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.

France introduces a new weapon against online piracy

France has introduced new bill targeting online piracy. France’s National Assembly has approved a law based on which holders of copyright and related rights will be able to ask courts for the so-called dynamic injunctions. The purpose of these injunctions is to block all websites and servers that broadcast illegal content.

What’s more, such injunctions will be valid for a year saving copyright owners time and money to keep them in place. In addition, these injunctions will block “mirror” websites that are created for broadcasting of illegal content in an attempt to shirk an already issued injunction.

This new bill is welcomed by all right holders, especially those related to broadcasting of sport events where piracy is a significant problem.

Even before this new law right holders were able to rely on injunctions but the procedure was slower and not completely on par with the dynamic nature of the online broadcasting.

Source: WIPR.

To what extent linking and framing of copyrighted works is legal in the EU – a new EU Court decision

The European court has ruled in case C‑392/19 VG Bild-Kunst v Stiftung Preußischer Kulturbesitz. This case concerns the question to what extend linking and framing of copyrighted content can be illegal on the territory of the EU.

The case has the following background:

SPK is the operator of the Deutsche Digitale Bibliothek (DDB), a digital library devoted to culture and knowledge, which networks German cultural and scientific institutions.

The DDB website contains links to digitised content stored on the internet portals of participating institutions. However, as a ‘digital showcase’, the DDB itself stores only thumbnails, that is to say smaller versions of the original images of the subject matter. When the user clicks on one of those thumbnails, he or she is redirected to the page concerning the particular subject matter on the DDB website, which contains an enlarged version of the thumbnail concerned, with a resolution of 440 by 330 pixels. When that enlarged thumbnail is clicked on, or the ‘magnifying glass’ function is used, a further enlarged version of the thumbnail, with a maximum resolution of 800 by 600 pixels, is overlaid by means of a ‘lightbox’. Further, the ‘Display object on original site’ button contains a direct link to the website of the institution providing the subject matter, either to its home page or to the page relating to that subject matter.

VG Bild-Kunst maintains that the conclusion with SPK of a licence agreement for the use of its catalogue of works in the form of thumbnails should be subject to the condition that the agreement include a provision whereby the licensee undertakes, when using the protected works and subject matter covered by the agreement, to implement effective technological measures against the framing by third parties of the thumbnails of the protected works or subject matter displayed on the DDB website.

SPK considers that such a term in the agreement is not reasonable in the light of the legislation relating to copyright, and brought an action before the Regional Court of Berlin, Germany seeking a declaration that VG Bild‑Kunst is required to grant SPK that licence without any condition requiring SKK to implement such technological measures.

That action was dismissed by the Regional Court of Berlin. An appeal having been brought by SPK, the judgment of the Landgericht Berlin was set aside by the Higher Regional Court of Berlin, Germany. By its appeal on a point of law, VG Bild-Kunst seeks the dismissal of SPK’s action.

The Federal Court of Justice, Germany points out, first, that, pursuant to the first sentence of Paragraph 34(1) of the VGG, which transposes Article 16 of Directive 2014/26, collecting societies are obliged to grant to any person who so requests, on reasonable terms, a licence to use the rights whose management is entrusted to them.

Second, in accordance with its case-law established in the period during which the national legislation repealed by the VGG was applicable, case-law which, in the opinion of the referring court, continues to be of some relevance, it was accepted that collecting societies could, exceptionally, depart from that obligation and refuse to grant a licence for the use of the rights management of which was entrusted to them, provided that that refusal did not constitute an abuse of monopoly power and that the licence application was objectionable by reference to overriding legitimate interests. In that regard, in order to determine whether there is an objectively justified exception, it was necessary to weigh up the interests of the parties concerned, taking into account the purpose of the legislation and the objective underlying the obligation that applies, in principle, to collecting societies.

The outcome of the appeal on a point of law depends on the issue whether, contrary to what was held by the appeal court, the embedding of a work – which is available on a website, in this instance that of the DDB, with the consent of the right holder – in the website of a third party by means of framing constitutes a communication to the public of that work within the meaning of Article 3(1) of Directive 2001/29 where it circumvents protection measures against framing adopted by the right holder or imposed by him or her on a licensee. If that were the case, the rights of the members of VG Bild-Kunst would be liable to be affected and VG Bild-Kunst could properly subject the grant of a licence to SPK to the condition that SPK undertake, in the licence agreement, to implement such protection measures.

The referring court considers that, when thumbnails are embedded by framing in a third-party website so as to circumvent the technological protection measures adopted or imposed by the right holder, such embedding constitutes a communication to a new public. If that were not the case, the right of communication of a work to the public on the internet would, contrary to Article 3(3) of Directive 2001/29, be de facto exhausted as soon as that work was made freely accessible to all internet users on a website with the authorisation of the right holder, and that right holder would be unable to retain control of the economic exploitation of his or her work and to ensure adequate involvement in its use for economic purposes.

Federal Court of Justice is however uncertain as to the response to that question, having regard to the case-law of the Court in relation to the practice of framing (order of 21 October 2014, BestWater International, C‑348/13, not published, EU:C:2014:2315) and to the freedom of expression and information guaranteed by Article 11 of the Charter of Fundamental Rights of the European Union (‘the Charter’) in the digital context (judgment of 8 September 2016, GS Media, C‑160/15, EU:C:2016:644, paragraph 45), case-law which indicates that hyperlinks contribute to the smooth functioning of the internet and to the exchange of opinions and information, and accordingly it decided to stay the proceedings and to refer the following question to the Court for a preliminary ruling:

‘Does the embedding of a work – which is available on a freely accessible website with the consent of the right holder – in the website of a third party by way of framing constitute communication to the public of that work within the meaning of Article 3(1) of Directive 2001/29 where it circumvents protection measures against framing adopted or imposed by the right holder?’

The Court’s decision:

Article 3(1) 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 embedding, by means of the technique of framing, in a third party website page, of works that are protected by copyright and that are freely accessible to the public with the authorisation of the copyright holder on another website, where that embedding circumvents measures adopted or imposed by that copyright holder to provide protection from framing, constitutes a communication to the public within the meaning of that provision.

Whether links to copyrighted content is legal in the light of possible framing?

Advocate General of the European court M. SZPUNAR has issued his opinion in case C‑392/19 VG Bild-Kunst v Stiftung Preußischer Kulturbesitz.

The dispute concerns the following background:

Verwertungsgesellschaft Bild-Kunst (‘VG Bild-Kunst’) is a copyright collecting society for the visual arts in Germany. Stiftung Preußischer Kulturbesitz (‘SPK’) is a foundation under German law.

SPK is the operator of the Deutsche Digitale Bibliothek (DDB), a digital library devoted to culture and knowledge, which networks German cultural and scientific institutions.

The DDB website contains links to digitised content stored on the internet portals of participating institutions. As a ‘digital showcase’, the DDB itself stores only thumbnails, that is to say smaller versions of the original images. When a user clicks on a search result, he or she is redirected to the page for the object – on the DDB’s site – which contains an enlarged version of the image (440 x 330 pixels). When that image is clicked on or the ‘magnifying glass’ function is used, an enlarged version of the thumbnail, with a maximum resolution of 800 x 600 pixels, is displayed in a lightbox. Moreover, the ‘Display object on original site’ button contains a direct link to the website of the institution providing the object (either a simple link to its home page or a deep link to the page for the object). The DDB uses works with the authorisation of the holders of the copyright in those works.

VG Bild-Kunst makes the conclusion with SPK of a licence agreement for the use of its catalogue of works in the form of thumbnails conditional on the inclusion of a provision whereby the licensee undertakes, when using the protected works and subject matter covered by the agreement, to apply effective technological measures against the framing by third parties of the thumbnails of the protected works or subject matter displayed on the DDB website.

Taking the view that such a contractual provision was unreasonable from the point of view of copyright, SPK brought an action for declaratory relief before the Regional Court, Germany seeking a declaration that VG Bild-Kunst was required to grant the licence in question to SPK without making that licence conditional on the implementation of those technological measures. That action was initially dismissed by the Regional Court. On appeal by SPK, the judgment of the Regional Court was overturned by the Higher Regional Court, Germany. By its appeal on a point of law (Revision), VG Bild-Kunst seeks the dismissal of SPK’s action.

Federal Court of Justice, Germany points out, first, that, pursuant to the first sentence of Paragraph 34(1) of the VGG, collecting societies are required to grant to any person who so requests, on reasonable terms, a licence to use the rights entrusted to them for management. The referring court states, secondly, that, according to its case-law applicable in the present case, it is accepted that collecting societies may, in exceptional cases, derogate from their obligation and refuse to grant a licence, provided that that refusal does not constitute an abuse of monopoly power and that it is possible to rely, in opposition to the licence application, on overriding legitimate interests. In that regard, in order to determine whether there is an objectively justified exception, it is necessary to weigh up the interests of the persons concerned, taking into account the purpose of the law and the objective underlying that basic obligation of collecting societies.

The outcome of the appeal on a point of law depends on whether the embedding of a work – which is available on a website, such as that of the DDB, with the consent of the rightholder – in the website of a third party by way of framing constitutes communication to the public of that work within the meaning of Article 3(1) of Directive 2001/29/EC where it circumvents protection measures against framing taken by the rightholder or imposed by him or her on a licensee. If it does, the rights of the members of VG Bild-Kunst are affected and it could legitimately request that the obligation to implement technological measures against framing be included in the licence agreement with SPK.

Being uncertain as to the answer to be given to that question, in the light of the Court’s case-law on the use of hyperlinks on the internet, the Federal Court of Justice decided to stay the proceedings and to refer the following question to the Court for a preliminary ruling:

‘Does the embedding of a work – which is available on a freely accessible website with the consent of the rightholder – in the website of a third party by way of framing constitute communication to the public of that work within the meaning of Article 3(1) of Directive 2001/29/EC where it occurs through circumvention of protection measures against framing taken or instigated by the rightholder?’

The Advocate General’s opinion:

(1) Article 3(1) 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 embedding in a webpage of copyright-protected works freely available to the public with the authorisation of the copyright holder on other websites, in such a way that those works are automatically displayed on that page as soon as it is opened, without any further action on the part of the user, constitutes a communication to the public within the meaning of that provision.

(2)  That article must be interpreted as meaning that the embedding of a work – which has been made freely available to the public on a website with the consent of the rightholder – in the website of a third party by means of a clickable link using the framing technique does not constitute a communication to the public within the meaning of that provision, where that embedding circumvents protection measures against framing taken or imposed by the copyright holder.

(3)  Technological protection measures against the embedding in a webpage of copyright-protected works freely available to the public with the authorisation of the copyright holder on other websites, where those works are embedded in such a way that they are automatically displayed on that webpage as soon as it is opened, without any further action on the part of the user, constitute effective protection measures within the meaning of Article 6 of Directive 2001/29.

There is no communication to the public in case of photo disclosed to a court as evidence

The Advocate General of the European Court G. HOGAN has given an opinion in case  C‑637/19 BY v CX. This case concerns the following background:

BY and CX are both natural persons each of whom operates a website. In the course of a prior dispute before the civil courts, CX sent a copy of a page of text, including a photograph, from BY’s website as evidence in the underlying court proceedings. The photograph accordingly forms part of the documentary record in the proceedings.

BY claims to hold the copyright to that photograph and asks that CX be ordered to pay damages, first, for infringement of copyright and, second, for infringement of the special protection conferred on photographs by Article 49a of the Law on Copyright. CX contests any obligation to pay damages and maintains that the disclosure of the material for the purposes of the court proceedings did not amount to a copyright violation.

At first instance, the Patent- och Patent and Commercial Court, Sweden held that the photograph was protected by rights related to copyright, that is to say, by the special protection conferred on photographs. That court found, however, that because the photograph was transmitted to it as a procedural document, any third party may request communication of the photograph in accordance with the applicable provisions of Swedish constitutional law on access to documents. Although the Patent- och Patent and Commercial Court concluded that CX had distributed that photograph to the public within the meaning of the Law on Copyright, it considered that it had not been established that BY had suffered damage and, accordingly, dismissed its application.

BY appealed that judgment to the referring court.

The referring court considers that it must rule in particular on the question of whether the forwarding of a copy of that photograph to a court as a procedural step constitutes an unlawful making available of the work within the meaning of the relevant national copyright legislation, either as a distribution to the public or as a communication to the public.

It is not in dispute that the photograph was sent electronically (by email) to the court hearing the dispute between the parties in the form of an electronic copy. The national court is also seeking to ascertain whether a court may be regarded as falling within the concept of ‘public’ for these purposes.

The referring court points out that there is uncertainty as to the interpretation in Union law of the concepts of ‘communication to the public’ and ‘distribution to the public’ in the case of a transmission to a court in the course of civil proceedings of a copyright-protected work. This raises the question of, first, whether a court may be regarded as falling within the concept of ‘the public’ within the meaning of Directive 2001/29 and, second, whether the term ‘public’ must be given the same meaning in the context of the application of Articles 3(1) and 4(1) of Directive 2001/29.

In that regard, the referring court notes that the Court has held that the concept of ‘public’ refers to an indeterminate number of potential addressees and involves, moreover, a fairly large number of persons. It further emphasised that the aim is to make a work perceptible in any manner appropriate to ‘persons in general’, as opposed to specific persons belonging to a private group. (5)

It is also apparent from the case-law of the Court that the concept of ‘distribution’, within the meaning of Article 4(1) of Directive 2001/29, has the same meaning as the expression ‘making available to the public … by sale’ within the meaning of Article 6(1) of the WCT. It would appear, however, from the judgment of 13 May 2015, Dimensione Direct Sales and Labianca (C‑516/13, EU:C:2015:315), that for there to be ‘distribution to the public’ it is sufficient that the protected work has been delivered to a member of the public.

It is also necessary to ascertain whether, where a procedural document is transmitted to a court, either in the form of a physical (paper) document or as an attachment to an electronic mail, it is a ‘communication to the public’ or a ‘distribution to the public’, since such transmission produces the same effects and has the same purpose in both cases.

The referring court considers that neither that court itself nor the members of its staff could be regarded as constituting the ‘public’ in the general sense of the term. They could not, however, be regarded as belonging to a private group.

Moreover, according to the referring court, while the number of persons who, following transmission, have access to the work is certainly limited to the court’s staff alone, that number would necessarily be variable and should be regarded from the outset as high. Finally, national law provides that anyone has a right of access to documents received by a court.

In those circumstances, the referring court stayed proceedings and referred the following questions to the Court for a preliminary ruling:

‘(1)  Does the term “public” in Articles 3(1) and 4(1) of Directive [2001/29] have a uniform meaning?

(2) If question 1 is answered in the affirmative, is a court to be regarded as falling within the scope of the term “public” within the meaning of those provisions?

(3) If question 1 is answered in the negative:

(a) in the event of communication of a protected work to a court, can that court fall within the scope of the term “public”?

(b)  in the event of distribution of a protected work to a court, can that court fall within the scope of the term “public”?

(4) Does the fact that national legislation lays down a general principle of access to public documents in accordance with which any person who makes a request can access procedural documents transmitted to a court, except where they contain confidential information, affect the assessment of whether transmission to a court of a protected work amounts to a “communication to the public” or a “distribution to the public”?’

The Advocate’s opinion:

‘The electronic transmission by a litigant or a party to proceedings of copyrighted material as evidence to a court does not constitute a “communication to the public” or a “distribution to the public” in accordance with Article 3(1) and Article 4(1) of Directive 2001/29/EC of 22 May 2001. The mere fact that such evidence is considered a public document and that the public may thus, in principle, have access to the copyrighted material in question in accordance with national freedom of information or transparency rules does not entail that it enters the public domain and is free from copyright protection.’