Mandatory exception for digital uses for the purpose of illustration for teaching, including across borders
Option 2 would bring a high degree of legal certainty to educational establishments and teachers across all MS. This could lead in the short term to an increased use of illustrative resources and an enriched learning environment for students. The actual impacts on education institutions would vary between MS, depending on how the optional teaching exception has been implemented so far and on the licensing mechanisms in place.
The impact of Option 2 would be stronger in MS where the scope of the existing teaching exception is currently limited or unclear (e.g. where the teaching exception does not clearly apply to digital uses or where it applies only to certain types of works and media). Importantly, Option 2 would allow in particular higher education institutions to gain legal certainty for cross-border uses. Distance and online students, including those located in other MS, would be able to access the materials used and made available by teachers under the same conditions as on-site students.
However, the legal certainty offered by Option 2 to educational establishments and teachers may be undermined in the long term by a reduced quality and variety of educational resources, which could result from the application of the exception to textbooks and other resources produced specifically for education.
Option 2 would significantly reduce the transaction costs supported by educational establishments when digital and cross-border uses are not allowed under the national teaching exception or under a collective licensing agreement. These transaction costs include staff costs for providing guidance to teachers on the use of specific resources, identifying rightholders and obtaining the necessary authorisations; they may be particularly high when authorisation need to be obtained on a work-by-work basis (which may often be the case for using AV works). No evidence could be found to quantify these costs.
Option 2 could result in a reduction of licensing costs in MS where secondary uses of protected content in education are currently allowed under collective licensing schemes (including ECL). Part of the uses (digital uses for illustrating teaching) would become covered by the new EU exception. Educational establishments would therefore be in a position to renegotiate their agreements with CMOs which may be constrained to review the scope of their licences and reduce licence fees. The reduction of licensing costs under this Option would be limited, in particular if MS introduce an obligation to compensate rightholders for the uses under the new exception.
The impact of Option 2 on licensing revenues would vary between MS, depending on how the optional teaching exception has been implemented so far and on MS decision to require compensation for the uses under the new EU exception or not.
In MS where the current teaching exception already encompasses digital uses for all types of works (e.g. BE and NL), no impact is expected on rightholders’ revenues. The authorisation of cross-border uses, in the conditions foreseen under Option 2, is not expected to prejudice the rightholders’ interests, as it would not result in the uncontrolled dissemination of content online (cross-border uses under the exception would be limited to distance students enrolled with a specific educational establishment and accessing through a secure network). Therefore, it is not expected to affect the amount of the compensation required in certain MS.
In MS where the current teaching exception is limited to analogue uses or does not clearly allow digital uses (notably HR, IT, PL), rightholders may be negatively affected only to the extent their current revenues rely on the licensing of digital educational uses. This may be the cases in certain countries, where digital uses are subject to voluntary collective licensing agreements. However, it seems that in the past the restrictive implementation of the exception did not favour the development of licences. Therefore, in this case the impact of Option 2 is expected to be limited. It could nevertheless reduce licensing opportunities in the medium term.
Significant impact is expected in MS where digital secondary uses of content for teaching activities currently require a licence., i.e. MS using ECL (DK, FI, SE) and MS where the exception is subject to the availability of licences (UK, IE). In these cases, rightholders would not be able anymore to exercise their exclusive rights to authorise or prohibit digital uses of their works for illustrating teaching. They would be able to continue offering licences only for print copies and digital uses which would go beyond the scope of the new exception (e.g. in terms of extent of copying). This would imply a significant loss of secondary licensing income.
The reduction of secondary licensing revenue is expected to have a direct impact on educational publishers’ incentive to invest in new content. It is likely to hit first digital educational resources, whose market is not profitable yet, notably because of the high fixed costs associated to the development of digital products and educational resources platforms. Evidence collected in the UK from a sample of educational publishers indicated that revenues from secondary licensing equate to 19 % of their investment in content development. In the long term, the lack of sufficient investment in digital products could affect the competitiveness of the European educational publishing industry, including at international level. International sales of textbooks and academic books are important notably for the UK and French educational publishing industries (sales in English/French-language markets).
Option 2 would affect the right of property, with some uses which currently require the authorisation of rightholders in certain MS being covered by a mandatory exception. On the other hand, it would have some positive impacts on the right to education as it will support the further development of distance education.