Wednesday, 25 April 2018

AG Campos provides reasonable interpretation of the right of communication to the public in his Opinion in Renckhoff

The work at the centre of this litigation
Does the inclusion of a work [the photograph on the right hand side] — which is freely accessible to all internet users on a third-party website with the consent of the copyright holder — on a person’s own publicly accessible website constitute an act of communication to the public within Article 3(1) of the InfoSoc Directive if the work is first copied onto a server and is uploaded from there to that person’s own website?

This is the question that the Court of Justice of the European Union (CJEU) has been asked to address in Land Nordrhein-Westfalen v Renckhoff, C-161/17.

This morning Advocate General (AG) Campos Sánchez-Bordona delivered his Opinion [not yet available in English], and answered in the negative.

Let’s see what happened.

Background

Well, the background is quite ... ridiculous (in the sense that it is ridiculous that litigation is brought in the first place in instances like the present one), and also the AG seemed to agree.

At the very outset, in fact, he observed that not long time ago, school research and work on posters used to be accompanied by photographs, prints and drawings published on books and journals/magazines and hanged on the walls of schools (so to allow parents to view them), “without the authors of those images seeking compensation for their use” [NOTE: all direct quotes are my own translations from the Italian version of the Opinion]. Things have changed and, nowadays, the images used are digital and the resulting school work/research is uploaded on freely accessible websites.

This is indeed what happened in this case to a schoolgirl, who found an image of the city of Cordoba online and used it for an assignment for her Spanish class, providing acknowledgment of the website from which she had downloaded the photograph (though not of the photographer, because the website where the photograph appeared did not provide any). Upon finishing her work, she and her teacher uploaded it online … but the photographer [in my view it might be even questionable that the work is protected by copyright in the first place; although the parties to the national litigation agreed that the photograph is protected, the AG also had his doubts: see further below] came forward claiming infringement of his copyright in the photograph, and that he had just granted a licence to use to the image to the website from which the pupil had downloaded it.

Litigation has ensued all the way up the German Federal Court of Justice [!!], which has decided to stay the proceedings and refer the question above to the CJEU.

The AG Opinion

Preliminary remarks

Before even starting his own substantial analysis, the AG noted that the notion of communication to the public has been “already subject to several decisions of the Court”. Yet, “the current reference shows that the interpretative questions of national courts have not been fully solved yet” [this is indeed true … in terms of numbers, the CJEU is fast approaching its 20th decision on Article 3(1) of the InfoSoc Directive].

Then, the AG noted that the way the referring court has phrased the question requires the CJEU to only consider the construction of the right of communication to the public, not also the issue of reproduction [of course, by downloading the photograph and re-uploading it, the schoolgirl made acts of reproduction].

As mentioned, the AG did not find it straightforward to say that a photograph like the one at issue would be protected by copyright. Nonetheless, pursuant to the freedom left to Member Sates [but not all took advantage of this possibility, an example being the UK] by Article 6 of the Term Directive to protect ‘simple photographs’, it would appear that – at least under German law – such photograph would be protected.

Notion of communication to the public: an ‘act of communication’

The AG then turned to the construction of Article 3(1) of the InfoSoc Directive.

In relation to the need for an ‘act of communication’, the AG noted that one should consider “the indispensable role played by the user and the deliberate nature of its intervention” [here the AG directly referred to GS Media, on which see here]. Such criterion requires to consider both subjective elements relating to the behaviour of the user [the AG referred to GS Media to highlight how the Court has been taking into account also such elements] and objective circumstances, as the user’s act must give access to or facilitate access [this is a very important point relating to Article 3(1), which the CJEU has particularly elaborated in its judgments in Filmspeler – a case in which the AG was once again Campos; see my take here – and Ziggo, on which see here] to a work.

Whilst it is true that both the schoolgirl and her teacher were aware of the consequences of their behaviour when they posted the photo online, ie granting access to a work, it would be wrong not to consider: (1) the accessory character of the photograph as an element of a broader work; (2) the fact that the photograph was already freely accessible and had been published with the author’s consent; and (3) the educational context in which the act of communication occurred, ie without any customers or profit-making intention.

The AG observed that in a case like the one at issue, unlike GS Media, one should not consider whether the pupil and her teacher knew that the original photograph had been published or not with the consent of the author, but rather whether they should know that, to reproduce a third-party photograph, they needed the author’s consent. The AG answered in the negative, holding that one should bear in mind that: A) those who act without a profit-making intention do not usually act with full knowledge of the consequences of their behaviour; and B) the work communicated by the user was already lawfully and freely accessible on another website.

If the factors to which the arguments above refer to subsist, then “there is no communication to the public”. However, this is NOT the case when the the righholders notifies the user that the work to which it gives access is unlawfully available online or when the access granted by the suer circumvents protection measures.

All this considered, the AG found that:

·       There was no mention of who the author of the photograph was on the website from which the pupil had downloaded the photograph;
·       The photograph was easy to obtain, as there were no restrictions (whether technical or related to the terms of use) on such website.

These elements might have led the pupil and her teacher to believe that the photograph was free to use by the public.

This conclusion is not the same as thinking that there are no rights on such photograph. However, in cases like the one at issue, the user “may presume that the author does not object to the limited use of such images, for educational purposes” [para 78 – this is correct both in light of CJEU case law and, more banally but not necessarily a given, in terms of common sense]

The AG continued, holding that any different conclusion would lead to “limiting the use of most information available online. Such limitation could affect freedom of expression and information as per Article 11 of the EU Charter. Furthermore, in the present case such limitation would affect the right to education as per Article 14(1) of the Charter.” [para 79]

AG Campos Sánchez-Bordona
The AG also held the view that lack of a profit-making intention is more relevant than what the referring court appears to think. Here the AG recalled the GS Media presumption as applied to for-profit link providers to hold that – in case there were any doubts – for users without a profit-making intention it is necessary to demonstrate their knowledge of the unlicensed character of the work linked to. And the lack of any warning should be read, according to the AG, as reinforcing the idea that neither the pupil nor her teacher had full knowledge of the protected character of the work and the need to seek the author’s authorization.

Notion of communication to the public: same technical means and a new public

The AG then turned to consideration of whether in the present case the work has been made available to a ‘new public’, in that the technical means used for the original and the allegedly infringing communication was the same.

The AG ruled out that there would be a new public in this case: “As the photograph is easily and lawfully (ie with the consent of the rightholder) available to all internet users, it is unclear how the intervention of a pupil and her teacher may be decisive so that a greater number of persons access” the work [para 100].

The AG also rejected the idea – advanced by some commentators – that the ‘new public’ criterion would amount to an undue exhaustion of the right of communication to the public, which would be as such contrary to Article 3(3) of the InfoSoc Directive: “It is, instead, the logical consequence of the way in which the holder of the rights to the photograph has consented to its use, knowing or having to know that lack of any protection against the reproduction of the image could lead internet users to believe that it was freely available to the public” [para 104].

It is not too much to ask a professional, when he/she publishes a work online, personally or through third parties, to adopt the appropriate measures, also of a technical nature, in order to clarify his/her copyright and the will to control the circulation of his/her own work” [para 105]. This does not reduce the high level of protection that authors are entitled to.

In any case, one can always seek the removal of one’s own work if he/she believes that its use is prejudicial [para 107 - here the AG does not elaborate further, but it seems that this is an argument to strengthen the conclusion that the online publication of a work does not amount to a weakened copyright protection, or even the ‘exhaustion’ of one’s own rights].

Also applicable to copyright protection ...
possibly one of the main points
of the AG Opinion
The role of exceptions

The AG then recalled that, in any case, educational exceptions might be available. If Germany has transposed Article 5(3)(a) into its own law, then account should be given of the fact that the EU Charter recognizes the right to education as a fundamental right. This should guide the correct application of the relevant exception, including ensuring that this fundamental right is not unduly compressed. In any case, in the case at issue, also compliance with the three-step test appears ensured.

Comment

This looks like a reasonable Opinion in the context of a fairly unreasonable claim, as well as a good interpretation of CJEU case law on the right of communication to the public. 

Two particular points are worth making.

The first one is that the AG Opinion is a helpful reminder that copyright protection should be balanced against other fundamental rights, including the right to education.

The second point relates to the construction of the right of communication to the public, and in particular the 'new public' criterion. It will be important to see if the Court, like the AG, addresses the criticism that the 'new public' criterion has resulted in an exhaustion of the right of communication to the public. The interpretation provided by AG Campos appears sensible, and serves as a helpful reminder that - similarly to the case of other IP rights (eg trade marks and the steps to be taken against 'genericide') also copyright protection comes with certain 'responsibilities' on the side of rightholders. 

Let’s see if the Court agrees …

Friday, 20 April 2018

Moral rights and architectural works in a recent Italian decision


Casa Bosco
To what extent can an architectural project be modified without the express consent of the architect without such modifications being an infringement of their moral right of integrity?

This is the question that not long time ago the District Court of Milan (Tribunale di Milano) addressed in Boeri v Agnoletto, decision No 1568/2018.

Background

In late 2000s well-known architect Stefano Boeri was commissioned to realize an architectural project - then become 'Casa Bosco' - for ‘residential standardized units – Low Cost housing units’ in Milan by virtue of a contract that foresaw that the architect and the commissioning party would have the co-ownership of any resulting rights, and also that any separate use of the project – including for marketing purposes – by either party should be authorized in writing by the other party.

Following the finalization of the project and the decision of Boeri to leave it due to his political commitment with the Municipality of Milan, a new contract was concluded to prepare the final version of the project and obtain the necessary administrative/building permits. 

Also this contract envisaged that Boeri would co-own any rights to the project as finalized, save for the right to modify the project if any such modifications would be necessary to obtain the necessary authorization.

In 2014 Boeri brought proceedings for infringement of – among other things – Article 20(1) of the Italian Copyright Act. This provision states that, irrespective of economic rights and even after their transfer, the author of a work has the right to object to any deformation, mutilation or any other modifications, as well as any other act to the detriment of the work, that may be prejudicial to their honour or reputation. The architect claimed in fact that both modifications made to his social housing project ‘Casa Bosco’ and the transformation of the project into a for-profit enterprise indeed infringed his moral right of integrity.

The decision

The Court began its analysis by noting that Article 20(2) of the Act also states that [the translation from Italian is mine] “in works of architecture the author cannot object to any modifications that were necessary in the course of their realization. Similarly, they shall not object to any further modifications that were necessary to be made on a work that has been already realized.”

The judges noted that in Italian case law there have been two main interpretations of this provision. On the one hand, there is a restrictive view according to which the only possible modifications are those which in any case do not infringe the author’s moral right of integrity (hence, the provision would only apply with regard to economic rights). On the other hand, the prevalent view is that the derogation within Article 20(2) also applies to the right of integrity [this view appears preferable, also if one considers the fact that it is included within the provision devoted to moral rights]: the authorization of the author is not needed for any modifications that are detrimental to their honour or reputation should such modifications be indispensable to the realization of the work.

The modifications lamented by the architect concerned: (1) the removal of contractual clauses relating to the future sale of the units; (2) the modification of the ratio between free construction- and social construction-reserved areas. 

The Court held that the former would be outside the scope of the author’s rights as it would relate not to the project as such but the economic exploitation of the resulting units, and the latter related to something that the author had consented to by entering the relevant contracts.

The judges thus dismissed Boeri’s action.

Monday, 16 April 2018

The COPYKAT: licensing, lawsuits, and legislative updates

Community Health Systems fails Microsoft check-up on licensing


Technology giant Microsoft has filed a suit against Community Health Systems for “willfully infringing Microsoft’s copyrights through unlicensed use of Microsoft’s software,” according to a lawsuit filed last month. Microsoft also alleges Community Health Systems is guilty of willful breach of its contractual obligations, and implied covenant of good faith and fair dealing.

Community Health Systems is a Fortune 500 private company based in Tennessee, USA. CHS is the largest provider of general hospital services in the United States in terms of number of acute care facilities. According to its website, CHS’s affiliates own, operate or lease 126 hospitals in 20 states with approximately 21,000 beds. 

Microsoft and CHS have a number of licensing agreements for its software, which prohibit CHS from distributing, sublicensing, renting, leasing, lending or hosting any Microsoft software. The products in question include Microsoft’s Windows, Office, SQL Server and Datacenter.

According to the 2013 Business & Services Agreement (MBSA) signed between the parties, Microsoft has “the right to verify compliance with the license terms” through an independent auditor, Deloitte. In late 2016, Microsoft notified CHS that it was exercising its contractual rights to verify licensing and contract compliance.

Around this time, CHS was in the process of selling off (divesting) various hospitals to new management. As reported by the Nashville Business Journal, CHS has sold more than 30 hospitals in the past 15 months, and plans to sell more this year. CHS is alleged to have sweetened the divestment deals by providing its buyers access to Microsoft Corp. software. The lawsuit states that “despite having no right to do so, CHS intentionally facilitated the continued use of Microsoft software by these divested entities.”

CHS has apparently missed numerous mutually agreed upon deadlines, and has failed to provide complete data to Microsoft. Microsoft insists that this demonstrates CHS’s “unwillingness to comply with its contractual obligation and/or with the independent verification process.” Microsoft’s lawyers charge CHS with being “largely not responsive to, if not obstructionist of” the Deloitte audits.

For reference the complaint, Case 3:18-cv-00291, was filed March 15th in the U.S. District Court for the Middle District of Tennessee, and made public several days ago in early April. According to the Docket, Microsoft’s legal team has been granted a case management conference in early June. CHS has until May 7 to respond to the complaint.


"Grande" victory on vicarious liability in RIAA piracy case

The Recording Industry Association of America’s legal battle against Texan internet service provider Grande Communications has been given the green light proceed to trial, although with the vicarious copyright infringement claim removed.

Pursuant to the Judge’s recent order, the matter continues on the contributory copyright infringement claim alone. This move is considered by Torrent Freak to be a partial defeat for the RIAA’s piracy lawsuit, as the vicarious copyright claim against Grande Communications has been dismissed. 

By way of background, several major record labels including Universal Music, Capitol Records, Warner Bros and Sony Music - represented together by the RIAA - brought action against Grande Communications for the copyright infringements of its customers. The original complaint, Case 1:17-cv-00365, was filed in April 2017 in the Austin Division of Western Texas District Court.


Grande denied these accusations, and filed a motion to dismiss the case. In respect of the vicarious liability aspect, vicarious liability is established when the third party (the ISP) has the right and ability to control the actions of the direct infringer, and the third party derives a direct financial benefit from the infringement. 

The RIAA claims Grande can be held liable for vicarious infringement, because the ISP has a “direct financial interest in keeping pirating subscribers on board.” 

As detailed in the lawsuit, piracy tracking company Rightscorp has provided Grande with notice of specific infringers who are using Grande’s high-speed internet service to infringe various copyrighted works. Through this process, Grande has been put on notice and informed of more than one million infringements. 

Grande admitted that while it received millions of takedown notices from Rightscorp, these notices based on flawed evidence and, as “mere allegations,” are not worthy of acting upon. In particular, the ISP explained that the notices of copyright infringement generated by piracy watchdog company Rightscorp are “so numerous and so lacking in specificity, that it is infeasible for Grande to devote the time and resources required to meaningfully investigate them.” 

Contrary to the RIAA’s allegations, Grande asserted that it was not failing to remove infringers for profit reasons.  Will the case turn on Rightscorp’s expertise, and the quality of its notices?

This case has considerable similarities to the legal battle between BMG Rights Management and internet service provider Cox Communications, in which a Virginia federal jury ruled that Cox was responsible for the copyright infringements of its subscribers. The Court of Appeals for the Fourth Circuit later threw out the $25 million piracy liability verdict.


EU-ser Created Content: draft Copyright Directive fails to hit the right note with artists

About 18 months ago, the European Commission announced its proposal for a Directive on Copyright in the Digital Single Market, currently in draft stages  Industry groups are keen to ensure their opinions are taken into consideration, especially in instances where consumers share content which belongs to artists, authors, record labels, and television channels. On 12 April, various trade groups representing Europe’s creators and creative content producers published an open Letter to the European Council about the proposed Directive. 

While the Letter’s authors support the primary objectives of the proposed legislation, they suggest that, far from ensuring legal certainty, the directive as currently drafted “could be detrimental to our sectors,” which include journalism, film and TV, music, and sport. 

In particular, the problems seem to arise with sections addressing the “use of protected content” by ISPs and other platforms which “store and give access to large amounts of works and other subject-matter uploaded by their users”. 

The E-commerce Directive states that EU Member States shall ensure that internet service providers are not liable for copyright infringements carried out by its customers, on condition that: (a) the ISP does not have actual knowledge of illegal activity or information; and (b) the provider “acts expeditiously to remove or to disable access” to the illegal content, once they become aware of it (see Article 14 of the E-commerce Directive). This article provides certain entities with a “safe harbour” from copyright liability.

Accordingly, many User Uploaded Content (UUC) platforms, like YouTube, argue that they are not responsible for any copyright infringing material uploaded by their users. This principle originates from the e-commerce directive and holds that platforms are not liable for their users’ infringement, provided that they enforce takedown procedures initiated by copyright owners. The copyright industries – such as those mentioned above – want the safe harbour reformed so that it no longer applies to user-upload sites (Complete Music Update).


This draws into question how online platforms hosting UUC should monitor user behaviour and filter their contributions, rather than by reviewing content after it has been published and reported or “flagged” as copyright infringement. This may, as has been discussed with Facebook’s proposed use of artificial intelligence in copyright and hate speech monitoring, “inevitably require an automated system of monitoring that could not distinguish copyright infringement from legal uses such as parody” (The Guardian).

The relevant sections of the draft Directive are Article 2, Article 13(1) and Article 13(4). 

Article 2 defines which services fall under liability, mentioned further at Article 13. The latest draft could leave most UUC platforms outside the scope, despite the fact they continue to provide access to copyright protected works and other subject-matter (for example, music playing in the background of a makeup tutorial on YouTube). 

The problem with Article 13(1) as currently written is that it risks narrowing the scope of the right and contravening CJEU jurisprudence. The letter’s authors argue that “any new EU law should secure that this right is broad,” and “contain no additional criteria which could change via future CJEU rulings.” 

As for Article 13(4) and its relevant recitals, the authors suggest the language is tantamount to a new safe harbour, which would both “seriously undermine fundamental principles of European copyright,” and pose “unwarranted liability privilege risks breaching the EU’s obligations under international copyright treaties.”

The Letter closes with the authors’ promise to “remain at the Council’s disposal to find solutions to these points.” For more information on the proposed Directive, be sure to check out the IPKat’s numerous posts on the subject.


House Judiciary Committee goes for a modern remix of US Copyright Law

Copyright legislation is getting an update on the other side of the Pond, too. The United States House Judiciary Committee voted unanimously today (32-0) to approve House Bill 4706, “to provide clarity and modernize the licensing system for musical works under section 115 and to ensure fairness in the establishment of certain rates and fees.” More commonly known as the Music Modernization Act, the bill now heads for consideration by the full House of Representatives. The act has received wide bipartisan support from Democrats and Republicans alike, and appears to be “on the fast track” for approval. 

Speaking to ABC news, John Simson noted that Americans “...have a 1909 statue trying to govern 2018 technology, and it doesn't work.” Mr Simson is a professor at the American University and founding member of Sound Exchange, a non-profit organisation set up to collect and distribute performance royalties.

Title I (the first section) of the bill seeks to address how modern digital music services operate, by creating a blanket licensing system to quickly license and pay for musical work copyrights. Another key aim includes discouraging litigation in favor of simply ensuring that artists and copyright owners are paid in the first place without such litigation. 

Title II, entitled “Compensating Legacy Artists for their Songs, Service, and Important Contributions to Society (CLASSICS) Act” will focus on public performance rights for pre-1972 recordings. In particular, musicians with pre-1972 recordings will receive royalty payments when their tracks are played on the radio, with royalties then allocated for recordings played on the Internet, cable, and satellite radio. 

Title III, the “Allocation for Music Producers (AMP) Act,” will ensure that record producers, sound engineers, and other creative professionals receive compensation for their work.


The Music Modernization Act will also create an American agency or “mechanical licensing collective,” that would house all music publishers under one roof. The digital streaming services will therefore pay the agency, which tracks and collects royalties on behalf of the artists.

IP Subcommittee Vice Chairman Collins noted that “the current music licensing landscape undervalues music creators and under-serves music consumers. Outdated copyright laws have produced unnecessary liabilities and inefficiencies within the music licensing system, and stakeholders across the music industry have called for reform. [...] This bill moves the music industry towards a freer and a fairer market, enabling it to leverage the present and future benefits of the digital age.” 

More statements from Judiciary Committee leaders on the their passage of the Music Modernization Act can be found on the committee website.


Spotify turns up the volume on licensing technology

On the topic of licensing, the day after the Music Modernization Act was approved by the Judiciary Committee (see above) Spotify announced plans to buy Loudr.fm, a San Francisco-based company which provides licensing technology. The deal has been described by Reuters as the acquisition of a “cover song licensing firm to tackle copyright risks.”

As a company which offers “Big Data for Music Rights,” Loudr’s platform obtains mechanical licenses to distribute recordings as digital downloads, ringtones, CDs or vinyl records. Publishers are able to “digitalize their collection process and gain more insight into the rights they control,” and businesses are able to “discover and automate publisher payments for music content at scale.”


Spotify’s purchase of Loudr comes only months after being hit with a lawsuit seeking damages of up to $1.6 billion (£1.1 billion) by Wixen Publishing, the California-based company that represents Tom Petty, Neil Young, Rage Against the Machine, Missy Elliott and others. The Wixen lawsuit, like others, demonstrates the difficulty Spotify faces in tracking down the right publishers connected to songs, and ensuring the correct royalties finds its way to the appropriate rightsholders.

In its New York Stock Exchange listing document, Spotify disclosed that licensing and royalty payment problems are a key threat to its business model. To make its 35 million tracks available for listeners, Spotify requires licenses from the musicians and record labels who own the songs. Additionally, Spotify has a complex royalty payment scheme, and it is difficult to estimate the amount payable to musicians under their license agreements. Even if Spotify secures the necessary rights to sound recordings from record labels and other copyright owners, artists may wish to discontinue licensing rights, hold back content, or increase their royalty fees.

In a press release dated 12 April, Spotify explained the Loudr team of publishing specialists and technologists will join Spotify’s New York offices. “Loudr will contribute to Spotify’s continued efforts towards a more transparent and efficient music publishing industry for songwriters and rights holders.”


This update by Kelsey Farish