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Sunday, 14 June 2015
How to calculate damages in filesharing cases?
Ehm ... not everybody may agree
This question has proved
fairly controversial to address in a number of different jurisdictions. Via
1709 Blog friend Mirko Brüß (Rasch Rechtsanwälte) comes however the news that some guidance in this respect has been
recently provided by the
Bundesgerichtshof (BGH, the German Federal Court of
Here's what Mirko writes:
begin with, it should be noted that I am an attorney in the law firm that
represented the plaintiffs in the three cases at hand.
Earlier this week the BGH dismissed the appeals
of three DSL subscribers who were previously sued by major music labels EMI,
Sony, Warner and Universal.
In short, the BGH confirmed that damages of EUR 200
per song are appropriate when music is communicated to the public via
P2P-Filesharing. DSL subscribers were found liable as perpetrators for damages
and attorneys’ fees when they did not present alternative facts that could
explain why their IP was used for unlawful filesharing. They also had the burden of
proof for such facts. When the filesharing was done by the subscriber’s
children, they needed to prove they did not neglect their parental supervisory
duties. With regards to filesharing, this means the parents need to explain the
dangers of filesharing to their children and prohibit the use of such systems.
Failure to do so results in full liability for damages and attorney’s fees.
More in detail
All three cases date back to 2007, when the IP
addresses of the defendants were found to be the sources of hundreds (in two
cases: thousands) of MP3s made available for download (communication to the
public, § 19a UrhG – German copyright code) via P2P-filesharing, using the now
obsolete “Gnutella”-Network, which is technically similar to BitTorrent,
because users who download files are also uploading them at the same time.
Since it is technically impossible to tell from the
outside who is operating a PC that is using a certain IP-address, we approached
the DSL subscribers with cease-and-desist letters and an offer for out-of-court
settlement. When no agreement was found, the cases went to the district court
of Cologne. The labels asked for damages of 3000 EUR (for 15 tracks, or 200 EUR
per track) and for their out-of-court lawyer’s fees.
The BGH had previously decided on filesharing cases
in 2010 (I ZR 121/08 “Sommer unseres Lebens”), 2012 (I ZR 74/12 “Morpheus”) and
2014 (I ZR 169/12 “BearShare”). In these cases, the BGH had ruled that when an
IP is found to be the source of filesharing, this is prima facie evidence that
the DSL subscriber was using the P2P client. The lower courts have ever since
been very diverse when it came to what could be asked of the subscriber to
counter the prima facie evidence. Positions ranged from “it is sufficient to
claim that other persons had access (in general) to the subscribers internet”
to “the subscriber needs to name the person who did it”.
Also, the BGH had never decided on the amount of
damages that can be asked and lower courts’ decisions varied from 15 EUR per
song to 300 EUR per song. Since there are thousands of cases similar to the
ones at hand still pending at the lower courts, the three decisions were eagerly
awaited by lawyers and the public alike.
Before the court, the defendants in our three cases
used different arguments against their liability.
In the first case (I ZR 75/14), the defendant
questioned the reliability of the investigations and the allocation of the
IP-address to his DSL account. He claimed that neither he, nor his family had
access to the internet via his account, stating the whole family was on
vacation and they had cut the power for the PC and the router before leaving.
The regional court of Cologne sided with the defendant and thus dismissed the
We appealed and the higher regional court of
Cologne overturned the decision, sentencing the defendant to pay both damages
and lawyers’ fees. This was after hearing the family as witnesses for the
purported holiday. In short, the court did not believe the family was on
vacation and all, disregarding these claims as a defensive lie.
In the second case (I ZR 19/14), the defendant
also questioned the reliability of the investigations and the allocation of the
IP-address to his DSL account. He argued that there was only one PC in the
household and that his 17 year-old son had no access to this at all, while his
wife did have access, but had very little knowledge of PCs and was not able to
install any software due to lack of administrator’s rights. Both the regional
court and the higher regional court of Cologne ordered the defendant pay
damages and attorneys’ fees. The courts reasoned that since there was only one
PC and the defendant had ruled out his wife and son as the perpetrators, it
must have been him who used the filesharing network.
In the third case (I ZR 7/14), there had been
a criminal investigation in which the defendant’s 14 year old daughter had
admitted she was the one to use the filesharing network for downloading music.
Both the regional court and the higher regional court of Cologne had sentenced
the defendant to pay damages and attorney’s fees. She further appealed to the
BGH, claiming that her daughter’s confession could not be used in civil
proceedings, because the police had not advised her daughter that the criminal
confession could be used in a civil case against her mother. Secondly, she
claimed she had instructed her daughter on the illegality of uploading
copyright-protected musical works and thus there was no neglect of parental supervisory
EUR200 per song, to be more precise
On June 11th, the BGH dismissed the
defendant’s appeals in all three cases and upheld the lower court’s rulings.
All three defendants were sentenced to pay 3000 EUR of damages (200 EUR per
song) and the out-of-court attorney’s fees of the major labels. With regards to
the cases #1 and #2, the BGH followed the higher regional court of Cologne that
the defendant did not present (and prove) facts that could explain why someone
else other than the DSL subscriber could be the infringer. In both cases, the
defendants themselves had rather ruled out that someone from their family had
access to the internet at the time of the offence.
In the third case, the BGH found that the higher
regional court was allowed to use the defendant’s daughter’s confession. The
police did not have to explain to her the possible consequences of her
confession for civil proceedings. Also, the daughter was heard as a witness by
the regional court of Cologne, where she confirmed her confession. The BGH then
decided the defendant had neglected her parental supervisory duties, because
she failed to prove she had properly instructed her daughter about the dangers
Having found that all three defendants liable for
the infringements, the BGH confirmed the rulings of the higher regional court
of Cologne, granting the plaintiffs damages of EUR 200 for each of the 15 songs
that were communicated to the public. The damages were estimated by the court
using the licence analogy method. The higher regional court began its
calculation at 50 cent per song, and further estimated that it was realistic to
anticipate 400 downloads to be made from the plaintiffs PCs, thus totaling EUR
200 per song. This is in line with earlier judgments by the higher regional courts
of Frankfurt and Hamburg.
We believe these judgments will make it easier for
copyright owners to enforce their rights. Some of the lower courts made it easy
for defendants to get away with stories that would shift the burden of proof to
the plaintiffs when the latter actually had no means to prove what happened
within the walls of the defendants’ homes. According to these recent rulings,
when defendants claim they “didn’t do it”, they will have to present a credible
alternative explanation for why their internet connection was the source of
illegal uploading. A vacation that never actually happened is no such
alternative. The BGH also put an end to a lengthy disagreement between various
lower courts on how to calculate damages in filesharing cases."