FOSS Patents

With VaxGate, Brussels--as a metonym for the EU--is going through its worst credibility crisis ever, while Brexit is already a success story in one particularly important regard: the UK is outvaccinating the Continent. It's also a fact that British elite universities outperform their continental counterparts in global rankings.

Even EU-friendly mainstream media such as German newsweekly Der Spiegel now feel forced to talk about some of what's going wrong. Spiegel author Michael Sauga today criticizes the Merkel-Macron doctrine (to me, they're simply the Axis of Evil, or even the Axis of Death) that COVID vaccines be both developed and manufactured in Europe in order to become more independent from other economic regions. Just yesterday, the European Commission granted provisional approval to Moderna's mRNA-based COVID-19 vaccine, further to a recommendation by the European Medicines Agency. While Moderna's vaccine is already in use in the U.S., the EU clearly treated it as its lowest priority among the top six candidates, simply because it's an American company that didn't have much, if any, European manufacturing capacity at the time.

If I had to choose which of the vaccines to take today, and if I even had the choice, I'd presently--subject to what we'll learn throughout the year--prefer Moderna's vaccine. The only known issue with all those mRNA-based vaccines is that the risk of an anaphylactic shock is about 20-25 times higher than with conventional vaccines. I don't have any known allergies (there a few measurable ones, but so minor I don't even notice anything, such as when I eat hazelnuts), so I'm particularly unlikely to be that one person among 40,000 or 50,000 who would suffer an anaphylaxis. I'd just want to be under observation for 30+ minutes after the jab. What makes me feel better about Moderna's vaccine than Pfizer/BioNTech's is that it may be slightly more advanced. BioNTech hopes to make further progress this year to bring down the cooling requirements. With Moderna already being where BioNTech is trying to get, it's possible that Moderna's product is more mature. Both are 95% effective, though it remains to be seen how well they work against new mutations (for B.1.1.7, a gradual reduction of efficacy is possible, but for the South African mutation, it's not even clear whether the existing vaccines will work at all).

So the EU initially treated as a low priority the COVID-19 vaccine that may actually turn out to be the best of all, and has already turned out to be one of the first two to become available. For industrial policy reasons. One has to be highly unethical or simply deranged to let so many people die for some ill-conceived industrial policy.

When Merkel and Macron were just the Axis of Evil--not yet the Axis of Death--, they already did a horse trade that was unbelievably stupid: Article 13, which then became, after a renumbering, Article 17 of the EU Copyright Directive. It's still high on the EU Commission's priority list. The Merkel government primarily wanted something else: the news snippets tax. That's because German media giants had lobbied for it very hard. For France, however, upload filters were going to be the grand prize. So Merkel and Macron agreed to do both.

There's something I really, really wish to clarify here: I don't disagree that some smart regulatory approaches are needed to certain platforms that have become extremely powerful. In fact, some of what they're discussing in the EU with respect to "gatekeepers" makes a whole lot of sense, and a majority of the House of Representatives raised similar concerns. The question is, however, what will ensure a level playing field and what is just going to be negative on the bottom line, like cutting one's nose to spite one's face.

Upload filters stifle creativity. The right holders who benefit from it are collecting societies, and they are problematic in various ways. Ultimately, just like some overreaching data privacy rules, such a framework may even raise barriers to entry.

Some simple-minded, totally incompetent people came up with the idea at some point that copyright could have a redistributive effect favoring France and Europe as a whole. Of course, the collective European market share of copyrightable works found on Internet platforms used in Europe is far higher than the market share of European platform makers. So if you give copyright holders more leverage over the platforms, it means that far more money will flow in a certain direction than in the opposite one. But those Merkel-supported French idiocies, such as upload filters, are not well-thought-out. From a holistic perspective, they do more harm than good. They just please some lobbyists, and some fools.

It gets slightly more complex, but no less clear, in the automotive standard-essential patent (SEP) licensing context. In that case, there isn't even a clear French beneficiary such as copyright holders or Sanofi (which is going to get a lot of money for a vaccine research project that is otherwise a huge disappointment and failure so far). There actually would be French beneficiaries--car makers like Renault and automotive suppliers like Valeo--from the better policy alternative. But French EU fake news commissioner Thierry Breton is beholden to Nokia and Ericsson, probably just because he has a long history with them due to his own industry background (France Telecom).

Not only Europe's automotive industry but even more so the wider IoT industry would have benefited from allowing the European Commission's Directorate-General for Competition (DG COMP) to investigate Nokia's refusal to grant exhaustive component-level licenses to "all comers" from all tiers of the automotive supply chain.

The concept of "digital sovereignty" (which in this case means having European telecommunications infrastructure providers) could and should be separated from competition enforcement. Give them subsidies, or allow their national governments to do so. But don't let other industries--automotive and, more generally, IoT--suffer, especially when the vast majority of 5G patents aren't even owned by EU-based patent holders.

Ideally, industrial policy shouldn't influence antitrust enforcement. It's a reality that it often does, but if that's what you want to be the case, you at least have to think things through holistically. That doesn't appear to be a strength of people like Macron and Breton, and Merkel just follows them because she lives in an ivory tower and is detached from reality. A few years ago, she referred to the Internet as "Neuland" ("new land" or "unchartered territory"), which tells you all you need to know in this respect.

IP policy is industrial policy, but upload filters are insane. Competition enforcement should be principled, yet is often driven by industrial policy considerations, and whether you look at the merits of those complaints against Nokia or take an industrial policy perspective, the result would be the same: go after Nokia (and, by extension, Ericsson). And when it's about life or death, such as in the SARS-CoV-2 context, industrial policy almost literally kills people.

If the EU takes a smart and holistic approach to its Digital Markets Act/Digital Services Act initiative, and to competition enforcement in the app distribution context, its efforts may actually have a positive impact. But where things stand today, EU industrial policy, especially if devised by French politicians, all too often results in extremely stupid decisions. The EU can rely on many journalists failing to figure it out, or being ideologically biased and therefore unwilling to speak truth to power. In European media you find all those excuses that no one could foresee which vaccine research projects were going to be most successful when one would just have to compare the timeline of the EU's decisions (all of which are public) with the official progress reports of those projects (all of which are public, too, such as on the New York Times Coronavirus Vaccine Tracker). But ignorance, ideology, and spin-doctoring only do so much. Throughout this year, the EU's most miserable failure will become clearer and clearer. The decision makers in Brussels and their advisers will have realized by now that they've failed European citizens. Will they draw the necessary conclusions from it and do better in other areas?

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Yesterday the United States Trade Representative (USTR), Robert Lighthizer, announced, officially at the behest of President Donald Trump, the initiation of a Section 301 investigation (i.e., an analysis of whether a foreign government violates a trade agreement or acts unreasonably or discriminatorily against U.S. commercial interests) of France's digital services tax. The next formal step will be a Federal Register notice. This is what Mr. Lighthizer said:

"The United States is very concerned that the digital services tax which is expected to pass the French Senate tomorrow unfairly targets American companies. [...] The President has directed that we investigate the effects of this legislation and determine whether it is discriminatory or unreasonable and burdens or restricts United States commerce."

The President and the USTR are rightly concerned. France, with its almost plan-based highly-centralized economy and statist approach (= the opposite of Reagan's take that one has to get government out of the way) is an abysmal digital-industry failure, and TIMSS, the leading international math skills analysis, shows that French students are pretty much at a level with Third World countries, which means things are only going to get worse in the "Hexagon." Geographically, France is part of Europe; in educational terms, it's the worst country in the entire EU. By comparison, Singapore takes 25 times as many students (relative to the total number of students) to the top-performing level; Russia, ten times as many; and even the U.S., with its oft-criticized educational systems, seven times the number of France (again, this is a relative measure, so large countries don't have any advantage). While Germany performs 2.5 times as well as France (still far behind not only East Asia but also the U.S. and even a country like Kazakhstan), its politicans are incompetent and/or ideological enough to believe that France is their best partner in innovation policy, instead of trying to stay away from the failed French approach as much as possible.

There are two French computer game makers I think highly of: Ubisoft and (in the segment of "snackable" minigames) Voodoo.io. Other than that, I can't even think of a French technology product that would matter.

The French digital-tax initiative is ill-conceived because they don't want to tackle the real issue. The real issue is simply that the EU as a whole is a fundamentally-flawed supranational structure that does more harm than good. I sometimes recommend a great Wall Street Journal article (which doesn't even mention all of the problems), "Incredible Shrinking Europe."

Just like it was stupid and irresponsible in the first place to put a common currency in place without a common economic policy (as a result, the European Central Bank hasn't increased its interest rates even once in more than a decade, while the U.S. had half a dozen hikes during the same period), it was also incompetent and irresponsible to create a "Single Market" without some minimum tax standard or, in the alternative, an easy way to exclude members taking unfair advantage of this by positioning themselves as a low-tax access point to a market of 500 million consumers. As a conservative I'm all for tax competition, but fair tax competition and not just leeching.

The EU and the large member states of the eurozone are so poorly run that they didn't even seize the historic opportunity they had when Ireland needed a bailout. They could have conditioned the bailout on Ireland agreeing to some minimum tax standard. Obviously, leeches like Luxembourg (Juncker's country) wouldn't have liked this anyway, but Ireland is the #1 problem in this regard.

The Apple "state aid" case is the only crazy thing Mrs. Vestager did during her first term (other than that, I disagree only gradually, not fundamentally, such as with respect to some aspects of the Android case; I'm now looking forward to her second antitrust hammer--the final one for this term--coming down on Qualcomm soon; and on Twitter I repeatedly voiced the view that she was the best potential candidate for the presidency of the European Commission). That Apple-Ireland case has nothing to do with "state aid" and everything to do with "buyer's remorse" in the sense of the EU now seeing the problems that a Single Market without a common fiscal policy (at least a minimum tax standard) creates. Apple is not responsible for the EU's structural issues.

What France is doing with its digital tax is really odd. It's not a sales tax because there is no physical sale occurring in France when Facebook, for instance, displays an advertisement. Nor is it a tax on profits. Instead, France argues that because major digital platform companies are very profitable, foreign entities owe France a percentage of revenues attributable to the French market.

France wanted to make this happen at the EU level, but never got real traction as Germany was reluctant to support this with a view to potential backlash affecting its automotive industry. So France decided to implement something at the national level, and I'm glad the U.S., under its best president in decades, will seriously consider some retaliation in order to dissuade France from this idiocy. Maybe the U.S. International Trade Commission, with its investigative resources, will also be of help in the process. The top-listed candidate of Macron's party in this year's EU Parliament elections made it very clear that they view Google, Amazon, Facebook and Apple as enemies of the state, or collectively as the equivalent of a rival world power, all of which is downright insane.

While I'm not going to do any more copyright reform-related posts on this blog (maybe a new blog further down the road), I would like to just say that Articles 15 and 17 (previously Articles 11 and 13) of the EU Copyright Directive adopted this year are also the equivalent of a digital tax discriminating against U.S. Internet platform makers. France was the driving force behind Article 17 (upload filters), while Germany was more interested in Article 15 (link tax). In fact, France politically blackmailed Germany by threatening to block the Nord Stream 2 pipeline deal with Russia at the EU level if Germany hadn't supported Article 17 of the copyright bill. That is not a conspiracy theory. It was confirmed by reliable sources and reported by Frankfurter Allgemeine Zeitung, and it was obviously no coincidence that both the gas pipeline issue and copyright reform were the only two "A items" on the EU Council's April 15, 2019 agenda (so as to make it clear to Germany, which was having second thoughts, that derailing copyright reform would trigger some energy-related blowback).

The "upload filter" paragraph of the copyright bill is practically a digital tax because it creates a liability regime that is so strict that even the term "strict liability" the way it is reasonably understood in the U.S. would be an understatement. It gives enormous leverage to copyright holders (many of whom are European collecting societies and publishers) against major Internet platform companies in licensing negotiations. There are, as we all know, many very significant U.S. copyright holders (Hollywood, music industry etc.), and they'll benefit from this, too, but the European share of copyrighted works consumed in Europe is hugely greater than the European share of digital platforms used by Europeans. Therefore, this is another means of unreasonably and discriminatorily sucking money out of major U.S. Internet platform companies. It's like the digital tax, but indirect: collecting societies and publishers will initially receive the money, but obviously this will result in incremental tax payments in Europe, including France.

EU member states have some limited flexibility--a modicum of wiggle room--regarding the transposition of Article 17 into their national laws. France is already pressing ahead with the most draconian and unbalanced implementation imaginable, and other European countries may follow, though there's clearly less enthusiasm for this elsewhere.

I will follow the Sec. 301 investigation of the digital tax issue, and I strongly recommend to major Internet platform companies and the industry bodies representing them to raise the EU Copyright Directive, or at least its transposition into French law, in this context. It really is an indirect digital tax. Doing so now might dissuade other EU member states from adopting France's copyright extremism. While that is not what President Trump was elected for, it would happen to have significant benefits for European Internet users, too.

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On Monday of last week (April 15), the EU Council--the decision-making body in which the governments of the 28 EU member states cast their votes--adopted the arguably most controversial piece of EU legislation ever, the Directive on Copyright in the Digital Single Market, commonly referred to as the EU Copyright Directive. To do so about six weeks prior to EU Parliament elections was as arrorgant as it was unwise. While skepticism of the EU was traditionally more of a right-wing concern, the mostly left-leaning and mostly young people who opposed Article 13 (which became Article 17 and is generally known as the "upload filter" paragraph) could not have been more disappointed. They still say and write that they believe in "Europe," mostly because they fail to understand economic and other issues (see this Wall Street Journal article entitled "Incredible Shrinking Europe" on the EU's miserable economic failure), but they've lost a lot of their faith in the EU institutions.

If there had been a similar level of public debate and street protests across the EU as in Germany, Article 17 wouldn't have secured a qualified majority in the Council or a simple majority in the European Parliament. But for a mix of reasons I can't claim to have fully understood yet, concerns about overblocking of legitimate user-generated content were more of a luxury problem of the North than an issue that would also have mobilized people in the economically and technologically weaker South. Smartphone usage isn't lower in the South, but there are some discrepanices such as with respect to digital startup activity. Even France is far behind; Macron's "Startup Nation" is a case of all hat and no cattle, like pretty much everything he does and wants. He's a walking, talking failure, and the more he fails, the more he walks and talks. But he did get the Merkel administration to engage in a horse trade that also involved the Nord Stream 2 gas pipeline.

No political party will pay as dearly for this as the Social Democratic Party of Germany (SPD). In EU elections polls, its support among 18- to 24-year-old first-time voters was cut in half just during the month of March (toward the end of which the European Parliament adopted the proposed directive). What affects the SPD's reputation more than anything else is that YouTubers and other Article 17 opponents rightly accuse the party of hypocrisy: on the one hand, the SPD spoke out against upload filters; on the other hand, it's part of the government coalition that ultimately voted for them in the EU Council, where Germany has several times more voting weight than what would have been required, on top of nine other countries that opposed (also including abstentions, which have the same effect there as voting against).

In a futile attempt--so futile it just serves to underscore the growing disconnect between career politicians and voters in the Internet era--to mitigate the impact on this, the SPD-led Federal Ministry of Justice insisted on attaching a long-winded, legally non-binding declaration to the EU Council decision. That declaration didn't change public sentiment in Germany. For an example, a leading YouTuber, Herr Newstime, said it wasn't worth the paper it's written on. However, the purpose of this post is to take a more analytical approach to that declaration since it will have some political weight and even potentially influence legal interpretations of the new directive going forward.

The EU Council's English translation of the German government's statement is the final part of this updated Council document. Such non-binding declarations can serve multiple purposes:

• to voice dissent;

• to apologize for doing something unpopular, such as by emphasizing one's good intentions in a bad context;

• to make political demands and take positions that are indirectly related to the measure in question;

• to propose certain aspects of national implementations of the directive (EU directives must be transposed into national law by the member states, giving them some--though limited-wiggle room); and

• to influence the future interpretation of the text by courts of law.

The German government did a mix of all of that with its April 15 statement. What's most relevant here is that the German government makes multiple references to the need for copyright holders (without making a distinction there between collecting societes, which due to their market power often fall under antitrust rules, and individual right holders) to be cooperative and reasonable in their royalty demands. Otherwise, platforms would face a very difficult situation given the directive's utterly unreasonable "best efforts" requirement with respect to licensing--a term that reflects the unbalanced nature of what the EU institutions, under the negative influence of French thought leadership, came up with. The many U.S. lawyers reading this blog (a majority of the readership) would almost certainly advise their clients against ever committing to "best efforts" in any contractual provision...

We're now basically going to have to talk about FRAND (fair, reasonable and non-discriminatory) licensing terms in the copyright context. The "ND" part will be officially part of the equation whenever right holders have a dominant market position; in all other cases, it will effectively be considered as part of what terms are fair and reasonable.

These are the various references the German statement makes to fair and reasonable licensing terms and generally cooperative behavior by copyright holders:

• In paragraph 9: "For all other uses platforms should acquire licences, if available relatively easily and for a fair tariff." (emphasis added)

• In paragraph 10: "Workable solutions for obtaining licences must be found. Although requirements which are unreasonable in practice cannot be imposed on platforms, it is necessary to ensure that efforts to obtain licences are combined with fair offers of remuneration." (emphases added)

  The final part ("are combined with...") is an awkward wording for saying that right holders must also do their part and make fair offers, but to the EU Council's translators' credit, this is a context in which it's better to stay close to the original text than to take the libertie necessary to phrase it more elegantly.

• In paragraph 11: "the obligation to conclude contracts on reasonable terms" (emphasis added)

Those are, effectively, references to a FRAND licensing framework. Note that it's not just about royalty amounts but also about the overall terms and conditions, including accessibility ("available relatively easily").

Instead of stressing this now, the German government should have blocked the directive in the Council until a FRAND licensing requirement would have been incorporated into Article 17 (formerly known as Article 13), but at least they're aware of the problem the EU has potentially created and they're trying to address it--better late than never.

Below I'll finally go over the statement paragraph by paragraph and analyze it from a political as well as a legal angle.

1. The German Federal Government agrees with the proposed Directive on copyright and related rights in the Digital Single Market (hereinafter: ‘the Directive’) in the version set out in the trilogue compromise of 13 February 2019, because the reform as a whole achieves urgently needed adjustments to the outdated European legal framework, such as the provisions on text and data mining, out-of-commerce works and contract law for performers.

COMMENT: This is just apologetic. It's another way of saying "we know Article 17 sucks, but everything else is so great and couldn't possibly have been delayed." The reference to provisions on text and data mining is ridiculous, given that the EU directive leaves a lot to be desired in that area, too (which like Article 17 will further weaken Europe in the digital economy, where the EU already is a big-time failure).

2. At the same time, the German Federal Government regrets that it was not possible to agree on a concept for the copyright responsibility of upload platforms that could be broadly supported by all parties. There is widespread consensus that creatives should participate in the exploitation of their content through upload platforms. However, in particular the obligation provided for in Article 17 of the Directive to ensure the permanent ‘stay down’ of protected content and the algorithm-based solutions (‘upload filters’) likely to be used in this context have met with serious reservations and widespread criticism from the German public. The vote in the European Parliament on 26 March 2019 also revealed the huge gulf between supporters and critics.

COMMENT: Here they acknowledge that it's an unpopular measure and seek to make the rest of Europe aware of the fact that this part is going to be problematic. But judges are unlikely to give consideration to public sentiment: their job is to interpret the text as it stands, not to legislate from the bench.

3. The focus of our efforts is on performers, authors and ultimately all creatives who naturally make use of the new tools that digitisation and connectivity provide for creative work. The German Federal Government is of course not questioning the need to protect creative work on the internet, and to ensure creatives receive appropriate remuneration for such work.

COMMENT: That third paragraph is meant to placate the lobbying entities representing artists and performers (though most of the time they actually represent publishers rather than individual creators).

4. Under Article 17(10), the European Commission is required to conduct a dialogue with all interest groups concerned in order to develop guidelines for the application of Article 17. The provision explicitly calls for a balance to be maintained between fundamental rights and the possibility of using protected content on upload platforms within the framework of legal authorisations. The German Federal Government therefore assumes that this dialogue is based on a spirit of guaranteeing appropriate remuneration for creatives, preventing ‘upload filters’ wherever possible, ensuring freedom of expression and safeguarding user rights. The German Federal Government assumes that uniform implementation throughout the Union will be agreed on in this dialogue, because fragmentary implementation with 27 national variants would not be compatible with the principles of a European Digital Single Market. On the basis of this declaration, the German Federal Government will participate in this dialogue.

COMMENT: The only positive aspect of that fourth paragraph is that the German government promises to go into the further EU process (working with the Commission to develop implementation guidelines) on the basis of its April 15 declaration. And by expressing concern over divergent national implementations they acknowledge that Article 17 is too vague (although it is, if one includes the relevant recitals, almost as long as the original version of the U.S. Constitution...). Other than that, that paragraph adds nothing new, nor does it influence future interpretation.

5. Where technical solutions are used at all in that connection, the data protection requirements of the General Data Protection Regulation must be adhered to and the EU should encourage the development of open-source technologies with open interfaces (APIs). Open-source software guarantees transparency, while open interfaces ensure interoperability andstandardisation. This can prevent market-dominant platforms from further consolidating their market power by means of their established filtering technology. At the same time, the EU must develop concepts that counteract a de facto copyright register in the hands of dominant platforms by means of public, transparent notification procedures.

COMMENT: The fifth paragraph was obviously inspired by a prior statement by Germany's Federal Commissioner for Data Protection and Freedom of Information, Ulrich Kelber. However, it's hard to see how this part of the government's statement would have any real-world impact. They can "encourage" platforms to use open-source software, but they won't be able to impose such a requirement--and Internet companies generally make their own technology choices (which quite often are open-source solutions) regardless of what some European governments "encourage" them to select. It's a pointless paragraph.

6. First of all, the requirements laid down in Article 2(6) of the Directive must be addressed and clarified, since the rules are aimed solely at those market-dominant platforms which make large quantities of copyright-protected uploads accessible and which base their commercial business model on such a practice, i.e. services such as YouTube or Facebook. At the same time, we will make it clear that services such as Wikipedia, university repositories, blogs and forums, software platforms such as Github, special-interest offers without any connection to the creative industry, messenger services such as WhatsApp, sales portals or cloud services are not platforms within the meaning of Article 17. In addition, we will ensure an exemption for start-ups.

COMMENT: That paragraph is the most nonsensical one in the whole statement. I wonder how anyone can write something so obviously stupid with a straight face. Exceptions like Wikipedia and Github are already in the directive, and the "exemption for start-ups" mentioned at the end of that sixth paragraph exists as well, but is far too narrow a carve-out to be useful.

7. Furthermore, it is clear that upload platforms should continue to be available as free, uncensored communication channels for civil society in the future. Article 17 (7) and (8) stipulate in that connection that protective measures for upload platforms must not impede the permitted use of protected content. We are particularly committed to this because upload platforms are also a springboard for creatives, enabling them to reach a worldwide audience without a publisher or a label.

COMMENT: This merely states a motivation for ensuring that overblocking of legitimate user-generated content should be prevented, without proposing any particular solution. Roughly as stupid and pointless as the previous paragraph.

8. The aim must be to make the ‘uploadfilter’ instrument largely superfluous. Each permanent ‘stay down’ mechanism (‘uploadfilter’) must comply with the principle of proportionality. Procedural guarantees, in particular, could be considered, for example when users notify that they are lawfully uploading content from third parties. In these cases the deletion could not be performed automatically, but only after a check by a person. At the same time, the proprietorship of any content that has to be removed should be sufficiently proven, unless the information comes from a ‘trusted flagger’. In all events the platforms must guarantee easy access to a complaint mechanism for solving contentious cases effectively and as rapidly as possible.

COMMENT: The idea of users being allowed to indicate that they are convinced of their content being lawful is not bad. However, the practical issue is going to be that platforms are rarely sued by users who wish to publish content (it does happen, particularly in Germany, but rarely) and face much more of a threat from right holders. The eighth paragraph makes a valid point, but a workable situation is not in sight.

9. In addition, the use of protected content on upload platforms for criticism or reviews, for caricatures, parodies or pastiches, or even in the context of the ‘quotation barrier’, is permitted and free of charge. In such cases the rightholder does not suffer any economic loss anyway. For all other uses platforms should acquire licences, if available relatively easily and for a fair tariff. We will examine how the fair participation of creatives in this licence revenue can be guaranteed through direct payment claims, including in those cases where the label, publisher or producer have the exclusive rights. It is also necessary to guarantee an appropriate remuneration for any new content created on upload platforms and used for commercial purposes. Above all, the proceeds from uses on upload platforms that are desired for political reasons must also reach the creatives themselves.

COMMENT: This is the first one of the three paragraphs that make reference to FRAND licensing terms. Most of the emphasis here is on how to ensure that payments reach individual creators as opposed to just their publishers. However, the EU Copyright Directive generally weakens creators vis-à-vis publishers. Also, it won't be easy to avoid double recovery in this context.

10. Article 17 aims to monetise the use of protected content on upload platforms and to ensure appropriate and fair remuneration for authors and performers. The German Federal Government shares this goal. In the European compromise, licensing is the method chosen to achieve this. Article 17(4) provides that, in order to fulfil their responsibilities, upload platforms must have ‘made best efforts’ to obtain licences. This will be crucial in the implementation of this provision. Workable solutions for obtaining licences must be found. Although requirements which are unreasonable in practice cannot be imposed on platforms, it is necessary to ensure that efforts to obtain licences are combined with fair offers of remuneration.

COMMENT: The tenth paragraph is the very best, most useful and most meaningful paragraph; maybe it would have been better if the German government had just made a short and focused statement consisting mostly of this one instead of hiding such a gem in a longwinded, mostly meaningless statement.

11. In order to resolve this issue – of how licences can, as far as possible, be concluded for all content on upload platforms – copyright law provides for many other mechanisms besides ‘traditional’ individual licensing (e.g. exceptions and limitations, possibly combined with remuneration rights; the option of converting exclusive rights into remuneration rights; the obligation to conclude contracts on reasonable terms; and the involvement of associations of creative artists such as collecting societies).

COMMMENT: The open-ended nature of this 11th paragraph shows that the German government either hasn't fully analyzed the feasibility of different approaches or hasn't been able to reach an internal agreement on which way to go. The reference to "exceptions and limitations" is consistent with a position paper put forward by the digital policy experts of the Christian Democratic Union (Merkel's party). However, the SPD appeared to be unconvinced of its compatibility with EU law, which is understandable since EU law provides for only a limited set of limitations to and exceptions from copyright law.

12. The Federal Government will examine all of these models. Should it appear that the implementation has led to a restriction of freedom of expression or should the guidelines set out above encounter obstacles in EU law, the Federal Government will work to ensure that the shortcomings identified in EU copyright law are corrected.

COMMENT: This vague promise of amending the directive reflects a significant degree of uncertainty as to what the ultimate impact will be. However, the EU is not particularly good at admitting mistakes. Typically, it just blames citizens. Nevertheless, the EU Copyright Directive could be an exception where a legislative initiative to amend the bill may be taken relatively soon. There are politicians who have spoken out in favor, including the Free Democratic Party's top-listed candidate Nicola Beer--and the FDP is reasonably likely to be part of a post-Merkel government. Also, Manfred Weber, a politician from the CDU' sister party (the Christian Social Union) and the European People Party's candidate for the presidency of the EU Commission, also stated in a recent TV interview that he, in his potential capacity as Commission president, would push for a legislative amendment should "censorship" occur as a result of Article 17.

All in all, the German government's statement isn't too bad. There's a lot of nonsense in it that just distracts from the more interesting and relevant parts. But I do like the references to fair and reasonable licensing terms and easy access to such licenses, as well as the commitment to look for ways to obviate upload filters to the greatest extent possible--and while I'm not too hopeful about that, I do appreciate the fact that the statement leaves the door open to a near-term amendment.

I do not plan to comment on the further process (transposition into national laws and subsequent litigation) on this blog. Since February I've blogged about the EU copyright reform process on various occasions because it was the most interesting and important legislative process concerning intellectual property in many years, but the focus of FOSS Patents will remain on patents and antitrust, and copyright only to the extent it is asserted against mobile device makers or app developers. I may, however, set up a separate copyright blog at some point.

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Long gone are the days when intellectual property policy was shaped by a few experts in backroom meetings--experts who spoke the same language, wore the same kinds of clothes, and had largely congruent ideas for the future. That has changed. The EU software patent debate, from which my allies and I emerged victorious, was a first in political history: all of a sudden, there was public debate and an absolutely unprecedented level of voter engagement. (That was already the case before I joined the fray; I just brought a commercial perspective and incremental tactical flexibility to the table.)

The Anti-Counterfeiting Trade Agreement (ACTA) was the next example (I wasn't involved), and the most recent--and still ongoing--one is the EU Copyright reform process (I only helped out in some limited areas toward the very end of the multi-year process).

The recent vote that went awry in the European Parliament (a dozen MEPs later declared in writing they had pressed the wrong button) was described by the proponents of Internet upload filters and similar anti-innovative measures as the de facto closure of the process. But the fire is still raging, and the opera isn't over until the fat lady sings: the EU Council has yet to make its formal decision. A mere formality, say the proponents. But that formality is costing the German government coalition parties dearly, and while Merkel's Christian Democratic Union/Christian Social Union (CDU/CSU) used to bear the brunt of people's well-founded outrage, the junior coalition partner, the Social Democratic Party (SPD), is now in serious trouble as the SPD totally fell out of favor with young German voters yesterday evening.

#NieMehrSPD, a vow never to vote for the SPD again in one's lifetime, became the #2 trending hashtag on Twitter's German-language service yesterday, second only to the wildly popular Germany's Next Top Model casting show.

The SPD is going to get little voter support in next month's EU elections, and is going to have catastrophic results in some regional elections later this year. It could be that pollsters (though they rarely think outside their traditional boxes, which is a large part of the reason why they get things wrong by huge margins all the time) will attribute the SPD's lack of popularity with young voters at least in part to the #Article13 (now #Article17) debate. More likely, they'll remain clueless. But the effects of the SPD's strategic error will last for a long time, regardless of whether the pollsters will ever find out.

What happened yesterday is that the SPD, even though its European Parliament delegation (not its sister parties in other countries, though) overwhelmingly voted against upload filters, sided with its coalition partner, Merkel's CDU/CSU, in yesterday's debate in the Bundestag (Federal Parliament) over two motions for non-legislative resolutions calling on the German government to oppose the bill in the EU Council. With Italy, Poland, the Netherlands, Finland and Luxembourg already opposing the bill, it would just take a German No to reopen the debate and start a quest for a better mouse trap. I translated the libertarian Free Democratic Party's (FDP) motion, which was masterfully written by their digital economy expert Jimmy Schulz, and I can assure you that the Left Party's motion, which I saw only yesterday, was at the same level and, unlike what some might suspect, absolutely not ideological. Either motion made clear that creatives should receive proper protection on the Internet, but that this particular bill would put Europe's Internet and IP policy on the wrong track.

The SPD used to blame everything on Merkel and her party. There was a deal with France that involved the Nord Stream 2 gas pipeline that resulted in Germany's consent to upload filters despite a clear wording in the CDU/CSU's written coalition agreement with the SPD; and the CDU's Axel Voss MEP rose to negative fame as the European Parliament's rapporteur in charge of the directive, while the SPD, not unanimously but overwhelmingly, voted against the bill in the European Parliament's March 26 plenary vote. Also, the SPD's Tiemo Woelken ("Wölken" in German) MEP was really fighting harder for our cause than anybody else save the Pirate Party's Julia Reda MEP.

But the European Parliament vote didn't solve the problem, while the German government could still remedy the situation in the EU Council (the actually more powerful EU legislative body, which is controlled by the Member States' national governments). The EU Council wouldn't have a qualified majority for the bill without the German government, and the German government wouldn't have a majority in its national parliamentary democracy without the SPD. Plain and simple. Furthermore, the SPD's Katarina Barley is the Federal Minister of Justice, and IP policy falls within the remit of her ministry (other ministries have a secondary role at best in this context). She's also the SPD's top-listed EP candidate (after the EU elections, she'll step down in Berlin and make the leap to Brussels and Strasbourg). One of her predecessors in office, the FDP's Sabine Leutheusser-Schnarrenberger, once resigned because she couldn't possibly support a legislative measure (relating to eavesdropping). Mrs. Barley, however, is anout to down in history as someone who mistakenly thought she could have her cake and eat it, and wherever she will go and whatever she may do in the future, the Internet generation's thumbs-down for her will be a given--unless she recognizes the situation and fixes the problem.

Should Sweden indeed change it state from Yes to No in about a week, the situation in Germany will heat up again for sure.

The motions that the German parliament debated yesterday evening represented--as the Left Party's Petra Sitte said in her opening statement--an opportunity for the SPD to alter course while it still can. The SPD could have supported those parliamentary motions in order to provide a democratic justification for an admittedly unusual about-face by Germany at the EU level. The motions would have paved the way for a search for a better approach than the ill-conceived bill that is on the table and scheduled to be adopted on April 15. Of course, a government coalition party voting in favor of a motion by the opposition would consitute sort of a government crisis--but it could have been contained because the rest of the EU wants Merkel to stay in office as long as possible, so even Macron would have rather given up on Article 13 (now Article 17) for the time being than push Merkel down the political cliff over copyright.

What the SPD decided--and what triggered the shitstorm that made #NieMehrSPD the number two trending hashtag in Germany at prime time--was, however, to cave. In a transparent procedural maneuver, they SPD joined the CDU/CSU--in the debate and in the vote--in effectively voting both motions down by referring them to the parliamentary committees, where the process will take far too long for the actual plenary vote (on substance) to be held before the EU Council will (normally, though nothing is necessarily normal anymore) have adopted the bill.

As per a suggestion by a former Pirate Party MEP from Sweden, Amelia Andersdotter, I live-tweeted the most important soundbites from the debate and shared my observations in English. At times the livestream slowed down due to the heavy load. Germany's leading YouTubers were all following it, and one of them, Herr Newstime, had already announced a few days ago that he left the SPD after having been a member for well over ten years.

The SPD's doublespeak has failed. They--and particularly Mrs. Barley--apparently thought they'd get away with schizophrenia, saying No in the European Parliament but Yes in the EU Council (instead of holding the CDU/CSU to the coalition agreement). The EU Council has little visibility, though in this particular context, a large number of mostly young people learned Council lingo like "COREPER" and the final adoption of the copyright bill will definitely get an unprecedented level of attention for that kind of procedural step (while I don't expect next weekend's demonstrations to be nearly as large as the one at which I spoke on March 23). But the German Bundestag has great visibility, thus the #2 trending hashtag.

Before anyone claims that this was a fake campaign or a mob of bots or whatever, let me launch a pre-emptive strike against any such conspiracy theory.

Axel Voss, the controversial German conservative Member of the European Parliament best known for his push for Internet upload filters, alleged Google's strategy to influence legislation in this context was "government by shitstorm," when in reality he has no one but himself and the people in charge of his party delegation's Twitter account to blame. Google, Facebook or any other Internet company played no role in the shitstorms he referred to: in fact, those shitstorms started within seconds of some stupid and/or offensive utterances, and anybody who's ever had a real job and dealt with companies of any size knows that even a startup couldn't orchestrate an instant shitstorm, much less a large and bureaucratic organization.

Google is the new Russia in this regard.

Mr. Voss's Christian Democratic Union (CDU) has already gone through plenty of shitstorms in connection with Internet policy, including that a few years ago Merkel referred to the Internet as "Neuland" ("new (unchartered) territory"). There actually is an entity named #CNETZ that is affiliated with the CDU and its sister party, the Christian Social Union (CSU), and their understanding of what makes the Internet--and the Internet economy and community--tick is so much better than that of the CDU/CSU's MEPs that the difference can't ben even be quantified by means of a factor. But ultimately, the CDU/CSU makes decisions that have consequences, while #CNETZ merely advances recommendations, and voters who care about Internet policy focus on the bottom line: on what ultimately comes out of a political process. That said, #CNETZ is an entity with which I believe we should engage in constructive discussions going forward.

Despite #CNETZ, the CDU/CSU is simply not an option for the Internet community in the foreseeable future. Damages control is all that it can achieve, and even that one is going to be hard.

The SPD, however, has Tiemo Woelken MEP--a lionheart in the European Parliament and a sheep at home. He's young, he's a career politician, and he owes his seat in the EP to a self-contradictory party with a backwards-oriented leadership that believes a hashtag is a regional dish or music style.

Mr. Woelken is displaying his disappointment, and I can see why he's brokenhearted, but what I've instead encouraged him (via Twitter) to do is to use the trending hashtag as ammunition in the internal fight. He didn't publicly call on his colleagues back at home to vote for those motions; maybe he did so privately (I'm sure that if he had any communication in recent days with anybody in Berlin, he will have done so), but that's not enough. He's not enough of a maverick who would openly oppose the party line. And that's why I think it would be morally, but not strategically, appropriate to feel much sympathy for his misery. Life's unfair--after the accidental EP vote and the SPD's acquiescence to the CDU/CSU's breach of the German government coalition agreement, our anti-upload-filter movement really knows.

It's unlikely, but nothing is 100% impossible in politics if it's legally possible (and even illegal things sometimes happen, but that's another story and not an issue in the copyright reform context), that the SPD will recognize its error. In the age of social media, you can't fool people. They don't buy your crap. They'll be informed, and while the CSU's Alexander Hoffmann demonstrated incredible talent yesterday by defending the indefensible and generously accepting three questions from the parliamentary opposition, all speakers opposing upload filters did a great job, each of them in their own way: I mentioned Petra Sitte (Left Party) before; for the FDP, Roman Mueller-Boehm ("Müller-Böhm" in German); for the Alternative for Germany (AfD), Joana Cotar; and for the Greens, Tabea Roessner ("Rößner" in German). Those four parties cover a broad spectrum, but none of them tried to gain any ideological mileage from the copyright debate: each and every one of them did exactly what our own activists would have said in that same situation. The government coalition parties had little more to say than to ridicule the opposition's concern for the CDU's compliance with the coalition agreement--but that's unrelated to substance, and if any party is now going to be viewed by countless (mostly young) voters and future voters as hypocritical, it's the SPD. Absent a miracle, that is.

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Yesterday the Free Democratic Party (FDP) group in the German Bundestag (federal parliament) made the decision to bring a motion calling on the German government to prevent the adoption of the EU copyright reform bill in its current form by the EU Council. The government coalition parties (CDU/CSU and SPD) have already decided to refer a similar motion by the Left Party to the committees in an apparent attempt to stall the process in the federal parliament while the government would allow the bill to be adopted by the Council in the meantime. That shows just how uncomfortable they are. They don't want to come clean and take a position. With respect to the FDP motion, however, the decision on whether or not to hold an immediate vote will be made tomorrow, Thursday (April 4), right after the debate.

Here's my unofficial translation of the FDP motion:

--- BEGINNING OF UNOFFICIAL TRANSLATION ---

German Federal Parliament
19th legislative term

Motion

by the Members of Parliament Jimmy Schulz, Stephan Thomae, Grigorios Aggelidis, Renata Alt, Jens Beeck, Nicola Beer, Dr. Jens Brandenburg (Rhein-Neckar), Mario Bran-denburg, Dr. Marco Buschmann, Britta Katharina Dassler, Dr. Marcus Faber, Daniel Föst, Katrin Helling-Plahr, Markus Herbrand, Torsten Herbst, Katja Hessel, Manuel Höferlin, Dr. Christoph Hoffmann, Reinhard Houben, Ulla Ihnen, Olaf in der Beek, Gyde Jensen, Dr. Christian Jung, Thomas L. Kemmerich, Dr. Marcel Klinge, Da-niela Kluckert, Pascal Kober, Dr. Lukas Köhler, Carina Konrad, Konstantin Kuhle, Ulrich Lechte, Till Mansmann, Dr. Jürgen Martens, Alexander Müller, Roman Mül-ler-Böhm, Frank Müller-Rosentritt, Hagen Reinhold, Bernd Reuther, Matthias See-stern-Pauly, Judith Skudelny, Bettina Stark-Watzinger, Dr. Marie-Agnes Strack-Zimmermann, Benjamin Strasser, Katja Suding, Manfred Todtenhausen, Dr. Andrew Ullmann, Gerald Ullrich, Johannes Vogel (Olpe), Sandra Weeser, Nicole Westig, Katharina Willkomm, and the parliamentary group of the FDP

relating to the proposed Directive of the European Parliament and the Council on Copyright in the Digital Single (Market COM (2016) 593 final; Council doc. 12254/16 and Council doc. 6382/19)

here:
Resolution by the German Federal Parliament pursuant to Art. 23 para. 3 of the Basic Law in conjunction with Article 8 of the Law on Cooperation Between the Federal Government and the Federal Parliament in Matters Concerning the European Union

Rethink copyright -- without upload filters

May the Federal Parliament decide as follows:

I. The German Federal Parliament takes note:

1. On February 9, 2019, the Federal Government consented to the result of the trilogue on copyright reform (proposed Directive of the European Parliament and the Council on Copyright in the Digital Single Market. Two of its provisions are particularly controversial: the introduction of a European press publisher's right (Article 11 at the draft stage; now Article 15) and the provisions on the use of copyrighted content by online platforms (Article 13 at the draft stage; now Article 17); said provision effectively requires platforms to implement so-called upload filters.

2. Since the Council vote that was held on February 9, 2019, both government coalition parties have distanced themselves from the outcome of the trilogue with respect to at least Article 13 (now Article 17):

a. Nothwithstanding her consent, on the Federal Government's behalf, to the Council decision, Federal Minister of Justice [Katarina] Barley described the provision as a "wrong path" and recommended to the European Parliament the adoption of the reform bill without this controversial element (https://www.zdf.de/nachrichten/heute/uploadfilter-falscher-weg-barley-bedauert-ja-zu-reform-100.html). Furthermore, the SPD's [Social Democratic Party of Germany] March 23, 2019 convention voiced opposition to the [legislative] proposal and to the introduction of upload filters (https://www.spd.de/fileadmin/Dokumente/Parteikonvent_2019/Beschluss_Ja_zu_einem_starken_Urheberrecht_Nein_zu_Uploadfiltern.pdf).

b. The CDU [Christian Democratic Union of Germany] took a position against upload filters on March 16, 2019 and would now prefer to obviate them as well. To that effect, the CDU proposes a transposition of the reform measure into national law that would steer clear of the mandatory introduction of upload filters and proposes alternative compensation models (such as, for instance, bulk licenses) in their stead (https://twitter.com/NadineSchoen/status/1106662762091085824/photo/1?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1106662762091085824&ref_url=https%3A%2F%2Fblog.wdr.de%2Fdigitalistan%2Fschroedingers-uploadfilter-der-unglaubwuerdige-kompromiss-der-cdu%2F). It is, however, doubtful whether the copyright directive provides sufficient wiggle room for a solution along those lines. The EU Commission has already warned Germany against a "separate path" (statement by EU commissioner Guenther Oettinger, https://www.heise.de/newsticker/meldung/EU-Copyright-Oettinger-warnt-vor-deutschem-Sonderweg-ohne-Upload-Filter-4356086.html). Even in the event EU law allows such a national solution, such implementation constitutes a suboptimal solution at best, given that divergent regulatory approaches run counter to the objective of a digital single market and pose major challenges to platform operators.

3. Having said that, there is at this juncture a consensus between the parties in the German Federal Parliament that upload filters are the wrong tool to appropriately compensate right holders, creatives and licensors of copyrighted works in the Internet economy. If the government coalition parties' parliamentary groups had already reached this conclusion on February 9, 2019, and in accordance with their coalition agreement, the German Federal Government could not have consented to the reform package.

4. In the second week of April, the EU Council will hold its final vote on the reform bill. A [qualified] majority for the proposal requires the Federal Government's consent. Therefore, the Federal Government is in a position to stop the reform in its current form and to seize the opportunity to initiate the discussion of a copyright law that strikes a fair balance between the interests of creatives, users, right holders, licensors and platforms, even under the parameters of today's Internet economy, without unreasonably restricting the freedom of information and speech and the general freedom of the Internet. Such proposals are already on the table.

5. The Federal Government must take the necessary action and vote against the reform of the EU Copyright Directive in the final vote in the EU Council. The German Federal Parliament is conscious of the fact that Member States very rarely change their voting stance at this stage of legislative proceeding. However, the EU copyright reform bill is a legislative measure of extraordinary relevance to the future of the information society, as evidenced by the Europe-wide public debate over this bill (for instance, a petition signed by more than 5 million citizens https://www.change.org/p/stoppt-die-zensurmaschine-rettet-das-internet-uploadfilter-artikel13-saveyourinternet) and demonstrations in many European cities with more than 170,000 participants (https://netzpolitik.org/2019/demos-gegen-uploadfilter-alle-zahlen-alle-staedte/)).

II. Now, therefore, the German Federal Parliament calls on the Federal Government

1. to oppose, in the EU Council, the proposed Directive of the European Parliament and the Council on Copyright in the Digital Single Market; and

2. to vigorously espouse an EU-level reform of copyright law that strikes a fair balance between the interests of creatives, users, right holders, licensors, and platforms, even under the novel parameters of today's Internet economy, without unreasonably restricting, such as by means of upload filters, the freedom of information and speech and the general freedom of the Internet.

Berlin, this second day of April 2019

Christian Lindner [group and party chairman] and the parliamentary group [of the FDP]

---END OF UNOFFICIAL TRANSLATION ---

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The infamous democratic deficit of the European Union is not just an issue relating to the EU institutions and their interinstitutional dealings, such as "trilogues" and similar negotiations. In democratic terms, the EU is a banana republic where votes are repeated until the result pleases the elites or decisions come into being by accident, such as the decision not to allow the European Parliament to vote on individual amendments to the copyright bill. But there's just as big a problem with the way the governments of most EU Member States sideline their national parliaments. In Sweden, the parliament's EU affairs committee tells its government how to vote in the EU Council (and there's a decent chance that Sweden will have to change its vote on the EU copyright reform bill from Yes to No soon, but the parliamentary decision isn't strictly binding).

What's happening in the same context--the EU Copyright Directive--in Germany is, however, another case of a government's contempt for the directly elected representatives of the people.

As per the current plan, the EU Council will try to adopt the copyright bill on April 15 at a Luxembourg meeting of the ministers for agriculture and fisheries. It wouldn't be a problem to adopt an uncontroversial bill without debate, and in that case it doesn't even matter what the ministers and state secretaries attending the meeting are primarily in charge of. But in the case of the proposed Directive on Copyright in the Digital Single Market (which will be less digital as a result), it's just an attempt to avoid public scrutiny by minimizing attention and making it impossible to have any substantive debate (which would require a different type of minister to attend).

On Friday, the Left Party group in the German Bundestag (federal parliament) announced a motion for a resolution calling on the German government to oppose adoption of the bill in the EU Council. The countries that opposed the political agreement in February collectively account for approximately 24% of the total EU population; with Germany's 16% on top, the 35% quorum for a blocking minority would be more than met.

A parliamentary resolution wouldn't be binding on the German government, but it would have political weight. I quickly authored a lobbying guide for German activists seeking to influence the Bundestag vote.

Yesterday (Monday), the official website of the German federal parliament announced a plenary debate for this week's Thursday (April 4) at 5:15 PM local time, initially indicating that there might or might not be an immediate vote. Today (Tuesday), they added that a second motion to the same effect had been brought by the libertarian Free Democratic Party (FDP).

But later it became known, based on tweets by Petra Sitte, a member of the German federal parliament from the Left Party, and by a staffer of the Left Party's parliamentary group, that the government coalition parties (Christian Democratic Union, Christian Social Union, and Social Democratic Party) had decided to refer the matter to the relevant parliamentary committees.

As a result, it's virtually impossible that the German Bundestag can hold a plenary vote on this matter--which would have forced CDU/CSU and SPD to come clean. So far the CDU/CSU and SPD groups in the German parliament are just hiding behind the European Parliament's decision (where almost all SPD MEPs voted against the proposal, while all but one CDU/CSU MEPs voted in favor), and behind the intergovernmental negotiations between Germany and France that led to this ill-conceived proposal (which may even deprive EU users of such services as Amazon's Twitch, as Twitch CEO Emmett Shear reiterated after the EP vote).

With the parliamentary process in Germany being stalled, the only way that the Bundestag could still hold a plenary vote prior to a "fait accompli" at the EU level would be if the EU Council delayed the adoption of the bill. Theoretically, Germany could ask for more time, pointing to the parliamentary process at home that should unfold. But that's not what that government intends to do.

Basically, it appears the Franco-German agreement on Article 13 (now Article 17) was all about Merkel giving Macron a kind of consolation prize. The Macron regime will probably go down in history as one of the least successful and, ultimately, least popular governments in French history, not only but also because of the Yellow Vests protests. Macron gave speeches and authored op-eds for newspapers all over Europe to promote his vision of closer European integration, especially in the area of economic and monetary policy. If it were up to Merkel herself, or her minister of economic affairs and longtime trusted sidekick, Peter Altmaier, she'd hand him everything he wants on a silver platter. However, she and her domestic allies know very well that Macron's most ambitious proposals would meet significant resistance in Germany (and also in other Northern European countries).

In terms of IT industry policy, what Macron really wanted was the "Digital Tax." In principle, Merkel would like that idea, but it would be viewed by the Trump Administration as an act of trade war, leading to retaliation against Germany's automotive industry. That's why Germany tried to appear constructive, but actually didn't want to support Macron's idea. With Article 13 (now Article 17) of the EU Copyright Directive, an indirect digital tax is imposed on content-sharing platforms--though Europe is going to simply cut its nose to spite its face as this will harm small European platform companies and European consumers.

In other words, Macron lost the real battle. He can keep talking and writing about the digital tax and closer European integration, but he won't get even 10% of what he's looking for. His country is in disastrous shape: formerly known for a high-quality education system and smart population, it has statistically the least math-savvy students of all large EU Member States, with only 2% of them reaching the top performance level in the international TIMSS study applying uniform standards to test-takers around the globe. By comparison, Singapore is at 50% (25 times France), South Korea at 40% (20 times France), Russia at 20% (10 times France), the United States at 14% (7 times France), Germany at 5% (like Turkey), and France can only "compete" and compare with Persian Gulf states. There are some extremely smart, hard-working and talented people coming out of the French education system, but many of them get hired away. The brain drain won't stop, and bad policies such as the EU Copyright Directive will only serve to exacerbate the problem. Macron will keep talking about France as a "startup nation," but that's lip service at best and reality distortion at worst.

The German government parties want to help stabilize the Macron regime. Article 13 (now Article 17) was a stupid concession, and Merkel may have underestimated how many people would be outraged and worried--and what damage this would do to the way many ordinary citizens perceive EU democracy. Those parties are at risk of losing an entire generation of voters, and the leadership of the Social Democratic Party appears unrealistic enough to believe that by speaking out against upload filters while allowing the government to adopt the bill in the EU Council (and preventing the national parliament from holding a plenary vote in time), they can mislead people. Just like Merkel's CDU/CSU, the SPD may lose an entire generation of voters as a result of this. Case in point, "Herr Newstime," one of Germany's most popular YouTubers, announced a few days ago that he was leaving the SPD. The parliamentary resolution would have been one last chance for the SPD to correct its error and oppose Internet upload filters.

The Internet will figure this out. And the Internet won't forget.

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The triply illegitimate European Parliament vote in favor of a copyright bill requiring upload filters (as the French government, its #1 proponent, has since stated clearly and German EU commissioner Günther Oettinger considers "not entirely avoidable")=should be repeated as Czech conservative MEP Tomáš Zdechovský formally proposes. But in any event, it's not yet a "settled matter" as Mr. Oettinger, who initially came up with the ill-conceived proposal that led to this mess, just claimed in an interview in which he threatened sanctions against countries that might "water down" the text through the national implementation process. The EU Council still has to formally adopt the bill, and since it's clearly irreconcilable with the German government coalition agreement, let's see what happens.

The following tweet (in Swedish) greatly increases the likelihood of the Swedish government, which supported the political agremeent in February, being forced to change its stance and vote against the bill (this post continues below the tweet with further commentary and analysis):

Vi ska tvinga regeringen att säga nej. De hade inte mandat att säga ja.

— Tomas Tobé (@tomastobe) March 28, 2019

Tomas Tobé is the top-listed candidate of the Moderaterna ("Moderates"), the Swedish conservative party that is a member of the European People's Party (EPP) just like Merkel's CDU/CSU, and he's presently the vice chairman of the Swedish national parliament's Committee on European Union Affairs. A Swedish Twitter friend of mine translated Mr. Tobé's tweet as follows:

"We should force the government to say no. They had no mandate to say yes."

Mr. Tobé was replying to Amelia Andersdotter, a former Pirate Party MEP from Sweden. Amelia and I disagree on economic and migration policies (anyone connected to one of us on Facebook could tell), and her IP reform proposals go far beyond not only mine but also the ideas espoused by the more centrist Julia Reda MEP, the leader of the fight against the copyright bill in the European Parliament (who just left the German Pirate Party and wasn't seeking reelection anyway). Anyway, Amelia is famous in Sweden, and it's great to see she's fighting for this cause.

Mr. Tobé's reply to Amelia is very significant. As the Riksdagen website explains (in English), the Swedish government "must gain support for its EU policies in the Riksdag ahead of meetings in the Council of Ministers."

I haven't received definitive confirmation yet, but I've been told that this committee will meet on Friday, April 5, and will then have to hold a vote on the copyright bill. Let's consider three facts here:

• All Swedish MEPs except for a couple of social democrats had expressed their intent to vote against upload filters (Article 13, now Article 17). The Sweden Democrats are also clearly against upload filters, though their MEPs accidentally hit the wrong button.

• Sweden, with Spotify and some other digital businesses, is actually stronger in the Internet platform economy than any other EU Member State (even far larger ones).

• While the Moderaterna party isn't currently part of the Swedish government, the left-green government coalition is a minority government, making it particularly dependent on parliamentary decisions.

In light of all of the above, it's reasonably likely that the Riksdag's EU affairs committee will vote against the copyright bill, and the Swedish government will have to vote accordingly.

The most important aspect of this is the potential fallout with a view to Germany. Even with Sweden changing its vote from Yes to No, we're still far short of a blocking minority as I'll explain further below. But Germany could single-handedly block the deal (as could the UK, by the way, though there's little hope of that happening). A Swedish reversal would embolden and encourage those who'd like the German government to withdraw its support.

The Social Democratic Party of Germany (SPD), Merkel's coalition partner, has so far tried to have its cake and eat it: they spoke out and almost all of their MEPs voted against upload filters, but they caved to a clear breach of the coalition agreement by Merkel and her minister of economic affairs, Peter Altmaier. Here's the relevant passage from the coalition agreement (lines 2212-2214):

"Eine Verpflichtung von Plattformen zum Einsatz von Upload-Filtern, um von Nutzern hochgeladene Inhalte nach urheberrechtsverletzenden Inhalten zu 'filtern', lehnen wir als unverhältnismäßig ab."

Here's my unofficial translation:

"We consider disproportionate and therefore oppose a requirement on platforms to install upload filters for the purpose of 'filtering' out user-generated content based on copyright-infringing content."

Pressure on the SPD will grow should Mr. Tobé's plan work out in Sweden. And then the numbers would be in place to prevent the bill from being passed into law.

As for the numbers, I've obtained from the EU Council's press office the current list of population sizes that is used in the computation of a qualified majority. A qualified majority in the Council has two prongs:

• They need at least 15 Member States to support a proposal, and

• the countries voting in favor must collectively account for at least 65% of the EU's total population size.

Conversely, a blocking minority can consist of either

• 13 countries (but we only have five, so this is unrealistic), or (now comes the far more achievable option)

• at least four countries collectively accounting for more than 35% of the EU's total population size.

With a view to the copyright bill, we still had five countries on our side in February. In decreasing order by size: Italy, Poland, Finland, the Netherlands, and Luxembourg.

Pre-Brexit, those countries collectively account for 23.88% of the EU's total population size. With Sweden, that number would go up only marginally to 25.86%. So we'd still need a lot more support for our cause. We'd need Germany--that's ground zero. With Germany in our column, we wouldn't need Sweden--but a Swedish reversal would make it far harder for the German government to stand by the directive and its horse trade with France.

Should there be delays and Brexit occur (currently scheduled for April 12), the five "dissident" countries from the February Council meeting account for 27.42% of the EU-27's total population size, and with Sweden we'd have 29.69%, in which case the combination of a few small countries might also work without Germany. But without Germany on our side, the Council will most likely adopt the bill on April 8 or 9 anyway.

I'll keep my fingers crossed for the Riksdag's Friday decision. It could set off an avalanche, not in terms of the number of countries but the ability to improve the prospects of a German reversal. Maybe the SPD would then have the courage to jeopardize the stability of the German government coalition, as Julia Reda MEP said this week they'd have to in order to show they're truly opposed to upload filters.

In this context, let also point you to a press release by the Foundation for a Free Information Infrastructure (FFII) calling on national parliaments to force their governments to vote against "Soviet-style Internet upload filters."

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What makes it hard for me to comment on some developments regarding the EU Copyright Directive as harshly as I'd like to is that there are some Members of the Europen Parliament (MEPs) involved with whom I got along very well in other contexts. Otherwise I'd have voiced some outrage here over EP President Tajani's refusal to accept the SaveTheInternet petition signed by 5.1 million people, and I'd express outrage now over a proposal by Othmar Karas MEP, an Austrian conservative (but a different kind of conservative than Austria's chancellor Sebastian Kurz).

It would be a better choice for Mr. Karas to support his colleague (from the same political group, the European People's Party) Tomáš Zdechovský's call for repeating the European Parliament vote on whether or not to allow votes on individual amendments than to toss out proposals that look helpful at first sight but are highly unlikely to solve the problem. That's what's called misleading voters, by the way. But I won't say anything harsher than that for the reason I gave further above.

In a letter to voters, which I've also obtained from his office, Mr. Karas seeks to assure Austrian startups that they'll be fine because of how that small Alpine country will transpose the EU directive and, particularly, the upload-filter article (Article 17, previously Article 13 and still mostly referred to by the original number) into national (Austrian) law. Here's the related passage (click on the image to enlarge; this post continues below the image):

Mr. Karas tells voters that Austria's Chancellery Minister for the EU, Art, Culture and Media, Gernot Blümel, assured Mr. Karas that it would be possible to limit the scope of Article 13/17 to platforms that have so many users that startups would benefit from a de facto exemption.

The directive doesn't apply to companies that are less than three years old, generate annual revenues below 10 million euros, and have fewer than 5 million monthly users, but if a company meets only one of the criteria (such as a company that's four years old), it doesn't benefit from the explicit startup exemption in the EU directive.

The loophole that Mr. Karas suggests he has identified is that the directive doesn't contain any numerical definition of what platforms are large enough to fall within the scope of the directive. It's clear that a platform must have a significant quantity of copyrighted content uploaded by (and viewed by= users, but no number is specified. In the Austrian implementation of the directive, Mr. Karas and his Österreichische Volksparty (Austrian People's Party) plan to require a quantity that they say startups simply won't reach.

The practical problem is that this would benefit startups only as long as

• such an "Austrian SME rule" isn't successfully challenged in the Court of Justice of the European Union, and

• (the real issue!) as long as they just operate in Austria and in countries that adopt the same approach to a wide-ranging startup carveout.

Copyright law, like all other fields of intellectual property law, is territorial. It's specifically excluded from the "country of origin principle" of the e-commerce directive. Therefore, an Austrian company wouldn't be able to claim that the Austrian implementation of the directive applies to any enforcement against it. Instead, the place where an alleged infringement occurs will matter, and that's where a user accesses the content in question.

The Austrian market is so small that many Austrian Internet startups don't focus exclusively on their domestic market. Instead, they typically offer their services to other German-speaking users as well--and some expand to other language markets, too.

Mr. Karas is right to have concerns over the impact of the directive on startups, but what he proposes is not a reliable solution, and if other EU Member States don't adopt this approach (or if they do but the CJEU holds such wide-ranging exemptions to be irreconcilable with the EU directive, which trumps national law at the end of the day), it's not really useful. There would inevitably by forum shopping (plaintiffs would go where they find the most favorable legal framework and sue there if a potential infringement is location-independent).

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While the proponents of Article 13 (now Article 17) such as the Macron regime are already pushing for the rapid implementation of Internet upload filters and putting pressure on Switzerland to adopt a similar set of rules (so as to avoid the relocation of many EU web servers to the non-EU member states in the heart of Europe), it may turn out soon that those people were simply jumping the gun. There are some dynamics, and this triply illegitimate piece of legislation can still be prevented from being passed into law if we all do what it takes. We'll see in the coming days whether the movement that opposed Article 13 (now Article 17) gets its act together. Most members of that movement apparently haven't understood the opportunities yet, but some have. There clearly are political and procedural ways to turn this around.

One of those who understand that no one is ever beaten unless he gives up the fight is Czech conservative MEP Tomáš Zdechovský. Here's what EURACTIV journalist Samuel Stolton reported on Twitter today, referring to a statement on Mr. Zdechovský's website, which relates to what I explained in my blog post on the accidental vote against allowing votes on amendments:

Czech MEP @TomZdechovsky has requested a new #copyright vote following 'mistakes' by MEPs on the votes for the consideration of amendments #Article11 #Article13: https://t.co/rBhnb6swP2

— Samuel Stolton (@SamuelStolton) March 28, 2019

What's even better is the MEP's response to the question of whether such a "revote" has ever been done before by the EP:

Never. But is time to change it #betterEurope #eureform

— Tomáš Zdechovský 🇨🇿 (@TomZdechovsky) March 28, 2019

This attitude makes all the difference in the world between winners and losers. While I have the greatest respect for the efforts that some key players made in the build-up to the EP vote, I disagree with those who suggest that MEPs who changed their votes merely wanted to avoid being held responsible for their decision. That's unsupported by the facts. I've looked at the list of MEPs who said they wanted to vote in favor of the introduction of amendments, and it's easy to verify that they include MEPs who have consistently been against Article 13. Also, there definitely was confusion: the President of the European Parliament himself got confused. It's unfair vis-à-vis those MEPs to insinuate that they're lying, and it's politically unwise since the illegitimacy of the bill is a fact we should stress, not something we should deny, much less deny on an implausible basis.

Just to be clear, Mr. Zdechovský correctly voted in favor of admitting amendments, as evidenced by the voting list prior to MEPs submitting changed positions.

As I explained right after the vote, if we merely prevented the German government from approving the bill in the EU Council prior to the late-May elections, the Parliament could ask for a restart of the process. That's what the Parliament requested in connection with software patents (the Commission declined, but then the Parliament threw out the entire bill). The "revote" request is an interesting new variant of the same approach.

What all of us can do in the meantime is to sign a change.org petition calling for a revote. I've already done so and encourage everyone to do the same, for the sake of 21st-century creativity, innovation, consumer choice, and democratic legitimacy.

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