Poland: The DSM Directive finally implemented

The Directive 2019/790 on Copyright in the Digital Single Market (DSM Directive) was adopted in April 2019. Its main goal is to modernise the copyright laws to fit the digital environment and to reduce the value gap between the creative industry and the technology companies using their content by ensuring there is a mechanism to agree fair compensation for the former.

The DSM Directive set the deadline for it to be included in local legal orders as 7th June 2021. It proved challenging and many of the Members States struggled to meet it.

The Polish challenge

Poland not only didn’t meet the original deadline, but also voiced its doubts about the legality of its most important provisions by bringing an action before the Court of Justice of the European Union (CJEU) for annulment of Art. 17 in its entirety.

Art. 17 creates a very complex set of rules for platforms which store and give access to large amounts of copyright protected works. Among other things, this provision obliges such platforms to exercise their best efforts to obtain a licence from the right holders for use of their content and to follow a notice and stay down rule when dealing with notifications of possible infringement. The article also introduces certain transparency obligations.

In its judgment (case C-401/19) delivered in April 2022, the CJEU ruled that art. 17 of the DSM Directive is effective, but the reasoning presented by the court offered a lot in terms of interpretation of the obligations of platforms.

A very long legislative process

The delivery of the judgement did not speed up the legislative process. The former government presented the draft, but the process had not been completed before the elections in October 2023.

The new government started the process anew at the beginning of this year. Despite substantial last minute amendments by the parliament (see below), there were no further delays and the act was signed by the President in August.

The new law

The implementation brings Polish law in line with other Member States on crucial matters for the digital economy. The implementation not only adopts the DSM, but also deals with directive 2019/789 (SATCAB II).

In most cases, the new law closely follows the original text. However, the process was not without controversy.

First of all, there were controversies about the wording of a text and data mining exception, which allows use of data sets created by others in certain situations. This provision is crucial for the training of AI models, among other things.

Surprisingly, the first draft of the new law created a huge stir as the proposal explicitly excluded the…. creation of genAI models from the scope of the exceptions. The government backed off and the final law implements the rules which closely follow the original text.

Another controversial issue was the implementation of the press publishers’ right (art. 15 of the directive). The initial proposal of the government met fierce opposition from the creative industry. After much debate, the upper chamber of the Polish parliament (the Senate) substantially amended the initial text and introduced amendments which strengthen the creators: an obligation to share data, a mediation procedure and the right of the regulator to set the remuneration if the mediation fails.

Other significant amendments are closer to the original text and therefore not so much debated. It does not mean that controversies will not appear soon. As regards implementation of art. 17 of the DSM, the amendment closely follows the directive. However, there are lot of doubts about the concept of “best efforts” and the terms of the licensing agreements with the collective societies and individual rightsholders, which will have to be worked out in practice.

Another provision is the introduction of the right of authors and performers to obtain remuneration for exploitation of their works on the Internet. The act introduces a mediation procedure regarding this new right and lots of comments have been made about how the negotiations with the collective societies over the royalties for using the content will go.