European copyright law and the text and data mining exceptions and limitations – In light of the recent DSM Directive, is the EU approach a hindrance or facilitator to innovation in the region?

The newly adopted European Union (EU) Directive on copyright and related rights in the Digital Single Market (DSM Directive) provides for text and data mining (“TDM”) exceptions for the first time at an EU legislative level. The TDM provisions are a step in the right direction, but the situation remains uncertain for innovators and researchers alike. The DSM Directive’s TDM provisions demonstrate the EU legislature’s lack of understanding of the technical realities of TDM, and the financial and contractual limitations which are faced by those performing such processes, especially companies etc. in the start-up phase. Through these provisions, the EU has made it difficult for valuable TDM output to originate from European-based operators. To drive innovation in the EU and further the commitment to the digital single market, it would have been more desirable for the EU to implement a broad, all-encompassing TDM exception, not been capable of being overridden nor subject to caveats, as is the case in other key innovative jurisdictions. By creating and maintaining a restrictive environment for TDM, which is often a key component of Artificial Intelligence (“AI”) and machine learning, the EU runs the risk of losing a foothold in a growing industry, and causing an exodus of key talent to other TDM-friendly jurisdictions. However, the TDM provisions contained in the DSM Directive are at least one step in the right direction and one can hope that future legislative development in Europe and a sensible approach by Member States will take place in the foreseeable future.