Can peer-to-peer files seeding to be regarded as a communication to the public?

The European Court has ruled in Case C‑597/19 Mircom International Content Management & Consulting (M.I.C.M.) Limited v Telenet BVBA. This case concerns the following:

Mircom International Content Management & Consulting (M.I.C.M.) Limited (‘Mircom’) is a company incorporated under Cypriot law. Under contracts concluded with several producers of erotic films established in the United States and Canada, it holds licences for the communication to the public of their films on peer-to-peer networks and internet file-sharing networks, in particular in the territory of ‘Europe’. Moreover, under those contracts, Mircom is required to investigate acts of infringement of those producers’ exclusive rights committed on peer-to-peer networks and file-sharing networks and, in its own name, to take legal action against the perpetrators of those infringements in order to obtain compensation, 50% of which it must pass on to the producers.

Telenet BVBA, Proximus NV and Scarlet Belgium NV are internet service providers in Belgium.

On 6 June 2019, Mircom brought an action before the Ondernemingsrechtbank Antwerpen (Companies Court, Antwerp, Belgium) seeking, inter alia, that Telenet be ordered to produce the identification data for its customers whose internet connections had been used to share, on a peer-to-peer network by means of the BitTorrent protocol, films from the Mircom catalogue. The IP addresses of those connections were collected on behalf of Mircom by Media Protector GmbH, a company incorporated under German law, using specialised software. Telenet challenges that claim.

Proximus and Scarlet Belgium, which are also the subject of similar actions brought by Mircom, have been granted leave by the referring court to intervene in the main proceedings in support of the form of order sought by Telenet.

The ondernemingsrechtbank Antwerpen (Companies Court, Antwerp) has doubts as to the merits of Mircom’s application. In the first place, it is unsure whether, in view of the specific nature of peer-to-peer networks, users carry out acts of communication to the public of the works they share on those networks. In the second place, that court has doubts whether a company such as Mircom is able to benefit from the protection conferred by EU law in respect of the enforcement of intellectual property rights, since Mircom does not actually exploit the rights acquired by the film producers, but is merely claiming damages from alleged infringers. Such conduct corresponds almost precisely to the definition in legal literature of a ‘copyright troll’. Finally, in the third place, that court has doubts as to the lawfulness of collecting the IP addresses of internet users who have allegedly shared protected works on peer-to-peer networks.

It was in those circumstances that the ondernemingsrechtbank Antwerpen (Companies Court, Antwerp) decided to stay the proceedings and to refer the following questions to the Court for a preliminary ruling:

‘1.  (a) Can the downloading of a file via a peer-to-peer network and the simultaneous provision for uploading of parts (“pieces”) thereof (which may be very fragmentary as compared to the whole) (“seeding”) be regarded as a communication to the public within the meaning of Article 3(1) of Directive 2001/29, even if the individual pieces as such are unusable?

If so,

(b)  is there a de minimis threshold above which the seeding of those pieces would constitute a communication to the public?

(c)  is the fact that seeding can take place automatically (as a result of the torrent client’s settings), and thus without the user’s knowledge, relevant?

2.  (a)  Can a person who is the contractual holder of the copyright (or related rights), but does not himself exploit those rights and merely claims damages from alleged infringers – and whose economic business model thus depends on the existence of piracy, not on combating it – enjoy the same rights as those conferred by Chapter II of Directive 2004/48 on authors or licence holders who do exploit copyright in the normal way?

(b)  How can the licence holder in that case have suffered “prejudice” (within the meaning of Article 13 of Directive 2004/48) as a result of the infringement?

3.  Are the specific circumstances set out in questions 1 and 2 relevant when assessing the correct balance to be struck between, on the one hand, the enforcement of intellectual property rights and, on the other, the rights and freedoms safeguarded by the [Charter of Fundamental Rights of the European Union (“the Charter”)], such as respect for private life and protection of personal data, in particular in the context of the assessment of proportionality?

4.   Is, in all those circumstances, the systematic registration and general further processing of the IP-addresses of a “swarm” of “seeders” (by the licence holder himself, and by a third party on his behalf) legitimate under Regulation [2016/679], and specifically under Article 6(1)(f) thereof?’

The Court’s decision:

(1) Article 3 of Directive 2001/29/EC of the European Parliament and of the Council of 22 May 2001 on the harmonisation of certain aspects of copyright and related rights in the information society must be interpreted as meaning that the act of making pieces of a file containing a protected work available for download within the context of a peer-to-peer network, even before the user concerned has himself downloaded that file in its entirety, falls within the scope of the right to make works available to the public, in accordance with that article, and that user’s full knowledge of the facts is not decisive.

(2) Article 4(b) of Directive 2004/48/EC of the European Parliament and of the Council of 29 April 2004 on the enforcement of intellectual property rights must be interpreted as meaning that a body which, although it has acquired certain rights over protected works, does not exploit them, but merely claims damages from individuals who infringe those rights, does not have the status to benefit from the measures, procedures and remedies provided for in Chapter II of that directive, in so far as the national court finds that the acquisition of rights by that body was solely for the purpose of obtaining that status. Directive 2004/48 neither requires nor precludes the Member State from attributing that status, in its national legislation, to an assignee of claims relating to infringements of intellectual property rights.

(3)  Article 8(1) of Directive 2004/48, read in conjunction with Article 3(2) thereof, must be interpreted as meaning that the national court must refuse to grant entitlement to the right of information provided for in Article 8 of that directive if, in the light of the circumstances of the dispute, it finds that the request for information is unjustified or unlawful.

(4) Article 6(1)(f) of Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, and repealing Directive 95/46/EC must be interpreted as meaning that the recording of the IP addresses of persons whose internet connections have been used to share protected works on peer-to-peer networks constitutes the lawful processing of personal data where that recording is carried out in the pursuit of a legitimate interest of the controller or a third party, in particular in order to file a justified request for the disclosure of the names of the owners of the internet connections identified by the IP addresses pursuant to Article 8(1)(c) of Directive 2004/48.