively “police” the posted content (which is good, since a massive volume of content is posted each day). Instead, they need only act when notified of potential infringement, and take action against repeat infringers such as cancelling accounts.

So, why not just stick with the DMCA? What’s the downside?

Entire articles could be (and have been) written about the problems with the DMCA. One issue is that the DMCA provides little protection for falsely accused content, even if there’s no valid basis for the infringement claim. (Some will point to the “counter notice” provisions of the DMCA, but they are toothless). Another problem is the repeat infringer issue. Because it’s very easy to setup new accounts and repost material that was subject to a DMCA notice, the content owners compare protecting their rights to the arcade game Whac-A-Mole—as soon as the accused content is removed in one place, it just pops up somewhere else.

OK, great, I understand the DMCA. What about the EU Directive?

The EU Directive rejects the Safe Harbor framework of the DMCA, and puts more responsibility on the ISPs to actively police content. Specifically, the EU Directive requires ISPs or other content-sharing sites to get permission from rights owners (or at least make best efforts to get permission) before sharing content. Spectators and the like have interpreted this to mean that ISPs will have no choice but to institute upload filters and otherwise actively monitor what users are posting to their platforms. One issue is that this may (and some say will likely) result in ISPs removing or even denying to post legitimate content. And, there is no mechanism in the EU Directive for disputing improperly filtered material.

Twitch Stream EU Copyright
Image credit: Twitch

So, why should I care?

Well, if you post content to the internet, this could affect you. Copyright law provides broad rights to content owners, and the Copyright Act (last updated in 1976) certainly didn’t consider the speed and ease of internet distribution. Perhaps the framework is flawed and U.S. copyright law need to be updated. 

But in the meantime, if you are posting third-party content you may be technically infringing (unless you have a license). This certainly applies to video games where the game developer typically holds significant rights and therefore the ability to control who is permitted to share gameplay videos or “publicly perform” the game at esports competitions. As a practical matter, the developers are not likely to complain about free publicity from a Twitch stream of their game, but when the money gets significant, they will – this is why copyright licensing is critical for esports.

So, going back to my original question – is the EU Directive worse than the DMCA?

In a framework where content is automatically policed (because the EU Directive forces websites to be more aggressive about enforcement), it is more likely that content is removed—both infringing content and perhaps “harmless” content that would not have been targeted under the DMCA framework.

This may indeed be worse than the DMCA for end users, whereas content owners may prefer the more stringent policing. Websites and ISPs are going to have to undertake significantly more work to comply with the EU Directive, as they cannot wait for a notice to act. So, ultimately, whether the EU Directive is “worse” may depend on your perspective and role.

This article is meant for informational purposes only, and readers should consult a lawyer with questions.

Jason T. Kunze is an associate in Nixon Peabody’s Chicago office. He focuses on disputes and transactions relating to software and networking technologies. He works with a variety of businesses—from startups to Fortune 500 companies—to aggressively resolve intellectual property (IP) disputes. He has litigated copyright infringement, trade secret misappropriation, patent infringement, trademark infringement, breach of contract and related claims.

Jennette W. Psihoules , an associate in the firm’s Washington D.C. office, counsels clients on all aspects of trademark and copyright law and provides a full range of intellectual property services, including prosecution and protection, enforcement, litigation, licensing and the commercialization of IP assets.