Source: http://copyrightblog.kluweriplaw.com/2017/06/30/cjeu-decision-ziggo-pirate-bay-communicates-works-public/
Timestamp: 2019-04-26 04:45:55+00:00

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On 14 June 2017, the CJEU handed down its highly anticipated decision in Case C-610/15, Stichting Brein v Ziggo. As was reported on this blog when the Advocate General’s Opinion was released, the case represents the first time that the liability proper (i.e. for damages, as opposed to mere injunctions) of an internet intermediary for copyright infringement has been considered at the European level.
The Court concluded that the intermediary in question – the peer-to-peer file-sharing website The Pirate Bay (TPB) – communicates works to the public. In the process, it has influenced the definition of direct copyright infringement in EU law and the range of actors which may be said to be engaging in it.
The case arose in the Netherlands, where Stichting Brein, an anti-piracy organisation, applied to the Dutch courts for an injunction against internet access providers Ziggo and XS4ALL that would order them to block access to TPB for their customers. When the case came before it, the Dutch Supreme Court noted that the permissibility of injunctions of this kind is dependent on the correct interpretation of Article 8(3) of the InfoSoc Directive. According to this provision, Member States must ensure that copyright holders are in a position to apply for an injunction against intermediaries whose services are used by third parties to infringe copyright.
The question before the court was therefore whether this activity amounts to a communication to the public and thus to copyright infringement.
The CJEU approached the issue through its now familiar formula for finding a communication to the public. According to this, the infringement of this exclusive right requires two cumulative elements: a) an ‘act of communication’ of a work and b) the communication of that work to a ‘public’.
As the Court has repeatedly stressed, in interpreting each of these, it is necessary to take into account ‘several complementary criteria, which are not autonomous and are interdependent.’ These criteria must be applied individually and in light of their interaction with one another, given that in different specific situations, they may be met to varying degrees. Consequently, an ‘individual assessment’ of the circumstances of each case will always be necessary.
As previous case law has indicated, the existence of an ‘act of communication’ will depend on whether the user has played an ‘indispensable role’ through a ‘deliberate intervention’. Specifically, the user must have intervened, in full knowledge of the consequences of her action, to give access to a protected work to persons who would not otherwise have been able to enjoy it. In light of its earlier case law, the Court concluded that any act by which a user, with full knowledge of the relevant facts, provides its clients with access to protected works is liable to constitute an ‘act of communication’.
Applying this principle to the facts of the case, the Court first noted that there was no doubt that works were, by means of TPB’s website, being made available to the public. The pertinent issue was instead who was responsible for this making available. The Court acknowledged that the work was placed on the platform not by TPB itself, but by its users. Nevertheless, the Court concluded that the management of an online sharing platform amounts to an intervention to provide access to protected works in full knowledge of the consequences. In support of this conclusion the Court mentioned that, absent TPB, it would be either impossible or more difficult for the users to share the work online. The Court also stressed that the platform indexes torrent files in such a way that the works may be easily located and downloaded and classifies the works under different categories. The platform’s operators additionally check to ensure that a work has been placed in the appropriate category, delete obsolete or faulty torrent files and actively filter some content.
With regard to the second element of ‘a public’, as in earlier case law, the Court explained that this refers to a group of people of an indeterminate number that is of a certain, not insignificant, size. It is not necessary for the relevant audience to be reached simultaneously. Instead, the cumulative effect of making works available to a large number of people in succession must be taken into account. Given that TPB is used by a considerable number of ‘peers’, in the instant case this criterion was easily met.
In line with the CJEU’s standing case law, it is additionally necessary that either this ‘public’ be a ‘new’ one, i.e. one that was not already taken into account by the copyright holder when she authorised the initial communication to the public of the work, or that the communication take place through technical means different from those which she employed. According to the Court, in this case the first of these two possibilities is established.
To achieve this result, the CJEU relied heavily on its earlier hyperlinking case law. As the Court first declared in last September’s GS Media, the internet is of particular importance to freedom of expression and information. As a result, in enforcing copyright online, ‘the right balance’ must be struck between that freedom and the interests of copyright holders. In applying this principle in that case, it was established that a hyperlinker may only be held liable for linking to copyright infringing material if she knew or ought to have known that the hyperlink provides access to a work unlawfully posted online.
The making available and management of TPB is carried out for the purpose of obtaining profit, in the form of advertising revenues.
As a result of the fulfilment of both of the two basic conditions, the Court concluded that TPB does indeed communicate works to the public. Consequently, the second question submitted by the Dutch court on whether an injunction can be ordered to block access to a website which does not itself engage in direct copyright infringement was not addressed.
Certainly, it’s hard to argue with the basic sentiments behind the decision. As the CJEU notes, the operators of The Pirate Bay clearly intend to enable copyright infringement by their end-users. Moreover, in this particular instance, they had received notification that their platform in fact enables such infringement. As a result, it seems entirely appropriate that they should be held liable.
Why the notion of ‘communication to the public’ had to be used to achieve this result is however less obvious. As the CJEU itself accepts, the infringed works were placed on TPB not by its own operators but by third parties. This would seem to indicate that it is in fact others who engage in the relevant act of communication. To mitigate the effect of the CJEU’s decision to find otherwise, the operators are only held liable on the basis of their knowledge of this unlawful third party activity. In this way, the additional mental element first introduced by the CJEU in its hyperlinking case law is now given wider applicability. The result could have implications extending far beyond the liability of TPB, to the liability of any internet intermediary whose services are used by others in the infringement of copyright. Yet, as multiple commentators have pointed out, knowledge was never a traditional condition for direct copyright infringement. Instead, copyright infringement has generally been understood to be a strict liability tort.
Why has the Court opted for this approach? The answer might be found in the AG’s Opinion, which argued that a harmonised EU answer to the problem of online infringement is necessary. This idea is far from objectionable: in the era of the internet, a comprehensively harmonised European copyright law makes much more sense than a fragmented one. But the lack of a real harmonisation of indirect liability in the directives nevertheless remains the current reality of EU copyright law. In Ziggo, the Court attempts to sidestep that reality by over-expanding the harmonised rules of direct copyright liability. In essence, this amounts to a judge-made harmonisation of indirect copyright liability through the application of the rules of primary liability, adjusted for the purpose by appeal to freedom of expression, the Charter of Fundamental Rights and the need for balance.
There is a certain ingenuity to this solution. Combined with the safe harbours of the E-Commerce Directive, the result could be a fairly robust EU harmonisation of indirect copyright liability: the directive-based safe harbours determine when liability cannot be imposed on indirect infringers and the CJEU-made expansive interpretation of the right of communication to the public determines when it can. The result is a pleasing complementarity between the E-Commerce Directive and the InfoSoc Directive.
Gaps nevertheless do remain: a safe harbour system is not the same as a harmonised substantive indirect liability regime. With this in mind, whether the approach adopted by the Court truly solves the current absence of any real harmonisation of indirect liability is worth considering. What, for example, would be the position of a hypothetical BitTorrent indexing site that, unlike TPB, could not be said to have knowledge that its services were used to infringe copyright? Under the new knowledge-based case law, it would presumably be exonerated from any accusation of communicating works to the public. This alone however would not be enough to ensure complete harmonisation. Absent a safe harbour dedicated to peer-to-peer indexers, the CJEU will have to allow Member States to deal with questions of indirect liability as they see fit. Fragmentation will therefore persist, while in the meantime damage might be done to the traditional balance between the rules of direct and indirect copyright liability in those national systems that distinguish between the two.
Another question concerns whether the exceptions and limitations of Article 5(3) of the InfoSoc Directive should now be taken to apply to indirect communicators to the public as well. The initial assumption ought to be yes, as no limitation for infringers acting with knowledge is introduced by that provision. Nevertheless, in GS Media the Court suggested (in para. 53) that that will not be the case with regard to hyperlinkers. In Ziggo, no relevant information is provided for torrent indexers. Admittedly, refusing to allow platforms that are knowingly involved in third parties’ performance of restricted acts from relying on exceptions and limitations does make sense. Nevertheless, if both direct and indirect infringers are to be found to in fact be committing the same wrongdoing, some thought will have to be given to the mechanism that will allow for this result.
In any case, given this turn of events, the obvious question arises: are we now to assume that knowledge forms a necessary condition of any finding of communication to the public? Has copyright infringement in the EU been turned into fault-based tort? For the moment at least, this remains doubtful. What is far more likely is that the CJEU will, in future, rely on the variable normative power it has assigned to the multiple interdependent criteria on which it establishes communication to the public to conclude that, in truly direct infringement cases, knowledge is not a prerequisite.
In support of this conclusion it is worth noting that, in the present case, the knowledge condition was softened considerably in comparison to the earlier hyperlinking judgments. While in GS Media the CJEU introduced a rebuttable presumption of knowledge where the hyperlinking activity is carried out for profit, in Ziggo the Court makes no mention of such a mechanism. The Court does note that TPB operates for the purpose of obtaining profit, but only as one indication among many of TPB’s knowledge of the infringements on its platform. This would seem to suggest that the kind of knowledge that is necessary to find an infringement can be calibrated depending on the circumstances of the case.
At the same time, the Court did stop short of introducing a condition of actual knowledge, as had been advised by the AG. Depending on how future cases are decided, this could prove significant. The AG made his recommendation on the realisation that an ‘ought to have known’ construction would risk conflicting with the general monitoring obligation established by the E-Commerce Directive. In its judgment, the CJEU expressed no preference either way, but instead simply limited itself to making reference to a collection of evidence that seem to indicate both actual knowledge (e.g. notification of infringement) and constructive knowledge (e.g. the large number of torrent files). It thus remains to be seen how the Court would handle an intermediary with no actual knowledge, but with a profit-making nature and a large user-base. Presumably, in such cases, the directive-based prohibition on general monitoring will take precedence over a CJEU-introduced ‘non-autonomous’ criterion. It is moreover possible that this is a problem that could simply be solved by practical realities: if a platform has a reputation for infringement, it is likely that at least one notice will have been sent by rightholders. If it is a ‘diligent economic operator’, it will probably host large amounts of non-infringing content, so that it will be harder to claim that it ‘could not have been unaware’ of the existence of infringements on its services.
In any case, as these considerations make clear, absent a principled division between the rules of direct and indirect copyright liability, the difficult issue in every case will be deciding what amount of knowledge it is appropriate to demand before liability can attach. Stating that an ‘individual assessment’ of the circumstances of each case is always necessary is all very well, but it does not lend itself to great legal certainty.
It should be noted that the above concerns are all the more valid given that, in the present case, no real need to find that The Pirate Bay was itself communicating works to the public was necessary to enable the injunctions against Ziggo and XS4ALL that were, at the end of the day, the actual contested issue. As has earlier been argued, the wording of Article 8(3) of the InfoSoc Directive leaves plenty of room for injunctions against ISPs that require them to block websites used by third parties to infringe copyright. To the extent that the interests of the website itself must be taken into account, the CJEU’s traditional ‘fair balance’ approach could have been easily tweaked to reflect that.
This being said, the timing of the judgment might prove opportune. It is possible that the solution opted for by the Court can pre-empt the discussions currently unfolding on the liability of host service providers in the context of EU copyright reform. In Recital 38 of the Commission’s new copyright proposal it is suggested that providers that host third party infringements in a public manner by definition go beyond the mere provision of physical facilities and perform acts of communication to the public. If that were the case, the only way for such providers to avoid liability would be to abide by the conditions of Article 14 of the E-Commerce Directive. The Recital then suggests that this provision will not apply where the provider ‘plays an active role, including by optimising the presentation of the uploaded works or subject-matter or promoting them, irrespective of the nature of the means used therefor’.
There are many problems with this interpretation both as concerns EU copyright law and the safe harbour. The Court’s new approach might however put it to rest. A consistent application of the new mental element to hosting services would mean that, arguably, unless such providers have knowledge of an infringement performed using their services, they cannot be said to have communicated works to the public in the first place. If that is the case, the expansive interpretation of an ‘active role’ advocated by the Commission would have no effect on their liability, unless they can be shown to be secondary infringers under national norms.

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