Monday, 24 April 2017

Higher Regional Court of Düsseldorf applies CJEU Mc Fadden decision

1709 Blog readers will recall that last September the Court of Justice of the European Union (CJEU) issued its decision in the important Mc Fadden case [here and here], a reference for a preliminary ruling from Germany.

The CJEU ruled that the provider of a password-free, free WiFi can be requested to have his internet connection secured by means of a password. 

Via 1709 Blog friend Mirko Brüß (Waldorf Frommer Rechtsanwälte) comes the news that a German court (though not the one that had made the Mc Fadden reference) has recently applied the CJEU judgment, and the principles laid down therein 
[Mirko also wishes to let readers know that a new reference on the right of communication to the public and filesharing was made by the Regional Court of Munich on 17 March last (Case No21 S 24454/14): details are not yet available on the Curia website, but as soon as they are this blog will provide relevant information].

Here’s what Mirko writes:

In a judgment on 16 March 2017 the Higher Regional Court of Düsseldorf requested the operator of an open WiFi (and a TOR exit node) to take action against repeated copyright infringements by users of his IP-addresses (case no. I-20 U 17/16). 

This appears to be the first time a German court has dealt with such a case after the CJEU handed down its Mc Fadden decision on 15 September 2016 ... At least, this is the first publicly available decision. 

The ruling of the court does have wide implications for the operators of open WiFi networks, so-called hotspots.

Tobias McFadden
Factual background

The defendant was an operator of five so-called hotspots, ie access points that can be used by anybody to log into the internet using the defendant‘s internet connection. It remained disputed between the parties whether the defendant operated his network commercially or privately, and whether or how users needed to register themselves to be able to use the network. The defendant claimed that users were asked to refrain from ‘illegal activities’, but did not explicitly ask users to refrain from sharing copyright-protected material via peer-to-peer networks. The defendant also operated a ‘TOR exit-node’ on his IP-address, thus enabling anonymous users to access the internet via his IP address (see this infographic on general TOR functionality).

The claimant is the owner of copyright in a computer game. He had noticed the defendant’s IP-address on several occasions as being the source of an infringing download offer of other works via a BitTorrent network. After obtaining knowledge of the defendant‘s name and address via the court proceedings provided for such cases in Germany (§ 101 Abs. 2, 9 Urheberrechtsgesetz, = UrhG, German copyright code), the claimant sent several cease-and-desist letters to the defendant in 2011, asking him to stop the infringing activities.

However, further infringements were found in 2013, even after the cease-and-desist letters were served to the defendant. At this point, the claimant took matters to court, and obtained a judgment of the District Court of Düsseldorf, that enjoined the defendant from aiding third parties to make available to the public the claimant’s game via peer-to-peer networks and via his own IP-addresses. The court also ordered the defendant to pay the claimant's out-of-court costs for EUR 651,80 (judgment on 13 January, 2016, case no. 12 O 101/15).

The defendant appealed the decision. He claimed that unknown users of his network were the culprits, and he had no way to identify them and no obligation to stop their activities.

View of Düsseldorf
The Higher Regional Court‘s decision

The Higher Regional court of Düsseldorf rejected the appeal and upheld the first decision. While the Regional Court’s judgment was issued before the CJEU decided Mc Fadden, the Higher Regional Court had knowledge of this decision and applied it to the case.

In so doing, the court found that it did not matter whether the defendant operated the hotspots commercially or privately. Furthermore, it did not matter to the court whether the copyright infringements were committed by users of the Hotspots or users of the TOR exit-node.

In all scenarios, the defendant was liable for the infringements and was requested to take reasonable measures to prevent further infringements. To justify this, the court cited Mc Fadden, especially paras 80 – 96. The judges found that, because of the earlier infringements, the operator should have taken reasonable measures to ensure that his users would not continue to infringe third-party copyrights. With regards to the WiFi network, the court sided with the CJEU and ruled that password-protecting the internet connection may dissuade the users of that connection from infringing copyright, provided that such users are required to reveal their identity in order to obtain the required password and may not therefore act anonymously. If this could have been asked of the defendant irrespective of earlier infringements was left undecided by the court.

With regards to the TOR exit-node being the possible source of the infringements, the court found that the defendant could have and should have taken measures against copyright infringements by disabling peer-to-peer communication via the TOR network. It remained undisputed between the parties whether this is technically possible, so the court took such a measure for granted.” 

1 comment:

Krzysztof Garstka said...

While some concerns could be raised about the freedom of expression-related implications of not allowing someone to be an "exit node" in a network, I think the reasoning could be justified with a comparison. The same way you shoudn't carry someone's briefcase through the airport security gate, you shouldn't facilitate (as an individual) the transfer of unknown traffic, from unknown individuals, through your connection.