The First Civil Senate of the Federal Court of Justice, which is responsible, among other things, for copyright law, has referred questions to the Court of Justice of the European Union concerning the liability of operators of online share-hosting services for copyright-infringing content uploaded by third parties.
Facts of the case:
The defendant operates the online share-hosting service 'uploaded'. This service offers free storage space to anyone for uploading files of any content. For each uploaded file, the defendant automatically generates an electronic reference (download link) to the file's storage location and automatically communicates this to the user. The defendant provides neither a directory nor a corresponding search function for the files stored on its service. However, users can post the download links in so-called link collections on the internet. These are offered by third parties and contain information about 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, the quantity and speed are limited for unregistered 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. Furthermore, the defendant pays download remunerations to users who upload files, specifically up to €40 for 1,000 downloads.
The defendant's service is used for both legal applications and for those that infringe third-party copyrights. In the past, the defendant had already received numerous notifications regarding the availability of infringing content from service providers acting on behalf of rights 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 specialized publisher, considers it an infringement of its copyrights that files to which it holds exclusive rights of use are accessible on the defendant's servers via external link collections. She primarily sought an injunction against the defendant as the perpetrator, alternatively as an accomplice, and further alternatively as a disturber of a copyright infringement, as well as disclosure of information, and requested a declaration of its liability for damages.
The appellate court ordered the defendant (only) as a disturber to cease and desist; the appellate court dismissed the applications for disclosure of information and a declaration of liability for damages. With the appeal on points of law admitted by the Senate, the plaintiff continues to pursue her claims for disclosure of information and a declaration of liability for damages.
Further Course of Proceedings:
The Federal Court of Justice – as in the proceedings concerning the internet video platform YouTube (Decision of September 13, 2018 – I ZR 140/15) – suspended the proceedings and referred questions to the Court of Justice of the European Union concerning the interpretation of Directive 2001/29/EC of the European Parliament and of the Council of May 22, 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 June 8, 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 April 29, 2004, on the enforcement of intellectual property rights.
Questions from the Federal Court of Justice:
According to the BGH, the question arises whether the operator of a share-hosting service, on which users make data with copyrighted content publicly accessible without the consent of the rights holders, performs an act of communication to the public within the meaning of Art. 3 para. 1 of Directive 2001/29/EC, if
– the uploading process occurs automatically and without prior review or control by the operator,
– the operator indicates in the terms of use that copyright-infringing content must not be uploaded,
– he generates revenue from operating the service,
– the service is used for legal applications, but the operator is aware that a significant number of copyright-infringing contents (more than 9,500 works) are also available,
– the operator does not offer a table of contents or a search function, but the unlimited download links provided by him are posted by third parties in link collections on the internet, which contain information about the content of the files and enable searching for specific content,
– he creates an incentive through the design of the demand-dependent remuneration paid by him for downloads to upload copyrighted content, which would otherwise only be available to users for a fee, and
– by granting the possibility to upload files anonymously, the likelihood is increased that users will be held accountable for copyright infringements?
The BGH further asks whether the assessment of the preceding question changes if copyright-infringing content is provided via the share-hosting service to an extent of 90 to 96% of the total usage.
With further preliminary questions, the Federal Court of Justice wants to know whether the activity of the operator of such a share-hosting service falls within the scope of Art. 14 para. 1 of Directive 2000/31/EC and whether the actual knowledge of the unlawful activity or information and the awareness of facts or circumstances from which the unlawful activity or information is apparent, as referred to in this provision, must relate to specific unlawful activities or information.
Furthermore, the Federal Court of Justice asks whether it is compatible with Art. 8 para. 3 of Directive 2001/29/EC if the rights holder can only obtain a judicial injunction against a service provider whose service consists of storing information entered by a user and has been used by a user to infringe a copyright or related right, if, after a notification of a clear infringement, such an infringement has occurred again.
Should the aforementioned questions be answered in the negative, the Federal Court of Justice finally asks whether the operator of a share-hosting service, under the circumstances described in the first question, is to be regarded as an infringer within the meaning of Art. 11 sentence 1 and Art. 13 of Directive 2004/48/EC, and whether the obligation of such an infringer to pay damages under Art. 13 para. 1 of Directive 2004/48/EC may be made dependent on the infringer having acted intentionally with regard to both his own infringing act and the infringing act of the third party, and having known or reasonably ought to have known that users exploit the platform for specific infringements.
The BGH has suspended the further, similarly structured proceedings with file 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 case I ZR 53/17.
Decision of September 20, 2018 – I ZR 53/17 – Uploaded
Lower Courts:
I ZR 53/17
Munich I Regional Court – Judgment of March 18, 2016 – 37 O 6199/14
Munich Higher Regional Court – Judgment of March 2, 2017 – 29 U 1797/16
I ZR 54/17
Munich I Regional Court – Judgment of March 31, 2016 – 7 O 6201/14
Munich Higher Regional Court – Judgment of March 2, 2017 – 29 U 1818/16
I ZR 55/17
Munich I Regional Court – Judgment of May 31, 2016 – 33 O 6198/14
Munich Higher Regional Court – Judgment of March 2, 2017 – 29 U 2874/16
I ZR 56/17
Munich I Regional Court – Judgment of august 10, 2016 – 21 O 6197/14
Higher Regional Court of Munich – Judgment of March 2, 2017 – 29 U 3735/16
I ZR 57/17
Regional Court of Munich I – Judgment of March 31, 2016 – 7 O 6202/14
Higher Regional Court of Munich – Judgment of March 2, 2017 – 29 U 1819/16
Source: Press release of the Federal Court of Justice dated 20.09.2018
GoldbergUllrich Attorneys at Law 2018
Attorney Michael Ullrich, LL.M. (Information Law)
Specialist Lawyer for Information Technology Law
