Locked Out - Providers of WiFi Access Not Liable for Copyright Infringement, Says CJEU

As wireless internet connections have become near ubiquitous in our daily lives amongst the cafés, libraries or businesses we visit, so has our appreciation for the facility, especially when traveling when a weary traveler might not have a connection on their smartphone. But underneath these open networks lurks the danger, and question, of possible abuse, and thus liability for those who operate the networks. This matter has been litigated in the European courts for some time now, and after an Advocate General's opinion early this year (discussed more here), many IP specialists have been waiting for the decision in McFadden; something the CJEU finally handed down late last week.

The case of Tobias Mc Fadden v Sony Music Entertainment Germany GmbH dealt with the provision of an unprotected wireless network connection by Mr Mc Fadden at his business selling and leasing lighting and sound systems, which aimed to bring in business and interest for his endeavor.  In late 2010 a song was shared in his network by a third-party (the rights to which Sony Music owned), and Sony subsequently sent Mr Mc Fadden a notice to this effect. Mr Mc Fadden then took the matter to court, seeking a negative declaration of infringement, to which Sony counterclaimed infringement. The matter ultimately ended up in the CJEU, who sought to take on the matter of liability of infringement for the provider of an unprotected wireless network.

The referring court asked eight questions of the CJEU, who took each question in turn to answer the matter.

The first question dealt with whether the provision of an open WiFi connection could fall under Article 12(1) of the E-Commerce Directive, i.e. whether the service would be classed as an 'information society service'. The Court quickly saw that, even in the light of a lack of remuneration (as required by EU legislation in this instance), the service would be classed as an 'information society service' under the Directive if "...the activity is performed by the service provider in question for the purposes of advertising the goods sold or services supplied by that service provider". The provision of the service is clearly therefore equated to one producing a monetary gain, even if not charged for on the outset, possibly therefore being afforded safe harbor protection as a 'mere conduit'.

The CJEU then moved onto questions two and three, which they summarized together as asking whether Article 12(1) of the Directive only requires the provision of the aforementioned service so as to be included, or if further conditions have to be met for it to be deemed as have been provided under the Article. This would include a contractual relationship and the advertisement of the provider's services. The Court concluded that, for the service to have been provided under the provision, the access must not "...go beyond the boundaries of a technical, automatic and passive process for the transmission of the required information, there being no further conditions to be satisfied". This follows recital 43 to the tee, and clearly the mere passive provision of such a service would be deemed to have been 'provided' by virtue of doing only that.

Password required? Not interested!

The Court then answered the remaining questions in a non-sequential fashion, tackling question six first. This asks whether Article 12(1) should be interpreted as including a further condition set out in Article 14(1)(b) (on the removal of infringing content upon notification thereof). The CJEU saw that, as the Articles dealt with very different services (communication services v hosting), the condition does not apply to the provision of more transient services, but to ones that remain more permanent in the provided services (meaning, content hosted on a website stays on said website till removed, unlike in mere transient communication using a wireless connection).

This was followed by questions seven and eight, which the CJEU clumped together, summarizing them as asking whether Article 12(1) includes any further provisions in addition to the one within the Article, which are not expressly mentioned. The Court quickly dismissed this assertion, as further conditions would clearly impede the balance sought by the legislature in the introduction of the provision.

The Court then moved onto question four, which, in essence, asked whether a person (or entity) harmed through the infringement of a right could seek injunctive relief and/or possible costs for the harm caused using the above service to do so. If read in seclusion, the Article does preclude a person harmed from seeking such remedies; however, it does not expressly prevent them from doing so using national authorities to prevent the infringement from continuing. This would seem correct, as Article 12(3) expressly does not preclude national authorities from requiring such actions and/or allowing for the retrieval of costs.

Finally, questions five, nine and ten remained, which asked effectively whether the granting of an injunction such as the above is allowed (and complied with by the provider), when the provider is required to secure their connection through either a password or by monitoring the connection used. The Court emphasized the need to strike a balance between the rights afforded by the Directive and the Enforcement Directive 2004/48, especially when multiple rights are engaged in such an issue (as is the case here). The Court considered the different ways in which IP rights could be protected, and decided that "...a measure intended to secure an internet connection by means of a password must be considered to be necessary in order to ensure the effective protection of the fundamental right to protection of intellectual property". This measure would, according to the Court, protect both rights in intellectual property, as well as the freedom to conduct business through the supply on a wireless connection and the right to information in using the above. One has to, though, provide their details in order to be able to use the connection and therefore be identified if needed.

The CJEU's decision sets out a practical approach to protecting both interests, while not overly restricting the provision of wireless connections. The striking of this balance was key, and the CJEU seem to have settled on the right answer. The measures required are by no means excessive, and afford the provider plenty of protection in the event of the connection's abuse.

Links Galore - Hyperlinking Faces Its Third Challenge

After the Svensson and BestWater decisions hyperlinking seemed to already be a matter, which has been dealt with extensively and thoroughly. Even so, a third decision loomed in the horizon, hopefully shedding the final bit of light needed into the question of hyperlinking and copyright infringement. After the Svensson decision the questions posed to the Court were reduced to all but one, leaving more significance to that final question and its potential impact on the issue.

The case in question was C More Entertainment AB v Linus Sandberg, which dealt with the broadcasting of ice hockey games, which were supplied by C More for a nominal fee for those wishing to view the games live online as opposed to on TV. Linus Sandberg created links on a website to allow access to two ice hockey games without having to pay C More for the pleasure of doing so, allowing for users to watch paid-for content beyond their paywall protection; however C More quickly put a stop to this, and Mr. Sandberg only was able to post links to two games. He was also taken to court in Sweden over copyright infringement.

As said above only one question was referred to the ECJ: "May the Member States give wider protection to the exclusive right of authors by enabling “communication to the public” to cover a greater range of acts than provided for in Article 3(2) of [Directive 2001/29]?" The question, prima facie at least, clearly requires guidance on whether Member States can extend the coverage of what constitutes a 'communication to the public' beyond what is expressly provided in the Directive, namely the posting on hyperlinks to paid-for content such as hockey games.

In light of the Directive (namely Article 3) and its Preamble, the Court swiftly determined that Member States' rights in extending coverage could potentially cover the posting of hyperlinks to live, paid-for content. This, however, only applies to on-demand services, which the above service is not, as live broadcasts are not watched by individuals at a time that is convenient to them, but rather, at a strict prescribed time. The Court dismissed its applicability to the current situation, at least in light of Article 3, deeming Mr. Sandberg's actions not an infringement of the right of communication to the public via his hyperlinks.

Hyperlinks can be enticing...

With this in mind, the Court did not oust the possibility that Member States could extend the coverage of the provision beyond what has been expressly set out in the Directive. The aim of the Directive is to harmonize copyright within the EU, but does not, as was seen by the Court, "...prevent or remove any differences between the national legislations as regards the extent of the protection which the Member States may grant to the holders of the rights referred to in Article 3[] with regard to certain acts, such as those at issue in the main proceedings, which are not expressly referred to in that provision".

Following their argument the Court saw that under Directive 2006/115 Member States had the ability to give more far-reaching protection in relation to copyright when it comes to broadcasts and communication to the public. Article 8 even includes content, which is restricted by payment, as well as wireless communication of such content, for example via the Internet.

The Court then summarized its judgment on the matter: "It follows that Article 3(2) of Directive 2001/29 must be interpreted as not affecting the option open to the Member States, set out in Article 8(3) of Directive 2006/115, read in conjunction with recital 16 to that directive to grant broadcasting organisations the exclusive right to authorise or prohibit acts of communication to the public of their transmissions provided that such protection does not undermine that of copyright... Having regard to all the foregoing considerations, the answer to the question referred is that Article 3(2) of Directive 2001/29 must be interpreted as not precluding national legislation extending the exclusive right of the broadcasting organisations referred to in Article 3(2)(d) as regards acts of communication to the public which broadcasts of sporting fixtures made live on internet, such as those at issue in the main proceedings, may constitute, provided that such an extension does not undermine the protection of copyright".

While the decision is by no means as influential, at least in this writer's opinion, as Svensson or BestWater, to an extent, it still sets a potentially influential precedent should Member States wish to enact more wider coverage in relation to the communication to the public right. It does still leave the question of hyperlinking in more doubt, as links to newspaper articles have been deemed to infringe copyright, when links to live broadcasts would not. What happens now after the myriad of hyperlinking decisions in Member States remains to be seen; however the law is begging for more correction in terms of national application.

Source: IPKat