Free wi-fi access and copyright claims – important considerations

WIFIThe Advocate General of the European court M. SZPUNAR issued an opinion in Case C‑484/14  Tobias Mc Fadden v Sony Music Entertainment Germany GmbH. The case concerns the following:

The applicant in the main proceedings operates a business selling and renting lighting and sound systems for various events.

He is the owner of an Internet connection which he uses via a Wi-Fi network. On 4 September 2010, a musical work was unlawfully offered for downloading via that Internet connection.

Sony Music is a phonogram producer and the holder of the rights in that musical work. By letter of 29 October 2010, Sony Music gave Mr Mc Fadden formal notice concerning the infringement of its rights.

As is apparent from the order for reference, Mr Mc Fadden argues in this connection that, in the course of his business, he operated a Wi-Fi network, accessible to any user, over which he exercised no control. He deliberately did not password-protect that network so as to give the public access to the Internet. Mr Mc Fadden asserts that he did not commit the infringement alleged, but does not rule out the possibility that it was committed by one of the users of his network.

Following the formal notice, Mr Mc Fadden brought before the referring court an action for a negative declaration (‘negative Feststellungsklage’). Sony Music brought a counterclaim, seeking an injunction and damages.

By judgment of 16 January 2014, given in default of appearance, the referring court dismissed Mr Mc Fadden’s application and upheld the counterclaim, granting an injunction against Mr Mc Fadden on the ground of his directly liability for the infringement at issue and ordering him to pay damages, the costs of the formal notice, and costs.

Mr Mc Fadden brought an appeal against that judgment in default. In particular, he has argued that he cannot be held liable by reason of the provisions of German law transposing Article 12(1) of Directive 2000/31.

In the appeal, Sony Music asks the court to uphold the default judgment and, in the alternative, to issue an injunction and order Mr Mc Fadden to pay damages and the costs of the formal notice on the ground of his indirect liability (‘Störerhaftung’).

The referring court states that, at this stage, it does not believe that Mr Mc Fadden is directly liable, but is minded to reach a finding of indirect liability (‘Störerhaftung’) on the ground that his Wi-Fi network had not been made secure.

In this connection, the referring court states that it is inclined to apply, by analogy, the Bundesgerichtshof’s ruling of 12 May 2010 in Sommer unseres Lebens (I ZR 121/08), taking the view that that judgment, which concerned private persons, should applya fortiori in the case of a professional person operating a Wi-Fi network that is accessible to the public. According to the referring court, such a finding of liability on that ground would not, however, be possible if the facts of the dispute in the main proceedings fell within the scope of application of Article 12(1) of Directive 2000/31, transposed into German law by Paragraph 8(1) of the Law on electronic media of 26 February 2007, as amended by the Law of 31 March 2010.

The Advocate General’s opinion:

In the light of the foregoing considerations, I propose that the Court should answer the questions referred for a preliminary ruling by the Landgericht München I (Regional Court, Munich I) as follows:

1.  Articles 2(a) and (b) and 12(1) of Directive 2000/31/EC must be interpreted as applying to a person who, as an adjunct to his principal economic activity, operates a local wireless network with Internet access that is accessible to the public free of charge.

2.   Article 12(1) of Directive 2000/31 precludes the making of any order against a provider of mere conduit services that entails a finding of civil liability against that service provider. That provision therefore precludes the making of an order against a provider of such services not only for the payment of damages, but also for the payment of the costs of giving formal notice or other costs relating to an infringement of copyright or a related right committed by a third party as a result of the information transmitted.

3.  Article 12(1) and (3) of Directive 2000/31 does not preclude the granting of a court injunction non-compliance with which is punishable by a fine.

National courts must, when issuing such an injunction, ensure:

–  that the measures in question comply with Article 3 of Directive 2004/48/EC of the European Parliament and of the Council of 29 April 2004 on the enforcement of intellectual property rights and, in particular, are effective, proportionate and dissuasive;

–   that, in accordance with Articles 12(3) and 15(1) of Directive 2000/31, they are aimed at bringing a specific infringement to an end or preventing a specific infringement and do not entail a general obligation to monitor, and

–  that the application of those provisions, and of other detailed procedures laid down in national law, achieves a fair balance between the applicable fundamental rights, in particular, those protected by Articles 11 and 16 of the Charter of Fundament Rights of the European Union and by Article 17(2) of that Charter.

4.      Articles 12(3) and 15(1) of Directive 2000/31, interpreted in the light of the requirements stemming from the protection of the applicable fundamental rights, do not, in principle, preclude the issuing of an injunction which leaves it to the addressee thereof to decide what specific measures should be taken. It nevertheless falls to the national court hearing an application for an injunction to ensure that appropriate measures do indeed exist that are consistent with the restrictions imposed by EU law.

Those provisions preclude the issuing of an injunction against a person who operates a local wireless network with Internet access that is accessible to the public, as an adjunct to his principal economic activity, where the addressee of the injunction is able to comply with it only by:

–  terminating the Internet connection, or

–  password-protecting the Internet connection, or

–   examining all communications transmitted through it in order to ascertain whether the copyright-protected work in question is unlawfully transmitted again.

 

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