The First Civil Senate of the Federal Court of Justice, which is responsible inter alia for copyright law, has referred questions to the Court of Justice of the European Union on the liability of the operator of a sharehosting service on the internet for copyright-infringing content uploaded by third parties.
Facts:
The defendant operates the sharehosting service "uploaded" on the internet. This service offers anyone free storage space for uploading files of any content. For each uploaded file, the defendant automatically creates an electronic reference (download link) to the file storage space and automatically communicates this to the user. The defendant offers neither a table of contents nor a corresponding search function for the files stored with it. However, users can place the download links in so-called link collections on the internet. These are offered by third parties and contain information on the content of the files stored on the defendant's service. In this way, other users can access the files stored on the defendant's servers.
Downloading files from the defendant's platform is possible free of charge. However, quantity and speed are limited for non-registered users and those with a free membership. Paying users, with prices ranging from EUR 4.99 for two days to EUR 99.99 for two years, have a daily download quota of 30 GB with unlimited download speed. In addition, the defendant pays download fees to users who upload files, up to €40 for 1,000 downloads.
The defendant's service is used both for legal applications and for those that infringe third party copyrights. In the past, the defendant already received large numbers of notifications about the availability of infringing content from service providers acting on behalf of the right holders ("Abuse Notices"). According to the defendant's general terms and conditions, users are prohibited from committing copyright infringements via the defendant's platform.
The plaintiff, an international specialist publisher, sees an infringement of its copyrights in the fact that files to which it has exclusive rights of use are accessible on the defendant's servers via external link collections. The plaintiff filed a claim against the defendant primarily as a perpetrator, alternatively as a participant and further alternatively as an interferer of a copyright infringement for injunctive relief and for the provision of information and sought a declaration that the defendant was liable for damages.
The court of appeal ordered the defendant (only) to cease and desist as interferer; the court of appeal dismissed the claims for information and damages. With the appeal admitted by the senate, the plaintiff continues to pursue its claims for information and damages.
Further course of the process:
The Federal Court of Justice - as in the proceedings concerning the internet video platform YouTube (order of 13 September 2018 - I ZR 140/15) - stayed the proceedings and referred questions to the Court of Justice of the European Union on the interpretation 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. The Court of Justice of the European Union has suspended the proceedings and referred questions to the Court of Justice of the European Union on the interpretation 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, Directive 2000/31/EC of the European Parliament and of the Council of 8 June 2000 on certain legal aspects of information society services, in particular electronic commerce, in the Internal Market and Directive 2004/48/EC of the European Parliament and of the Council of 29 April 2004 on the enforcement of intellectual property rights.
Questions from the BGH:
According to the BGH, the question arises whether the operator of a sharehosting service on which users make data with copyright-protected content publicly accessible without the consent of the rightholders commits an act of communication within the meaning of Art. 3(1) of Directive 2001/29/EC if
- the process of uploading is automatic and without prior view or control by the operator,
- the operator indicates in the terms of use that copyright-infringing content may not be posted,
- he or she earns revenue from the operation of the service,
- the service is used for legal applications but the operator is aware that a significant amount of copyright infringing content (more than 9,500 works) is also available,
- the operator does not offer a table of contents and a search function, but the unrestricted download links provided by the operator are placed by third parties in link collections on the Internet which contain information on the content of the files and enable the search for specific content,
- by structuring the remuneration it pays for downloads according to demand, it creates an incentive to upload copyright-protected content which can otherwise only be obtained by users for a fee, and
- granting the possibility to upload files anonymously increases the likelihood that users will be held accountable for copyright infringement?
The BGH further asks whether the assessment of the above question changes if copyright-infringing offers are provided via the sharehosting service to an extent of 90 to 96% of the total use.
By further questions for a preliminary ruling, the Federal Court of Justice seeks to know whether the activity of the operator of such a sharehosting service falls within the scope of Article 14(1) of Directive 2000/31/EC and whether the actual knowledge of the unlawful activity or information referred to in that provision and the awareness of the facts or circumstances from which the unlawful activity or information becomes apparent must relate to specific unlawful activities or information.
The Federal Court of Justice further asks whether it is compatible with Article 8(3) of Directive 2001/29/EC for the rightholder to be able to obtain an injunction against a service provider whose service consists in storing information entered by a user and which has been used by a user to infringe a copyright or related right only if, after a clear infringement has been pointed out, such an infringement has occurred again.
In the event that the above questions are answered in the negative, the Federal Court of Justice finally asks whether, in the circumstances described in the first question, the operator of a sharehosting service is to be regarded as an infringer within the meaning of Art. 11, first sentence, and Art. 13 of Directive 2004/48/EC and whether the obligation of such an infringer to pay damages under Art. 13(1) of Directive 2004/48/EC may be made conditional on the infringer having acted intentionally both in relation to its own infringing act and in relation to the infringing act of the third party and having known or reasonably should have known that users were using the platform for specific infringements.
The BGH suspended the other similar proceedings with the case numbers I ZR 54/17, I ZR 55/17, I ZR 56/17 and I ZR 57/17 until the decision of the Court of Justice of the European Union in the proceedings I ZR 53/17.
Decision of 20 September 2018 - I ZR 53/17 - Uploaded
Lower courts:
I ZR 53/17
LG Munich I - Judgment of 18 March 2016 - 37 O 6199/14
OLG Munich - Judgment of 2 March 2017 - 29 U 1797/16
I ZR 54/17
LG München I - Judgment of 31 March 2016 - 7 O 6201/14
OLG Munich - Judgment of 2 March 2017 - 29 U 1818/16
I ZR 55/17
LG Munich I - Judgment of 31 May 2016 - 33 O 6198/14
OLG Munich - Judgment of 2 March 2017 - 29 U 2874/16
I ZR 56/17
LG Munich I - Judgment of 10 August 2016 - 21 O 6197/14
OLG Munich - Judgment of 2 March 2017 - 29 U 3735/16
I ZR 57/17
LG München I - Judgment of 31 March 2016 - 7 O 6202/14
OLG Munich - Judgment of 2 March 2017 - 29 U 1819/16
Source: Press release of the Federal Supreme Court of 20.09.2018
GoldbergUllrich Attorneys at Law 2018
Attorney at Law Michael Ullrich, LL.M. (Information Law)
Specialist lawyer for information technology law
