Judgment of the Federal Court of Justice of July 26, 2018 – I ZR 64/17 – Dead Island
The First Civil Senate of the Federal Court of Justice, responsible inter alia for copyright law, has ruled that, according to the revised version of § 8 para. 1 sentence 2 of the Telemedia Act (TMG), effective since October 13, 2017, the operator of a WLAN internet access and a Tor exit node is not liable as an infringer for copyright infringements committed by third parties via their internet connection through filesharing for injunctive relief. However, a blocking claim by the rights holder under the new § 7 para. 4 TMG may be considered.
Facts of the case:
The plaintiff holds the exclusive exploitation rights to the computer game 'Dead Island'. The defendant maintains an internet connection. On January 6, 2013, the program 'Dead Island' was offered for download via the defendant's internet connection on an internet file-sharing platform. The plaintiff issued a warning to the defendant in March 2013, demanding a cease and desist declaration with a penalty clause. Previously, the plaintiff had twice issued legal warnings to the defendant concerning copyright infringements related to other works committed via his internet connection through filesharing in 2011.
The defendant asserted that he himself had not committed any infringement. He operates five publicly accessible WLAN hotspots under his IP address and two wired incoming channels from the Tor network ('Tor exit nodes').
Previous course of proceedings:
The plaintiff is suing the defendant for injunctive relief and reimbursement of cease and desist costs. The District Court granted the claim. The Higher Regional Court dismissed the defendant's appeal, with the proviso that the defendant is ordered, under threat of coercive measures, to prevent third parties from making the computer game or parts thereof available to the public via his internet connection through an internet file-sharing platform.
Decision of the Federal Court of Justice:
The Federal Court of Justice, upon the defendant's appeal on points of law, overturned the Higher Regional Court's judgment regarding the order for injunctive relief and remitted the case to the Higher Regional Court for a new hearing and decision on that matter. The Federal Court of Justice dismissed the appeal on points of law directed against the award of the claim for cease and desist costs.
The Federal Court of Justice ruled that the defendant is obliged to reimburse the cease and desist costs under the applicable law at the time of the warning, because he is liable as a contributor to the infringement by third parties. The defendant unlawfully failed to secure his WLAN by using the encryption standard current at the time of purchase and an individual password against misuse by third parties. In the case of private provision by the defendant, this obligation existed without further ado from the moment the connection was put into operation. If the defendant provided internet access via WLAN commercially, he was obliged to take these security measures because he had previously been notified that copyright infringements had been committed via his internet connection through filesharing in 2011. The assumption of contributory liability is not precluded by the fact that the work named in the notification is not identical to the work affected by the renewed infringement. The liability requirements are also met if the infringement occurred via the Tor exit node operated by the defendant. The defendant unlawfully failed to counteract the known risk of copyright infringements through filesharing by means of technical precautions. According to the Higher Regional Court's findings, which are unassailable under appellate law, the blocking of filesharing software is technically possible and reasonable for the defendant.
The Federal Court of Justice overturned the order for injunctive relief because, according to the revised version of § 8 para. 1 sentence 2 TMG, effective since October 13, 2017, an intermediary of internet access cannot be held liable for damages, removal, or injunctive relief for an infringement committed by a user. If an act is no longer unlawful at the time of the appellate decision, the award of an injunction claim is not possible.
There are no serious EU law concerns regarding the application of the new § 8 para. 1 sentence 2 TMG. Although Member States are obliged, pursuant to Art. 8 para. 3 of Directive 2001/29/EC and Art. 11 sentence 3 of Directive 2004/48/EC, to provide for the possibility of judicial injunctions against intermediaries whose services are used by a third party to infringe a copyright or related rights, the German legislator has excluded the access intermediary's liability for injunction in the new § 8 para. 1 sentence 2 TMG. However, it has simultaneously provided for a claim against the operator of WLAN internet access for blocking access to information in the new § 7 para. 4 TMG. This provision is to be developed in conformity with the directive such that the blocking claim can also be asserted against providers of wired internet access. The claim for blocking measures is not limited to specific blocking measures and can also include the obligation to register users, to encrypt access with a password, or – in extreme cases – to completely block access.
To examine the question of whether the plaintiff is entitled to a claim against the defendant for blocking information pursuant to the new § 7 para. 4 TMG, the Federal Court of Justice remitted the case to the Higher Regional Court.
Lower Courts:
Düsseldorf District Court – Judgment of January 13, 2016 – 12 O 101/15
Düsseldorf Higher Regional Court – Judgment of March 16, 2017 – I-20 U 17/16
Source: Press release of the Federal Court of Justice dated 26.07.2018
GoldbergUllrich Attorneys at Law 2018
