A business owner who provides a WiFi network to the public free of charge is not responsible for copyright infringements by a user. However, he may be required by an order to secure his network with a password in order to stop or prevent such infringements.
Mr Tobias Mc Fadden runs a lighting and sound equipment shop where he provides a publicly accessible WiFi network free of charge in order to attract the attention of potential customers to his goods and services. In 2010, a musical work for which Sony holds the rights was unlawfully offered for download via this network. The Landgericht München I (Munich I Regional Court), which is hearing the dispute between Sony and Mr Mc Fadden, is of the opinion that Mr Mc Fadden himself did not commit the copyright infringements in question. However, it considers his indirect liability for this infringement to be conceivable, since he had not secured his WiFi network. As it has doubts as to whether the E-Commerce Directive precludes such indirect liability, it has referred a number of questions to the Court of Justice.
The Directive limits the liability of intermediaries offering mere data transmission services for an unlawful act committed by a third party. This limitation of liability applies when three cumulative conditions are met:
1. the service provider has not initiated the transfer.
2. he did not select the addressee of the transmission.
3. he did not select or modify the information transmitted.
In today's judgment, the Court finds, first, that a provider who makes a WiFi network available to the public free of charge in order to draw the attention of potential customers to the goods or services of a shop is thereby providing an 'information society service' within the meaning of the directive.
The Court further confirms that if the three conditions mentioned are fulfilled, there can be no liability of a provider who, like Mr Mc Fadden, provides access to a communications network. Therefore, the copyright holder has no claim for damages against that provider because third parties have used the WiFi network to infringe his rights. As there is no such claim for damages, the copyright holder cannot claim reimbursement of the warning costs or court costs incurred for his claim for damages.
However, it is not contrary to the Directive for the copyright holder to apply to a national authority or court for an order requiring the provider to put an end to or prevent any infringement of copyright by its customers.
Finally, the Court finds that an order requiring the provider to secure the internet connection by means of a password appears appropriate to strike a balance between, on the one hand, the rights of rightholders in their intellectual property and, on the other, the right of providers of internet access services to freedom to conduct a business and the right of internet users to freedom of information. The Court points out, in particular, that such a measure is designed to deter users of a communications network from infringing copyright. However, in order to ensure that deterrent effect, it is necessary that, in order not to be able to act anonymously, users must reveal their identity before receiving the required password.
By contrast, the Directive expressly excludes measures aimed at monitoring information transmitted through a communications network. Nor would a measure consisting in the complete disconnection of the internet connection, without considering measures less restrictive of the provider's freedom to conduct a business, be appropriate to reconcile the conflicting rights.
Judgment in Case C-484/14 Tobias Mc Fadden v Sony Music Entertainment Germany GmbH
Source: Court of Justice of the European Union, Press Release No. 99/16 of 15 September 2016
Goldberg Attorneys at Law 2016
Attorney at Law Michael Ullrich, LL.M. (Information Law)
Specialist lawyer for information technology law
E-mail: info@goldberg.de
