Law firm gets sued over threats to name and shame alleged downloaders

Undoubtedly moved by the conviction that the only bad press you can get is your obituary, Bavarian law firm Urmann + Collegen (U + C) have threatened to publish a list of its clients’ opponents in “open and pending” matters. U + C are charmingly referred to as "Porno-Anwälte" ("porn lawyers") by a local media outlet (here), not because of any alleged moonlighting activities in the adult entertainment industry, I hasten to add, but because they are notorious for representing copyright owners from said industry.

U + C rely on a recent decision by the Bundesverfassungsgericht (Federal Constitutional Court, BVerfG), where the judges held that a law firm may in principle publish lists of companies or notable individuals it has acted against (12 December 2007, 1 BvR 1625/06, available here). The case concerned a list of commercial entities, mainly banks and insurance companies, which was used as an advertising tool to attract new clients – look at all the big names we have sued (or who have sued our clients…)! The BVerfG contended that there is nothing dishonourable about being involved in a legal dispute, so the mere mention that the firm has acted against a certain company, without even claiming to have won the dispute, cannot shed a dubious light on that company.

It is more than doubtful that the BVerfG would detect an advertising function in naming private individuals that have no claim to any fame whatsoever, especially if the law firm in question is primarily associated with acting against alleged filesharers/downloaders of porn and software. The only conceivable aim of announcing the publication of a list of opponents is to shame John or Jane Smith (who may well be no more than the ISP subscriber and never have actually downloaded anything) signing a cease and desist undertaking and paying the lawyers’ fees, which would clearly contravene privacy and data protection laws.

This view is shared by the Landgericht (Regional Court) Essen and the Amtsgericht (District Court) Regensburg, both of which issued injunctions restraining U + C from publishing the respective applicant’s name (LG Essen, 30 August 2012, 4 O 263/12, available here; for a report on the AG Regensburg injunction, see here). The Bayerisches Landesamt für Datenschutzaufsicht (Bavarian State Office for Data Protection Supervision, BayLDA) also issued a preliminary order enjoining U + C to desist from publishing a list of opponents (see press release here).

U + C have grudgingly declared that they will not publish a list of opponents for the time being, but complain that they were not heard before the BayLDA, that the BayLDA was wrong on both the facts and the law, and that they will take matters to the competent administrative court (see U + C website here). According to the BayLDA’s press release, U + C were informed in advance of the planned order and given the opportunity to respond, but failed to meet the prescribed deadline.

Interestingly, U + C have not publicly responded to the civil court injunctions – maybe they do not want to put ideas into the heads of the hordes of people who received warning letters from them (allegedly up to 150,000; see report here). Imagine thousands of people taking out injunctions against the firm – which would have to bear the costs of all those proceedings…

For what it’s worth

The Higher Regional Court of Celle (OLG Celle) recently had to decide a curious question: what is the value of a copyright injunction? It’s tricky enough to calculate damages in copyright cases – the actual damage more often than not is difficult to prove, and models such as the fictitious licence (‘Lizenzanalogie’) or the amount by which the infringer is unlawfully enriched due to the infringement (‘ungerechtfertigte Bereicherung’) all have their weak points. But how do you determine the value of an injunction? And why would anyone even want to know?

The answer to the second question is straightforward enough. In Germany, the amount in dispute (‘Streitwert’) determines whether a claim will be heard in a District Court (Amtsgericht) or in a Regional Court (Landgericht). The Amtsgericht deals with claims where the amount in dispute is 5,000 EUR or less (they also deal with specific areas of law regardless of the amount in dispute, but this does not affect copyright). If the amount in dispute is larger than 5,000 EUR, only a District Court is competent to hear the case.

The answer to the first question is of course the lawyer’s all-time favourite ‘it depends’. In the case at hand, the claimant had applied for an injunction ordering the defendant to cease and desist from communicating to the public football broadcasts in his pub. The court decided that the value of the injunction equalled the amount of the television broadcaster’s estimated loss of earnings during a period of three years. Why three years? I’m afraid the court failed to explain. Maybe three years was the typical duration of a licence agreement in the relevant market, but that’s just a wild guess… However, the court did elaborate that since the case only concerned the application for a preliminary injunction rather than a permanent one, the amount in dispute must be reduced by one third (i.e. the loss of earnings of two years).

In addition, the court pointed out that aspects of general prevention of copyright infringement must not be taken into consideration when determining the amount in dispute. It held that deciding on the amount in dispute is not the place to try and deter potential copycat infringers or penalise the defendant. In doing so, it openly contradicted previous judgments by a number of other Regional Courts, namely OLG Koblenz, KG Berlin, OLG Hamburg and OLG Thüringen. On the other hand, OLG Frankfurt, OLG Braunschweig and Schleswig-Holsteinisches OLG support the same view as OLG Celle.

So basically it’s a tie and something the Bundesgerichtshof (BGH) should be keen to jump on in the name of the unity of the legal system, but I think it’s not very likely that someone will take a case all the way to the BGH just because of a disagreement over the amount in dispute. Dear BGH, can we have an obiter dictum sometime soon, please?

Source: OLG Celle, 7 December 2011 - 13 U 130/11, available online (in German) here

Isn't it urgent now I've hesitated for so long?

Ordinary people may be forgiven for believing that things usually get more urgent the longer you put them off. Anyone who considers filing a motion for a preliminary injunction in Germany should be warned that the law takes quite a different view of the matter.

German music collecting society GEMA and eight other collecting societies learned that lesson the hard way a couple of days ago, when the Regional Court of Hamburg (Landgericht Hamburg) dismissed their motion for a PI against YouTube (judgment of 27 August 2010, file reference 310 O 197/10).

In April 2009, GEMA and YouTube started negotiations concerning a licensing agreement for the GEMA music repertoire. Negotiations were broken off in May 2010 because the parties had somewhat different opinions as to what would constitute a reasonable licensing fee. GEMA and the other collecting societies then applied for a PI against YouTube to have YouTube enjoined to remove 600 music videos from its video platform. Under German law, however, you can only obtain a PI if the matter is urgent. After all, the rationale behind preliminary proceedings is to either "freeze" the status quo or create an interim situation in order to secure your rights and prevent matters from getting worse.

So as a general rule, one should apply for a PI within a couple of weeks - a couple of weeks since what happened, though? When the negotiations failed, the collecting societies were very quick indeed to file the PI motion. However, the crucial point was that they had been aware of the alleged infringements since April 2009 at the latest. It did not matter that GEMA and YouTube had been in negotiations. Therefore, the court dismissed the motion for lack of urgency.

I agree. If you can negotiate for a year and do not mind the allegedly infringing videos being available during the time, the matter can arguably not be so very pressing. If you've waited that long, surely you can wait a bit longer and file for ordinary proceedings... Yet not all was bad for GEMA et al. The judges let slip that they believe a lot militates for the collecting societies having a valid copyright claim against YouTube to cease and desist from making the videos in question available to the public.

Spokesman for YouTube's parent company Google, Kay Oberbeck, said that YouTube is willing to share the proceeds it makes from music with the rightholders, and has invited the collecting societies to return to the negotiating table. They have yet to decide whether to appeal the decision, concentrate on the main proceedings instead, or resume negotiations (or maybe all three).

I agree they should try and come to an amicable solution. Not just because the logos look so nice together (although they do), but mainly because while a lengthy court battle may very well establish that YouTube has a duty to take down infringing videos, it is not likely to do much for musicians' and composers' bank accounts.