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“THE PIRATE BAY” CASE: THE COURT OF JUSTICE DECIDES THAT THE ADMINS OF A TORRENT FILE SHARING PLATFORM ARE ALSO LIABLE FOR COPYRIGHT INFRINGEMENT

23/06/2017

With judgment of 14 June 2017 in case C-610/15, the Court of Justice held that the making available on the Internet of content downloaded by users amounts to a “communication to the public”, an activity that requires the authorization of the copyright holder.

 

Stichting Brein is a Netherlands association that represents and protects the interests of copyright holders. This was a case in which the association sued before the Dutch courts requesting a blocking injunction against Ziggo and XS4ALL, access providers whose members for the most part use the online sharing platform “The Pirate Bay”. The injunction was asked so as to block the domain names and IP addresses of “The Pirate Bay”, with a view to avoiding that the services offered by the above mentioned providers could be used to infringe the copyright of entities or individuals whose interests Stichting Brein was required to protect. Stichting Brein succeeded at first instance, but saw its claims dismissed on appeal.

The Supreme Court of the Netherlands referred the case to the Court of Justice for a preliminary ruling and asked whether there is communication to the public, pursuant to art. 3, para. 1 of Directive 2001/29, on part of an Internet website administrator, where the website concerned does not have any protected works on it but instead is based on a system in which metadata related to protected works stored on users’ computers is categorized and indexed in such a way as to allow other users to find, upload and download the aforesaid protected works. In this judgment the Court of Justice held that the provision and management of an online sharing platform such as “The Pirate Bay” must be considered an act of communication to the public pursuant to directive 2001/29 and therefore may be allowed only with the prior authorization of the copyright holder.

The Court also held that the administrators of “The Pirate Bay” are not involved in a “mere provision” of physical equipment but instead carry out an essential role in the making available of protected works. Indeed, they act with full knowledge of the consequences of their behaviour, with the objective of providing access to the works and indexing and listing the “torrent files” that allow users to find the works and share them in a peer-to-peer exchange with and between other users. Moreover, communication of this sort concerns an indefinite number of potential recipients and extends to a significant number of people, as the administrators of “The Pirate Bay” themselves declared on the website.

Finally, the Court held that it was indisputable that the making available and the management of an online sharing platform, such as that of the main proceedings, were carried out with a view to profit, given that the aforesaid platform also produced considerable amounts of advertising revenue.


SOLE DIRECTOR OR BOARD OF DIRECTOR OF AN S.P.A. SEIZURE OF COMPENSATION WITHOUT THE RESTRICTIONS SET BY ART. 545 OF THE CODE OF CIVIL PROCEDURE

01/06/2017

The Supreme Court (Joint Divisions), with judgment of 20 January 2017, no. 1545, have decided that a sole director or board of director of an S.p.A. (Italian public limited company) are both bound by a corporate relation which – considering the organic identity that occurs between the natural person and the entity, as well as the absence of a requirement of coordination – is not included among those provided under no. 3 of art. 409 c.p.c.. It follows that the compensation due to the above mentioned subjects for the functions carried out in a corporate context can be seized without the restrictions pursuant to the fourth paragraph of art. 545 c.p.c..

 

Following the expropriation of goods in the possession of third parties, upon commencement of such procedure by a bank against a debtor, the first instance judgment decided that the bank should be awarded the total sum set aside by the third parties by way of compensation for their activities. The debtor was a director of one of the third party companies subjected to the seizure as well as a member of the board of directors of one other of such companies. The debtor opposed the interim judgment of assignment, arguing that his activity should be qualified differently, in particular, according to the director, it should fall within the scope of application of Article 409 number 3 of the Code of Civil Procedure, so that in fact a restriction to the seizure would apply (up to a fifth of the salary). The Court upheld the director’s opposition, qualifying the work carried out by the debtor as self-employed, which therefore limited to a fifth the assignment of the sums set aside by the third parties subjected to the seizure. The bank filed a petition to the Supreme Court.

The query submitted to the Joint Divisions of the Supreme Court was whether the determination of the relationship between the public limited company and its director could be qualified as self-employment or autonomous work and, consequently, whether the restrictions on the seizure of salary, equal to one fifth of that, as provided by the fourth paragraph of art. 545 c.p.c., could apply to compensation and wages of the director.

Until the decision in this case, the case law amounted to several consecutive decisions that traced their origins back to the 1980s, and from which two orientations emerged. One of these excluded that, in the context of a governance relationship, there could be an identification of two distinct centres of interest between whom there is an exchange of services, because the regime applicable to S.p.A.s is regulated in such a way as to confer on the director-representative the structural attributions of a body, thereby excluding the existence of a relationship of self-employment and upholding the so-called organic theory. A different orientation was that represented by the so-called contractual theory, which traced the disputes in question to art. 409 no. 3 c.p.c., viewing the relationship between the director and the S.p.A. as possessing the features of continuity and coordination with the activity carried out by the company, features that are required by the regulation in order to determine the jurisdiction ratione materiae of the employment law Court.

A solution to that debate was initially found by the Supreme Court (Joint Divisions) with judgment no. 10680 in 1994, a decision that favoured the qualification of the governance relationship as autonomous work, pursuant to art. 409 no. 3 of the c.p.c., on the basis that “within the corporate organization there are obligatory relations that arise from a continuous, coordinated and prevalent activity, and it is irrelevant that the director is not in a weak contractual position vis-à-vis the company”.

With the present judgment, the Supreme Court (Joint Divisions), annulled the decision appealed by the creditor and rejected the opposition filed by the debtor. The Supreme Court held that the principle stated by the Court of first instance on the restrictions applicable to the credit was wrong, and instead decided that the compensation due to the directors for the activities carried out within a corporate context can be seized in their entirety.


CASE C-527/15 Stichting Brein v Jack Frederick Wullems: COURT OF JUDGMENT ISSUES ANOTHER JUDGMENT ON COMMUNICATION TO THE PUBLIC

10/05/2017

According to the Court of Justice of the European Union, the concept of ‘communication to the public’, within the meaning of Article 3(1) of Directive 2001/29/EC, must be interpreted as covering the sale of a multimedia player on which there are pre-installed add-ons, available on the internet, containing hyperlinks to websites — that are freely accessible to the public — on which copyright-protected works have been made available to the public without the consent of the right holders. Moreover, acts of temporary reproduction, on a multimedia player of a copyright-protected work obtained by streaming from a website belonging to a third party offering that work without the consent of the copyright holder do not satisfy the conditions set out in Article 5(1) of Directive 2001/29/EC.

 

Mr. Wullems sold, on a number of internet sites, including his own site, various models of a multimedia player. On that player, Mr. Wullems installed an open source software, which made it possible to play files through a user-friendly interface via structured menus, and integrated into it, without alteration, add-ons available on the internet, created by third parties, some of which specifically linked to websites on which protected works were made available to internet users without the consent of the copyright holders.

Stichting Brein is a Netherlands foundation for the protection of the interests of copyright holders. Stichting Brein asked Mr. Wullems to stop selling the multimedia player and subsequently brought an action against Mr. Wullems before the referring court, arguing that Mr. Wullems had made a ‘communication to the public’, in breach of Article 3, para. 1, of Directive 2001/29. In reply Mr. Wullems submitted that streaming broadcasts of works protected by copyright from an illegal source was covered by the exception listed in Article 5, para. 1, of the same Directive.

Following a request for a preliminary ruling by the Dutch Court, the Court of Justice recalled its case law on communication to the public, and begun by observing that this case did not concern a situation of ‘mere’ provision of physical facilities for enabling or making a communication. Indeed, Mr. Wullems, with full knowledge of the consequences of his conduct, pre-installed onto the ‘filmspeler’ multimedia player that he marketed add-ons that specifically enabled purchasers to have access to protected works published — without the consent of the copyright holders of those works — on streaming websites and enabled those purchasers to watch those works on their television screens. That intervention enabling a direct link to be established between websites broadcasting counterfeit works and purchasers of the multimedia player, without which the purchasers would find it difficult to benefit from those protected works, was quite different from the mere provision of physical facilities, referred to in recital 27 of Directive 2001/29.

The Court then held that Mr. Wullems had made a “communication to the public”, seeing as the ‘filmspeler’ multimedia player had been purchased by a fairly large number of people. Furthermore, the communication at issue in the main proceedings covered all persons who could potentially acquire that media player and had an internet connection, so that it could be said with certainty that the communication had indeed occurred with regard to a “public”. Moreover, the Court held that this was a “new” public in that it had not been taken into account by the copyright holders when they authorised the initial communication. The Court stated that it was common ground that the sale of the ‘filmerspeler’ multimedia player was made in full knowledge of the fact that the add-ons containing hyperlinks pre-installed on that player gave access to works published illegally on the internet. In fact, the advertising of that multimedia player specifically stated that it made it possible to watch on a television screen, freely and easily, audiovisual material available on the internet without the consent of the copyright holders.

As to the exception raised by Mr. Wullems, the Court held that no legitimate use had been made of the copyrighted work, so that the conduct of Mr. Wullems could not be held to fall within Art. 5, para. 1 of Directive 2001/29. Such provision must be interpreted as meaning that acts of temporary reproduction, on a multimedia player, such as that at issue in the main proceedings, of a copyright-protected work obtained by streaming from a website belonging to a third party offering that work without the consent of the copyright holder does not satisfy the conditions set out in those provisions.


NEUTRAL ISPs AND STAY ORDERS, WHEN YOUTUBE IS UNDER THE DUTY TO PREVENT FUTURE POSSIBILE UPLOAD OF INFRINGING CONTENTS BY USERS

28/04/2017

The Court of Turin, with judgment published on 7 April 2017, for the most part accepted the claims of Delta TV Programs S.r.l., finding the defendants Google Inc., Google Ireland Holdings and Youtube LLC liable for the infringement of the intellectual property rights of Delta TV Programs S.r.l. and in particular its economic rights over television series uploaded on Youtube. The defendants were ordered to remove and eliminate such audiovisual content from Youtube and to prevent its future upload. The Court also ordered that the defendants pay damages to the claimant for a total sum of 250.000,00 Euros.


 

Delta TV S.r.l. is a company operating in the fields of editing, production, rental and distribution of audiovisual and television programmes. The company is the exclusive holder of economic rights in Italy over certain South American television series. Delta TV also holds the rights over the Italian version of such audiovisual works, in so far as it dubbed with its own means the works in their original language. The claimant learned that a certain number of episodes of the television series, in their Italian version, had been uploaded on the internet web sites youtube.com and youtube.it, where they could be watched directly and for free by all internet users. For this reason, Delta TV started proceedings against Google and Youtube asking for the ascertainment of its copyright over the television programmes.

The defendants firstly complained that no evidence was given as to the ownership of the claimant with regard to the economic rights over the television series. The Court of Turin rejected this preliminary argument and observed that the claimant had provided documental proof related to the existence of license agreements concerned with the exploitation of economic rights over almost all of the audiovisual works being discussed; while, for the other works, the Court stated that it mattered little that no evidence had been produced, given that the claimant was acting for the protection of its economic rights over the Italian version of the television series which, in itself, amounts to a derived work that may be independently protected under art. 4 of the Copyright Law.

On the merits, Youtube LLC was qualified as a “hosting provider” and so the provisions of Legislative Decree 70/2003 (implementing EC Directive 2000/31) were applicable to it. Consequently, Youtube had no obligation to preliminarily verify the actual copyright ownership of the individuals who uploaded the videos, also considering that a hypothesis of liability would only arise if Youtube was informed of the unlawful nature of the uploaded videos. The Court also noted that such “ex post” obligation could only arise if a cease and desist communication was sent to Youtube containing the exact URL identifying the presumably unlawful upload.

As for the case at hand, the duty of the defendants to check and remove the unlawful content had only arisen with the serving of the writ of summons containing the exact URLs, and not with the generic cease and desist letter (which did not contain the disputed URLs) that the claimant had sent to the defendants approximately 9 months prior to the commencement of the proceedings.

The evidence was examined in the course of the trial and it confirmed the existence of a legal obligation of the Youtube administrators to actively prevent new uploads of videos that had already been reported and removed. In this regard, it was observed that such videos had never been removed but only obscured by the defendants, which meant that those videos were still visibile from abroad and also from within Italy itself if one were able to simulate usage of a foreign connection.

The Court of Turin therefore confirmed the liability of the defendants for the infringement of art. 16 of Legislative Decree 70/2003, assessed as having occurred from the date of serving of the writ of summons. The defendants were also ordered to pay damages to Delta TV S.r.l.. Moreover, the defendants were ordered to cancel and remove the disputed videos pursuant to art. 156 of the Copyright Law and to prevent the further uploading on Youtube of such videos. The additional criminal measures and the requested publication of the judgment were, however, held to be disproportionate considering the nature of the case in question and, for that reason, those claims were rejected.


INTERESTING DECISION OF THE REGIONAL ADMINISTRATIVE TRIBUNAL FOR LATIUM ON UNFAIR COMMERCIAL PRACTICES IN THE FIELD OF TELEVISION SERVICES.

11/04/2017

With recent decision of 22 March 2017, the Regional Administrative Tribunal for Latium had to consider the petition filed by Sky Italy for the annulment of the measure adopted by the Competition and Market Authority (AGCM) in its meeting of 23 December 2008. The Tribunal upheld the decision taken by AGCM and ordered Sky Italy to pay an administrative penalty of € 200,000.00 for unfair business practices concerning the conclusion of contracts by telephone.


 

Following complaints lodged by consumers, in early 2008, the ACGM started a preliminary investigation against Sky Italy aimed at verifying the integration of alleged unfair business practices, concerning the activation of television services through the conclusion of distance contracts (in particular, by telephone). The disputed measure condemned the conduct of the applicant on two counts, subject to separate analysis: i) the activation of additional services not consciously required by the nominee subscription, on the one hand, and ii) the activation of subscriptions, services and additional premium services with differing characteristics from those promised, on the other.

In the first case, the decision of the AGCM was confirmed by Regional Administrative Tribunal for Latium, which assessed that there was sufficient evidence to show that the call center operators of the applicant did not provide to the users – to whom the subscription of new offers was proposed – suitable and adequate information to enable them to understand that the purchase would have been finalized following the provision of the single telephone consent, and not as a result of the signing of documents sent later to their home. In addition, it was found that very often the enabling of the offers was subject to consent by people other than the subscription holder (i.e. cohabiting delegates in possession of information about the customer’s position) and that were not carried out further checks about the willingness of the real owner to subscribe the promotions. The commercial practice in question was therefore deemed, under this first aspect, aggressive and therefore prohibited.

In the second case, with reference to the extension of subscriptions, additional services and premium services with differing characteristics than those promised, the conduct of Sky Italy has been qualified as misleading, given that the differences mainly related to the actual cost of  the offers and in particular the lack of indication of the activation costs and a clear illustration of conditions and time limits for receiving the service. In particular, the Regional Administrative Tribunal pointed out how it should be recognized that there was an inherent weakness of the consumer with regard to the counterparty, due to the simultaneous physical distance of the contracting parties, which makes particularly significant the burden of providing clear and exhaustive information regarding the immediate purchase of the package and the content of the services offered.