Detail

German Federal Court of Justice ruled on the liability of the subscriber for

31.07.2018 |

The First Civil Senate of the Federal Court of Justice, which is responsible among other things for copyright, has ruled that the operator of Internet access via WLAN and a Tor-Exit-Nodes according to the new version of Sec. 8 Paragraph 1 Sentence 2 of the German Telemedia Act (TMG) (in force since 13 October 2017) is not liable for copyright infringements committed by third parties via its Internet connection by way of filesharing. However, a blocking ruling by the right holder pursuant to Sec. 7 para. 4 TMG nF may be considered.

Facts:

The plaintiff is the owner of the exclusive rights to use the computer game "Dead Island". The defendant has an Internet connection. On January 6, 2013, the "Dead Island" program was offered for download via the defendant's Internet connection in an Internet filesharing service. In March 2013, the plaintiff issued a warning to the defendant and asked him to submit a cease-and-desist declaration with criminal prosecution. Previously, the plaintiff had twice issued legal warnings to the defendant for filesharing copyright infringements committed via his Internet connection in 2011 relating to other works.

The defendant has claimed not to have committed any infringement himself. He operates five publicly accessible WLAN hotspots under his IP address and two incoming channels from the Tor network ("Tor exit nodes").

Previous process:

The plaintiff is suing the defendant for injunctive relief and reimbursement of warning costs. The Regional Court has upheld his claim. The Court of Appeal rejected the defendant's appeal with the proviso that the defendant is ordered, under threat of order, to prevent third parties from making the computer game or parts thereof available to the public via his Internet connection via an Internet exchange.

Federal Court of Justice’s decision:

Following the appeal of the defendant, the Federal Court of Justice overturned the judgment of the Higher Regional Court with regard to the sentence of injunction and referred the case back to the Higher Regional Court for a new hearing and decision in this respect. Moreover, the Federal Court of Justice has rejected the appeal directed against the award of fees for the cease-and-desist letter.

The Federal Court of Justice has ruled that the defendant is obliged to reimburse the warning costs in accordance with the relevant law applicable at the time of the warning, because he is liable for the infringement of the rights of third parties. The defendant has negligently failed to secure his WLAN against misuse by third parties by using the current encryption standard at the time of purchase and an individual password. In the case of private provision by the defendant, this obligation existed without further ado as soon as 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 already been informed that copyright infringements had been committed through filesharing via his Internet connection in 2011. Acceptance of liability for interference does not preclude the fact that the work named in the notice is not identical to the work affected by the new infringement. The conditions for liability are also present if the violation of rights occurred via the Tor-Exit-Node operated by the defendant. The defendant has neglected to counteract the known danger of copyright infringements through filesharing by means of technical precautions. According to the findings of the Higher Regional Court, which are in accordance with the law of appeal, the blocking of filesharing software is technically possible and reasonable for the defendant.

The Federal Court of Justice overturned the condemnation for injunction because according to the new version of Section 8 (1) sentence 2 TMG in force since 13 October 2017, the intermediary of Internet access cannot be held liable for damages, removal or omission of an infringement due to an unlawful act on the part of a user. If an act is no longer unlawful at the time of the appeal decision, an injunctive relief cannot be granted.

There are no major objections to the application of Section 8 para. 1 sentence 2 TMG nF under EU law. Although Article 8(3) of Directive 2001/29/EC and the third sentence of Article 11 of Directive 2004/48/EC oblige Member States to provide for the possibility, in favour of rightholders, of issuing court orders against intermediaries whose services are used by a third party to infringe a copyright or related rights. Although the German legislature has excluded the liability of the access provider for injunctive relief in Sec. 8 para. 1 sentence 2 TMG nF, at the same time Sec. 7 para. 4 TMG nF provides a claim against the operator of an Internet access via WLAN aimed at blocking access to information. This provision must be further developed in accordance with the guidelines so that the blocking ruling can also be asserted against providers of wired Internet access. The right to blocking measures is not limited to certain blocking measures and may also include the obligation to register users, to encrypt access with a password or - in the worst case - to completely block access.

To examine the question as to whether the plaintiff has a claim against the defendant for the blocking of information pursuant to Sec. 7 para. 4 TMG nF, the Federal Court of Justice referred the case back to the Higher Regional Court.

Lower instances:

LG Düsseldorf - Judgment of 13 January 2016 - 12 O 101/15

OLG Düsseldorf - Judgment of 16 March 2017 - I-20 U 17/16

Relevant provisions:

Section 8 (1) TMG nF

Service providers are not responsible for external information which they transmit in a communication network or to which they provide access for use, provided that they

1. does not cause the transmission,

2. did not select the addressee of the information transmitted, and

3. have not selected or changed the information provided.

If these service providers are not responsible, they cannot be held liable for any unlawful action by a user for damages or removal or omission of an infringement; the same applies to all costs for the assertion and enforcement of these claims. Sentences 1 and 2 shall not apply if the service provider intentionally cooperates with a user of its service in order to commit unlawful acts.

The Federal Court of Justice overturned the injunction because according to the new version of Section 8 (1) sentence 2 TMG in force since 13 October 2017, the intermediary of Internet access cannot be held liable for damages, removal or omission of an infringement due to an unlawful act on the part of a user. If an act is no longer unlawful at the time of the appeal decision, an injunctive relief cannot be granted.

There are no major objections to the application of Section 8 para. 1 sentence 2 TMG nF under EU law. Although Article 8(3) of Directive 2001/29/EC and the third sentence of Article 11 of Directive 2004/48/EC oblige Member States to provide for the possibility, in favour of right holders, of issuing court orders against intermediaries whose services are used by a third party to infringe a copyright or related rights. Although the German legislature has excluded the liability of the access intermediary for injunctive relief in Sec. 8 para. 1 sentence 2 TMG nF, at the same time Sec. 7 para. 4 TMG nF provides for a claim against the operator of an Internet access via WLAN aimed at blocking access to information. This provision must be further developed in accordance with the guidelines so that the blocking ruling can also be asserted against providers of wired Internet access. The right to blocking measures is not limited to certain blocking measures and may also include the obligation to register users, to encrypt access with a password or - in the worst case - to completely block access.

To examine the question as to whether the plaintiff has a claim against the defendant for the blocking of information pursuant to Sec. 7 para. 4 TMG nF, the Federal Court of Justice referred the case back to the Higher Regional Court.

Comment:

The Federal Court of Justice handed down a valuable judgement for the framework of liability in filesharing involving several subjects (individuals/legal persons) and their doings. It is now clearly stated that owner of an Internet access have to provide security measures for their access in order not to allow third parties to infringe other rights via their access.

The provisions relevant for the decision-making are as follows:

Section 8 (1) TMG nF

Service providers are not responsible for external information which they transmit in a communication network or to which they provide access for use, provided that they

1. does not cause the transmission,

2. did not select the addressee of the information transmitted, and

3. have not selected or changed the information provided.

If these service providers are not responsible, they cannot be held liable for any unlawful action by a user for damages or removal or omission of an infringement; the same applies to all costs for the assertion and enforcement of these claims. Sentences 1 and 2 shall not apply if the service provider intentionally cooperates with a user of its service in order to commit unlawful acts.

Section 7 (4) TMG nF

If a telemedia service has been used by a user to infringe another user's intellectual property right and there is no other way for the owner of this right to remedy the infringement of his right, the owner of the right may request the service provider concerned to block the use of information in accordance with Sec. 8 paragraph 3 in order to prevent the repetition of the infringement. The blocking must be reasonable and proportionate. A claim against the service provider for reimbursement of the pre-judicial and extrajudicial costs for asserting and asserting the claim pursuant to sentence 1 does not exist except in the cases of Sec. 8 paragraph 1 sentence 3.

Article 8(3) of Directive 2001/29/EC on the harmonization of certain aspects of copyright and related rights in the information society

Member States shall ensure that right holders may apply for court orders against intermediaries whose services are used by a third party to infringe a copyright or related right.

Article 11 of Directive 2004/48/EC on the enforcement of intellectual property rights

Member States shall ensure that, where an infringement of an intellectual property right is established, the competent courts may issue an order against the infringer prohibiting him from continuing to infringe that right. Where the law of a Member State so provides, fines shall be imposed in appropriate cases in the event of non-compliance with this order in order to ensure compliance with the order. Without prejudice to Article 8(3) of Directive 2001/29/EC, Member States shall also ensure that right holders may apply for an order against intermediaries whose services are used by a third party in order to infringe an intellectual property right.

Sebastian M. Ober, LL.M.

 



© 2019 HEINRICH PARTNER RECHTSANWÄLTE