File-hosting services are obligated to conduct comprehensive regular monitoring of link collections that refer to their services if their business model significantly facilitates copyright infringements. This was decided by the First Civil Senate of the Federal Court of Justice (BGH), which is responsible, among other things, for copyright law, in a judgment dated august 15, 2013, the grounds for which have now been published.
The plaintiff is GEMA, which, as a collecting society, manages the exploitation rights of music authors (composers and lyricists). The defendant operates a file-hosting service; it provides storage space on the internet at the internet address www.rapidshare.com. Users of the service can upload their own files to the defendant's website, which are then stored on its servers. A link is provided to the user, with which the stored file can be accessed. The defendant neither knows the content of the uploaded files nor maintains a directory of the files. However, special search engines (so-called 'link collections') allow searching for specific files on the defendant's servers.
The plaintiff asserts that 4,815 specifically designated musical works were made publicly accessible via the defendant's service without her consent and could be downloaded there. The plaintiff considers this a copyright infringement and demands that the defendant cease and desist.
The action was successful in both lower instances. The Federal Court of Justice rejected the defendant's appeal. Insofar as the appellate court had also ordered a member of the supervisory board and a former managing director of the defendant to cease and desist, the Federal Court of Justice overturned the appellate judgment due to a lack of findings regarding the responsibility of these individuals for the copyright infringements.
The Federal Court of Justice (BGH) had already ruled last year that file-hosting services are liable as disturbers for injunctive relief for copyright infringements by their users if, after being notified of a clear copyright infringement, they fail to comply with their incumbent inspection duties, leading to further similar infringements (Judgment of July 12, 2012 – I ZR 18/11, BGHZ 194, 339 – Alone in the Dark; see press release of July 13, 2012, No. 114/2012). When specifying these inspection duties, it must be assumed that the defendant's business model is not inherently designed for infringements, as there are numerous legal and common uses for its service. In the present case, however, the appellate court found that the defendant promoted the risk of copyright-infringing use of its service through its own measures. From this, the Federal Court of Justice derived an aggravated liability for the defendant compared to the “Alone in the Dark” decision (BGHZ 194, 339 para. 25 et seq.).
Unlike other services, for example in the area of “cloud computing,” the defendant does not charge a fee for providing storage space. It generates its revenue solely through the sale of so-called premium accounts. The associated convenience features lead to the defendant increasing its revenue precisely through mass downloads, for which files with protected content available for unlawful download are particularly attractive. This attractiveness for illegal uses is heightened by the possibility of using the defendant's service anonymously. The defendant itself assumes an abuse rate of 5 to 6%, which, with a daily upload volume of 500,000 files, corresponds to approximately 30,000 copyright-infringing acts of use.
When determining the scope of inspection duties, it must be considered that the defendant promotes the risk of infringing use of its service through its own measures. If the defendant has been notified of specific copyright infringements by its users regarding certain works, it is therefore not only obligated to immediately block the specific offer; it must also continuously monitor all relevant link collections to determine whether they contain links to files with the corresponding musical works stored on the defendant's servers. The defendant must ascertain, via general search engines such as Google, Facebook, or Twitter, using appropriate search queries and, if necessary, also employing so-called web crawlers, whether indications of further infringing links to its service are found for the works to be specifically reviewed. These inspection duties apply to the same extent for each work for which the defendant has been notified of a clear infringement. The inspection duties are not diminished by the fact that the defendant has been notified of a large number of infringements – in the present case, the infringement of rights to more than 4,800 musical works. This is because copyright protection must not be weakened by the occurrence of a large number of infringements within the framework of an otherwise permissible business model.
The Federal Court of Justice also rendered corresponding decisions in two parallel proceedings on the same day. In case I ZR 79/12, the publishers de Gruyter and Campus had opposed the fact that, despite corresponding notices, books from their publishing house could still be downloaded from the defendant. In case I ZR 85/12, Senator Filmverleih had objected to the fact that, despite a notice, the film “The Reader” could be downloaded via the defendant's service on RapidShare.
BGH Judgment of august 15, 2013 – I ZR 80/12 – File-Hosting Service
Lower Courts:
Higher Regional Court of Hamburg – Judgment of March 14, 2012 – 5 U 87/09, MMR 2012, 393
Regional Court of Hamburg – Judgment of June 12, 2009 – 310 O 93/08, ZUM 2009, 863
Source: Press release of the Federal Court of Justice
Goldberg Attorneys at Law 2013
Attorney Michael Ullrich, LL.M. (Information Law)
Specialist Attorney for Information Technology Law
Email: info@goldberg.de
