Time To Hit Pause: Copyright Infringement On User Generated Platforms – When Is The Platform Provider Liable For Damages?

Author:Ms Kristina Ehle and Stephan Kress
Profession:Morrison & Foerster LLP
 
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Content uploaded on to the Internet by users (e.g., music, videos, literature, photos, streaming of live events such as gaming and concerts - so-called "user-generated content") has spawned a series of legal cases in Europe. In 2019, decisions of the European Court of Justice (CJEU) are expected to clarify one of the key open issues in EU copyright law: the extent to which online platforms such as YouTube can be liable for copyright infringement caused by user-generated content. The CJEU decisions are eagerly awaited by both media and copyright owners and by online platform operators - and will mark yet another stage in the on-going battle of the creative industries against copyright infringements in the online world.

SUMMARY

In September 2018, the German Federal Court of Justice (Bundesgerichtshof, BGH) suspended proceedings in a widely-publicized case concerning YouTube's liability for copyright infringing user-uploaded content and referred a series of questions regarding the interpretation of several EU copyright provisions to the CJEU for a preliminary ruling. A few days later, the BGH also suspended proceedings in five other high-profile cases concerning the liability of the file hosting service uploaded.net for user files containing copyright infringing content and submitted the same questions again to the CJEU.

Previous rulings by the CJEU have addressed both the application of the safe harbor principle set out in the EU E-Commerce Directive1 that shields hosting providers from liability for hosted unlawful third-party content2 of which they have no actual knowledge and, separately, the extent of infringement of copyright by hosting of, or linking to, copyright infringing third-party content under the EU Copyright Directive3,4. But it is still unclear under which conditions the providers of the various online platforms that store and make available user-generated content, can rely on the safe harbor privilege applying to hosting providers to avoid liability, or whether they must not only take down the infringing content when they obtain knowledge of such content but also compensate the rightsholders of such content for damages for copyright infringement.

The questions that the BGH submitted to the CJEU aim to clarify these uncertainties by bringing together the different requirements established by the previous CJEU rulings for (i) affirming a direct copyright infringement by the online platform providers under the EU Copyright Directive and (ii) denying the application of the safe harbor privilege as well as the legal consequences of such a denial (such as the extent of liability for damages). The CJEU will have to consider the differences between the YouTube and uploaded.net business models. The CJEU will hopefully provide much clearer guidelines on key issues such as:

to what extent can providers of online services engage with the user content hosted by them; which activities will trigger a liability for copyright infringement irrespective of actual knowledge of a specific infringement; whether they must actively monitor the content uploaded by users for copyright infringements (e.g., by using state-of-the-art efficient filter technologies) to avoid damage claims by rightsholders. In addition, we expect these cases to have an effect on the interpretation of the new Art. 13 of the revision of the EU Copyright Directive that will likely be adopted by the EU legislative institutions in the second quarter of 2019. The current trilogue negotiations among the EU institutions indicate that, under such new Art.13, providers of online content sharing services will be directly liable for copyright infringements by content uploaded to the platform by their users and will not be granted safe harbor under the EU E-Commerce Directive.5 The providers would then have to ensure that content for which the providers have not obtained a license from the respective rightsholders for use on their platforms cannot be displayed on their platform. This means that the providers would have to monitor all content files when uploaded to their platform, making filter technology mandatory for the majority of the platforms (see our previous MoFo Tech Blog on the draft amendment to the EU Copyright Directive).

BACKGROUND

YouTube: The plaintiff Frank Peterson, a German music producer, has an exclusive artist contract with the singer Sarah Brightman, under which he holds various exclusive rights under copyright to her recordings. Several videos were uploaded to YouTube by unknown users containing works of her newly released studio album "A Winter Symphony" as well as recordings of her concert tour "Symphony Tour". On Peterson's demand, YouTube blocked some of the videos which then were re-published on YouTube by users a few days later. As a result, Peterson sued YouTube seeking injunctive relief and claiming disclosure of user information as well as compensation of damages resulting from the copyright infringement. The Hanseatic Higher Regional Court (court of appeal) granted injunctive relief obliging YouTube to take down and to prevent the re-publication of the videos on its platform and requested YouTube to provide Peterson with information on the users who had uploaded the videos under pseudonyms. The damages claim, however, was dismissed. In line with previous decisions of this and other German courts of appeal on YouTube, the court decided that YouTube is not directly liable for copyright infringement because YouTube neither committed the...

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