Monday, May 2, 2016

Accountable, Not Liable (Video + New Paper)

The regular readers of this blog will know that I have spent last couple of years (and hours of blogging time) pondering on problems posed by injunctions that are issued against Internet intermediaries irrespective of their tortious liability. Today, I would like to share with you some of the fruits of this work - a law and economics paper analyzing this novel type of remedy and a video of my Stanford talk which summarizes some its findings. I hope you will enjoy both of them and already look forward to your comments. Hopefully, in couple of months, I will be able to share with you the announcement of my forthcoming book on the same issue, though with a more typical legal analysis of the European situation.

The paper: Accountable, Not Liable: Injunctions Against Intermediaries (on my SSRN). Its abstract read as follows:

An injunction is usually understood as an order requiring the person to whom it is directed to perform a particular act or to refrain from carrying out a particular act. This conventional definition of injunction addresses a person who acts against the law – an infringer – and should be stopped from doing so. Such a person acts in a way that the rights of other people prohibit. Seeking an injunction is thus nothing but the request of a right holder to an authority (court) for the individual compliance of a particular person with the abstract letter of the law. Injunctions against intermediaries, based on Art. 8(3) of the InfoSoc Directive and Art. 11(III) of the Enforcement Directive , however, do not target such persons. They address by-standers who (also) comply with the law. The basis for this kind of injunction is thus not an act of disrespect towards the rights of others, but the mere existence of circumstances giving hope to right holders, that if they are assisted by such a person, they will be better off. Put differently, such injunctions want to achieve better enforcement by seeking a help of intermediaries who can do more, but do not have to, as they did all the law required from them in order to avoid liability in tort.
This paper thus, as its primary goal, examines a two tier model of regulating intermediaries. A situation where intermediaries do not owe any duty of care under tort law, but are still obliged by injunctions (accountable) to provide assistance. It undertakes a thorough law and economics analysis of Intermediary liability and conceptualizes the role of injunctions against non-infringing intermediaries. The analysis is structured as follows. In the first step, an economic analysis of tort law, injunctions and market transactions is used to understand functioning of the different liability regimes, such as negligence rule and strict liability (see Part 2 and 3). In the second step, the framework is applied to Internet intermediaries and the optimal legal regulation is suggested (see Part 4). In the third step, the findings are summarizes into policy lessons (see Part 5) pertinent to two currently pending debates: should the policy makers (1) replace notice-and-take down policy by the stay-down policy and (2) should they export, reform or entirely repeal the European policy of injunctions against non-infringing intermediaries based on Art. 8(3) of the InfoSoc Directive and Art. 11(III) of the Enforcement Directive.

Sunday, March 20, 2016

AG Speaks Out On Accountability For Third Party Infringements Commited Via One's Open WiFi

As many readers surely know by now, the much awaited Opinion of the Advocate General, Maciej Szpunar, in McFadden C-414/14 case has been released this week. To my great surprise, it is one of the best opinions on the E-Commerce Directive any member of the Court has ever produced (yes, even better than Maduro's Google France or Villalón's excellent Scarlet Extended). AG Szpunar goes systematically through numerous open questions and answers them with a great attention to detail and systematic importance. The fact that he even goes as far as to explicitly stress importance of open WiFi for innovation - something that I and EFF argued in the open letter to the Court - makes me naturally even very happy.

This blog has reported on the issue and background of McFadden rather extensively in this blog post. The case arose between an entrepreneur selling light and audio systems who is also a member of the German Pirate Party and a record label. The entrepreneur operates an open and free of charge WiFi in his store. He uses the WiFi sometimes as a tool for advertising of his store (preloaded home page points to his shop and name of the network bears its name) and sometimes to agitate for his political views (pointing to particular websites such as data protection campaigns, etc.). After receiving a letter informing him about a copyright infringement allegedly committed via his hot-spot, the entrepreneur unusually sued the right holder pursuing the negative declaratory action. The right holder as a defendant later counter-claimed asking for damages, injunctive relief and pre-trail costs as well as court fees under the above mentioned doctrine of BGH.

The heart of the case is about the following four questions:
  1. Is an open WiFi that is provided for free still an information society service covered under the E-Commerce Directive?
  2. Can an operator of an open WiFi benefit from a mere conduit safe harbour enshrined in Art. 12 of the E-Commerce Directive?
  3. Does the safe harbour limit pre-trial costs, injunctions and penalties for non-compliance with injunctions?
  4. Provided that injunctions are allowed in principle, is an injunction prescribing a) the termination of the Internet connection, b) the password-protection of the Internet connection and c) the examination of all communications passing through that connection compatible with the EU law?
AG Szpunar provides guidance with respect to all of them and does not shy away from discussing some more subtle and critical issues of the E-Commerce Directive. The overall message of the opinion is clearly against imposition of the proposed measures to open wireless. But let's have a look on what AG has to say question-by-question.

1. Is provision of open WiFi covered by ECD? Answer: Yes!

41.      In my view, where, in the course of his business, an economic operator offers Internet access to the public, even if not against payment, he is providing a service of an economic nature, even if it is merely ancillary to his principal activity.
42.      The very operation of a Wi-Fi network that is accessible to the public, in connection with another economic activity, necessarily takes place in an economic context.
43.      Access to the Internet may constitute a form of marketing designed to attract customers and gain their loyalty. In so far as it contributes to the carrying on of the principal activity, the fact that the service provider may not be directly remunerated by recipients of the service is not decisive. In accordance with consistent case-law, the requirement for pecuniary consideration laid down in Article 57 TFEU does not mean that the service must be paid for directly by those who benefit from it. (13)
48.      In my opinion, the provision of Internet access in such circumstances takes place in an economic context, even if it is offered free of charge.
 2. Is provision of open WiFi covered by Art. 12? Answer: Yes!
65.      In accordance with Article 12(1)(a) to (c), this limitation of liability takes effect provided that three cumulative conditions are fulfilled: the provider of the mere conduit service must not have initiated the transmission, must not have selected the recipient of the transmission and must not have selected or modified the information contained in the transmission.
66.      According to recital 42 of Directive 2000/31, the exemptions from liability solely cover activities of a merely technical, automatic and passive nature, which implies that the service provider has neither knowledge of nor control over the information that is transmitted or stored.
67.      The questions referred by the national court are based on the assumption that those conditions are fulfilled in the present case.
97.      Article 12(1)(a) to (c) of Directive 2000/31 makes the limitation of the liability of a provider of mere conduit services subject to certain conditions that are cumulative and also exhaustive. (24) The addition of further conditions for the application of that provision seems to me to be ruled out by its express terms.

 3. What kind of liability does Art. 12 not shield from? Answer: liability for injunctions and for penalties arising from non-compliance with them
64.      As is apparent from the preparatory work for that legislative act, the limitation of liability in question extends, horizontally, to all forms of liability for unlawful acts of any kind, and thus to liability under criminal law, administrative law and civil law, and also to direct liability and secondary liability for acts committed by third parties. (19)
68.      I would observe that it is clear from a combined reading of paragraphs 1 and 3 of Article 12 of Directive 2000/31 that the provisions in question limit the liability of an intermediary service provider with respect to the information transmitted, but do not shield him from injunctions.
69.      Equally, according to recital 45 of Directive 2000/31, the limitations of the liability of intermediary service providers do not affect the possibility of injunctive relief, which may, in particular, consist of orders by courts or administrative authorities requiring the termination or prevention of any infringement.
73.      I would recall that Article 12(1) of Directive 2000/31 limits the civil liability of intermediary service providers and precludes actions for damages based on any form of civil liability. (20)
74.      In my opinion, that limitation of liability extends not only to claims for compensation, but also to any other pecuniary claim that entails a finding of liability for copyright infringement with respect to the information transmitted, such as a claim for the reimbursement of pre-litigation costs or court costs.
76.      Pursuant to Article 12 of Directive 2000/31, a provider of mere conduit services cannot be held liable for a copyright infringement committed as a result of the information transmitted. Therefore, he may not be ordered to pay pre-litigation costs or court costs incurred in connection with that infringement, which cannot be imputed to him.
This is a very important holding for the German practice. It basically precludes pre-trial reimbursement of cease and desist letters (Abmahnungskosten) against safe harbours-covered intermediaries. This leads to the most significant change for mere conduits who don't lose the safe harbours even after obtaining knowledge. Not only can this holding disrupt the industry of cease and desist letters against the operators of open WiFis in Germany, but after the BGH admitted the possibility of website blocking injunctions, this holding can significantly limit pre-trial risk of the Internet access providers in Germany. If accepted by the Court, ISPs could basically wait until they are sued, as is currently the case in the UK, since Stoererhaftung is blocked from leading to any important (pecuniary) consequences. I have argued for this solution in my PhD thesis [which is in the process of being turn into a book], so I am naturally very happy to see it formulated by the AG explicitly like this. It remains to be seen if the CJEU follows this suggestion.  
77.      I would also observe that the making of an order to pay the pre-litigation costs or court costs relating to such an infringement could compromise the objective pursued by Article 12 of Directive 2000/31 of ensuring that no undue restrictions are imposed on the activities to which it relates. An order to pay pre-litigation costs or court costs could potentially have the same punitive effect as an order to pay damages and could in the same way hinder the development of the intermediary services in question.
78.      Admittedly, Article 12(3) of Directive 2000/31 provides for the possibility of a court or administrative authority imposing certain obligations upon an intermediary service provider following the commission of an infringement, in particular by means of an injunction.
79.      However, given the provisions of Article 12(1) of that directive, a judicial or administrative decision imposing certain obligations on a service provider may not be based on a finding of the latter’s liability. An intermediary service provider cannot be held liable for failing to take the initiative to prevent a possible infringement or for failing to act as a bonus pater familias. He may incur liability only after a specific obligation contemplated by Article 12(3) of Directive 2000/31 has been imposed on him.
This is a very important line of the judgement. However, one should note that it is limited by the fact that injunctions can be imposed by the administrative authority or the court. Still, however, it confirms that "punishing" a safe-harbour-compliant intermediary is limited by the E-Commerce Directive in general. And given that injunctions based on Art. 8(3) InfoSoc have their own limitations that distinguish them from injunctions against infringers, the consequences are substantial especially for some countries. I particularly like the fact that AG has considered the issues in the context and explicitly foresees that possible penalties for injunction-non-compliance (e.g. for not respecting a website blocking injunction) should not be covered (§ 90). This is the only sensible policy since otherwise intermediaries could easily disrespect injunctions issued against them. Again, something I also argued in my PhD thesis. 
80.      In the present case, in my view, Article 12(1) of Directive 2000/31 therefore precludes the making of orders against intermediary service providers not only for the payment of damages, but also for the payment of the costs of giving formal notice or other costs relating to copyright infringements committed by third parties as a result of the information transmitted.
4. Can the measures of access termination / password-locking / surveillance be imposed on an operator of open WiFi? Answer: No

115. In the light of those considerations, national courts must, when issuing an injunction against an intermediary service provider, ensure:
–        that the measures in question comply with Article 3 of Directive 2004/48 and, in particular, are effective, proportionate and dissuasive,
–        that, in accordance with Articles 12(3) and 15(1) of Directive 2000/31, they are aimed at bringing a specific infringement to an end or preventing a specific infringement and do not entail a general obligation to monitor,
–        that the application of the provisions mentioned, and of other detailed procedures laid down in national law, achieves a fair balance between the relevant fundamental rights, in particular, those protected by Articles 11 and 16 and by Article 17(2) of the Charter.
116. The national court asks whether Article 12 of Directive 2000/31 precludes injunctions which contain prohibitions formulated in general terms and leave it to the addressee of the injunction to determine what specific measures should be adopted.
Here the AG starts making an attempt to limit CJEU's UPC Telekabel decision.
117. The measure envisaged in the main proceedings consists in an order requiring the intermediary service provider to refrain in the future from enabling third parties to make a particular protected work available for electronic retrieval from an online exchange platform via a specific Internet connection. The question of what technical measures are to be taken remains open.
118. I would observe that a prohibitory injunction that is formulated in general terms and does not prescribe specific measures is potentially a source of significant legal uncertainty for the addressee thereof. The fact that the addressee will be entitled, in any proceedings concerning alleged failure to comply with such an injunction, to show that he has taken all reasonable measures does not entirely remove that uncertainty.
119. Moreover, given that determining what measures it is appropriate to adopt entails striking a fair balance between the various fundamental rights involved, that task ought to be undertaken by a court, rather than left entirely to the addressee of an injunction. (33)
120. Admittedly, the Court has already held that an injunction addressed to a provider of Internet access which leaves it to the addressee to determine what specific measures should be taken is, in principle, consistent with EU law. (34)
121. That solution was based, in particular, on the consideration that an injunction formulated in general terms had the advantage of enabling the addressee to decide which measures were best adapted to his resources and abilities and compatible with his other legal obligations. (35)
122. However, it does not seem to me that that reasoning can be applied in a case, such as the case in the main proceedings, in which the very existence of appropriate measures is the subject of debate.
123. The possibility of choosing which measures are most appropriate can, in certain situations, be compatible with the interests of the addressee of an injunction, but it is not so where that choice is the source of legal uncertainty. In such circumstances, leaving it entirely to the addressee to choose the most appropriate measures would upset the balance between the rights and interests involved.
124. I therefore consider that, whilst Article 12(3) of Directive 2000/31 and Article 8(3) of Directive 2001/29 do not, in principle, preclude the issuing of an injunction which leaves it to the addressee thereof to decide what specific measures should be taken, it nevertheless falls to the national court hearing an application for an injunction to ensure that appropriate measures do indeed exist that are consistent with the restrictions imposed by EU law.
This is a very clever suggestion to limit the UPC Telekabel ruling and substantially addresses the criticism that surrounded CJEU's approach. If there is no certainty that fundamental-rights-compliant measures to achieve the goal of an injunction do exist, then the court should not simply grant any injunction. It would be irresponsible to do so, as otherwise the courts would risk obliging to outcomes that have no implementations that are human-rights-complaint. I strongly agree that this outcome is impossible to reconcile with the EU Charter, since the courts cannot simply leave such scrutiny out of their hands just with a simple pointer to flexibility gains for injunction-addressees (the fact that they can choose the measures). Any other approach would basically allow also very easy circumvention of the holdings of the CJEU in Scarlet Extended or Sabam.
130. I consider that, in the present case, the inconsistency with EU law of the first and third hypothetical measures mentioned by the national court is immediately evident.
131. Indeed, a measure which requires an Internet connection to be terminated is manifestly incompatible with the need for a fair balance to be struck between the fundamental rights involved, since it compromises the essence of the freedom to conduct business of persons who, if only in ancillary fashion, pursue the economic activity of providing Internet access. (39) Moreover, such a measure would be contrary to Article 3 of Directive 2004/48, pursuant to which a court issuing an injunction must ensure that the measures imposed do not create a barrier to legitimate trade. (40)
The reference to the essence of a right is very crucial here. As Miquel and I have argued in our paper on disconnecting injunctions, since even the administrative three-strikes regimes are implementations of the EU law - usually of Art. 8(3) of the InfoSoc, they also underlie the same limits. If the CJEU accepts this reasoning, the court's holding will substantially limit availability of the three-strike schemes under the national laws.
132. In so far as concerns a measure requiring the owner of an Internet connection to examine all communications transmitted through that connection, that would clearly conflict with the prohibition on imposing a general monitoring obligation laid down in Article 15(1) of Directive 2000/31. Indeed, in order to constitute a monitoring obligation ‘in a specific case’, (41) such as is permitted under Article 15(1), the measure in question must be limited in terms of the subject and duration of the monitoring, and that would not be the case with a measure that entailed the examination of all communications passing through a network. (42)
d)      The compatibility of an obligation to make Wi-Fi networks secure
137. I would observe that an obligation to make access to such a network secure would potentially meet with a number of objections of a legal nature.
138. First of all, the introduction of a security obligation could potentially undermine the business model of undertakings that offer Internet access as an adjunct to their other services.
139. Indeed, some such undertakings would no longer be inclined to offer that additional service if it necessitated investment and attracted regulatory constraints relating to the securing of the network and the management of users. Furthermore, some users of the service, such as customers of fast-food restaurants or other businesses, would give up using the service if it involved a systematic obligation to identify themselves and enter a password.
140. Secondly, I would observe that imposing an obligation to make a Wi-Fi network secure entails, for persons who operate that network in order to provide Internet access to their customers and to the public, a need to identify users and to retain their data.
141. In this connection, Sony Music states in its written observations, that, in order to be able to impute an infringement to a ‘registered user’, the operator of a Wi-Fi network would need to store the IP addresses and the external ports through which registered users have established an Internet connection. Identifying users of a Wi-Fi network essentially corresponds to the allocation of IP addresses by an access provider. The operator of the Wi-Fi network could therefore use a computer system, which would not be very costly, according to Sony Music, to enable it to register and identify users.
142. I would observe that obligations to register users and to retain their private data fall within the scope of the regulations governing the activities of telecoms operators and other Internet service providers. The imposition of such administrative constraints seems to me to be clearly disproportionate, however, in the case of persons who offer their customers and potential customers access to the Internet via a Wi-Fi network as an adjunct to their principal activity.
143. Thirdly, although an obligation to make a Wi-Fi network secure that is imposed in a particular injunction is not the same as a general obligation to monitor information or actively to seek facts or circumstances indicating illegal activities, such as is prohibited by Article 15 of Directive 2000/31, any general obligation to identify and register users could nevertheless lead to a system of liability applicable to intermediary service providers that would no longer be consistent with that provision.
144. Indeed, in the context of prosecuting copyright infringements, network security is not an end in itself, but merely a preliminary measure that enables an operator to have a certain degree of control over network activity. However, conferring an active, preventative role on intermediary service providers would be inconsistent with their particular status, which is protected under Directive 2000/31. (47)
145. Fourthly, and lastly, I would observe that the measure at issue would not in itself be effective, and thus its appropriateness and proportionality remain open to question.
146. It must also be observed that, given the ease with which they may be circumvented, security measures are not effective in preventing specific infringements of protected works. As the Commission states, the use of passwords can potentially limit the circle of users, but does not necessarily prevent infringements of protected works. Moreover, as the Polish Government observes, providers of mere conduit services have limited means with which to follow exchanges of peer-to-peer traffic, the monitoring of which calls for the implementation of technically advanced and costly solutions about which there could be serious reservations concerning the protection of the right to privacy and the confidentiality of communications.
147. Having regard to all of the foregoing considerations, I am of the opinion that the imposition of an obligation to make access to a Wi-Fi network secure, as a means of protecting copyright on the Internet, would not be consistent with the requirement for a fair balance to be struck between, on the one hand, the protection of the intellectual property rights enjoyed by copyright holders and, on the other, that of the freedom to conduct business enjoyed by providers of the services in question. (48) By restricting access to lawful communications, the measure would also entail a restriction on freedom of expression and information. (49)
148. More generally, I would observe that any general obligation to make access to a Wi-Fi network secure, as a means of protecting copyright on the Internet, could be a disadvantage for society as a whole and one that could outweigh the potential benefits for rightholders.
149. First, public Wi-Fi networks used by a large number of people have relatively limited bandwidth and are therefore not particularly susceptible to the risk of infringement of copyright protected works and objects. (50) Secondly, Wi-Fi access points indisputably offer great potential for innovation. Any measures that could hinder the development of that activity should therefore be very carefully examined with reference to their potential benefits.
Although I could imagine that AG could put forward even stronger arguments against WiFi password-locking, the opinion is definitely convincing as it stands. For my personal reasons, I would refer the reader to our letter to the Court

Let's hope that the Court will follow the suggestions of AG Szpunar, at least in its most important aspects!

Wednesday, March 9, 2016

A Copyright Story of An Infamous Book

The New Years Eve's fireworks again announced enlargement of our public domain. Works of Malcom X, T.S.Eliot, Winston Churchill became copyright-free, at least in some countries. The popular media reported extensively on bittersweet coocurrence of Anne Frank's and Adolf Hitler's copyright expiration (again, not world-wide). With a notable exception of Der Spiegel that published a fantastic historical account of "Mein Kampf" (2/2016, "Das Monstrum", p. 107), I found surprisingly little coverage of copyright story of Hitler's barbaric propaganda piece. Some readers might be surprised, but the story is also a potential source of numerous lessons and/or open questions for even today's copyright.

Most of the readers will know that it was the Bavarian state that has hold copyright to Hitler's well-known propaganda piece until 1st of January. Since the city of Munich happened to be the cradle of Hitler's rise to power, "the capital of the movement" - as Nazis used to call it, the state felt especially strong about protecting public from Hitler's ideas. But how did copyright end up with the Bavarian state to begin with? Could it enforce it everywhere? Why copyright could not help to stop the distribution of the book in the United States? And what has happened to Hitler's royalties during the war? Those are all very fascinating copyright questions that made me to research this topic little bit on my own.

It was 30 April 1945, 2 pm when American troops arrived at Munich's Marienplatz. They were surprised to meet no resistance "in the capital of the movement". The city was left almost completely undefended and troops were even welcomed as liberators. Some thirty minutes later, few hundred kilometers north, at the place which is now an inconspicuous Berlin parking lot, Adolf and Eva Hitler are just entering their personal study. One hour later, their bodies are found dead following a gunshot. The copyright clock over Hitler's "Mein Kampf" starts ticking.

Several days later, OMGUS, Office of Military Government, United States, assumes its role over occupied territory, including the Bavarian state. One of its important roles is to help with denazification of the occupied territories. To improve the efficiency of the efforts, OMGUS decides to involve Germans more in the process. In order to achieve this, Act No. 104 for Liberation from National Socialism and Militarism (so called Befreiungsgesetz) is passed. On 5th of March 1946, the Act is signed just at the Marienplatz, in the Munich Rathaus

In its Art. 37, the Liberation Act foresees a mechanism of confiscation of estates of deceased persons who were major offenders or offenders during the war (see below).

Two years after the Act is passed, on 5th of July 1948, the application for seizure of Adolf Hitler's property lands before a Munich court - Spruchkammer München I.. The application is very brief (see below). Clearly, many things should be obvious to judges. The jurisdiction of the court is based on Hitler's last official domicile - Prinzregentenplatz 16. The seizure should apply to all "the estate residing in the state of Bavaria" ("Der im Lande Bayern gelegene Nachlass"). 

On 15th of October of the same year, the court decides in favor of the application (Az 3568/48).

Adolf Hitler is recognized by the court as "major offender" in sense of Art. 5 and his property will be subject to measures of atonement (Sühnemaßnähmen) foreseen in Art. 15(2) of the Act. This provision allows following measure to take place:

Gegen Hauptschuldige sind folgende Sühnemaßnähmen zu verhängen: 2. ihr Vermögen ist als Beitrag zur Wiedergutmachung einzuziehen. Es ist nur der Betrag zu belassen, der unter Berücksichtigung der Familienverhältnisse und der Erwerbsfähigkeit zum notdürftigen Lebensunterhalt erforderlich ist. Sie unterliegen laufenden Sonderabgaben zu einem Wiedergutmachungsfond, soweit sie Einkommen beziehen;
In translation,

On 24th January 1949, the decision becomes binding and the property is officially seized. Hitler's copyright is not specifically mentioned in the decision (see below), but for the years to come, it will be generally understood by the (German) courts as covered by the following verdict.   

From today's legal perspective, this decision is also interesting because it effectively constitutes an IP expropriation which would have to be justified against both international public law of intellectual property, but also increasingly against the fundamental rights provisions, such as Art. 17 of the EU Charter or Art. 1 of the Protocol Nr. 1 of the ECHR, that (constitutionally) protect copyright as a form of property.

In the upcoming years, the Bavarian state started using acquired copyright protection in order to prohibit circulation of the book not only in Germany (e.g. OLG München, 29 U 1204/12), but around the world (e.g. in Croatia, Sweden, etc.). The copyright became one of the main weapons against the distribution because unlike criminal laws related to regulation of hate speech, copyright is universally accepted. So even in the countries where free speech would be very strong, the Bavarian state could stop the distribution based on copyright grounds.

I personally find the use of the copyright by the Bavarian state very troubling. Consider that the very same mechanism could be used even today in less democratic countries to silence the authors themselves. You just need to confiscate their copyright, or acquire it from their publisher, and then use it to tape their mouth. Instead of using some public repression, you can easily stop dissemination of the author's ideas by means of his/her own copyright.

The reason why this copyright strategy did not work in the United States has nothing to do with its strong tradition of freedom of speech. The reasons were more pragmatic. Adolf Hitler licensed his book before the war to Reynal & Hitchcok publishers. Until 1942, they have sold around 283.000 copies in the United States alone.

If you think it is a lot, then maybe you will be surprised to learn that in 1933, according to Der Spiegel, the book has sold over 1.5 million copies in Germany alone. At the end of the war, the number of copies in the circulation was already unbelievable 12 millions. Interestingly, when in 1942, the alien property custodian Leo Crowley seized "american" copyright covering Hitler's Mein Kampf, the publisher was owing him and/or his German publisher over $30.000 in licensing fees. This is because the last payout took place on 1st of September 1939. Yes, exactly on the day when Hitler invaded Poland and the Second World War officially began (mind boggling!). The law that allowed the seizure of Hitler's copyright license in the United States - Trading with the Enemy Act - is still valid even todayAfter the war, the US government did not rush to return seized property and kept collecting the royalties. The War Claims Fund collected $139,000 between 1942 and 1979.

Although after 1945 many Germans destroyed their books to prevent any 'Nazi-appearance', availability of old copies in antique stores soon became an issue. As you might guess, owing to exhaustion doctrine, the Bavarian state could not prohibit their distribution on the copyright grounds. This is why alternative solutions had to be sought and the attempts were made to make the distribution of the book a criminal act. However, already in 1979, the German Federal Supreme Court decided that distribution of unaltered copies originating from time before the 1949-Constitution does not constitute an act of crime (3 StR 182/79). Around the same time in the United States, Houghton Mifflin bought the confiscated licensing rights to "Mein Kampf" from the US government for $37,254. According to estimates, the sale of the book could have earned Houghton Mifflin $300.000-700.000 over the years. In 2010, after coverage in the news, the publisher promised to donate the royalties to charity.

All these developments rise many interesting questions: What is the IP maneuvering space available to states in times of war? What are the constitutional requirements for an IP expropriation? Does the expropriation of rights in one country affect also the copyright status of the work in other countries? 

Sounds academic? Well, it seems that at least in one country the Bavarian state had difficulties to convince the judges of its copyright ownership. It was reported that in 1998, the Swedish Supreme Court rejected to recognize the Bavarian state as a copyright holder of Mein Kampf. Although the lower Swedish courts accepted Bayern's standing to sue, the Supreme Court (B 4367-97, 21 December 1998) seemed to have doubts about possibility to recognize the seizure under the Swedish copyright law. According to the German translation of the decision published in GRUR (GRUR Int 1999, 625), the Swedish Supreme Court opined that initial ownership should be decided based on the law of the country for which the protection is sought (lex loci protectionis) - i.e. Swedish law. And since the German seizure of copyright is not compatible with the Swedish copyright law, it could not have been recognized. Interestingly, the Court stated that after the death of Adolf Hitler, his "Swedish" copyright was inherited by his statutory or testamentary heirs (the Court did not discuss this, but Hitler actually left a testament, but this was found invalid by German courts due to lack of prescribed legal form; potential statutory heir could have been his sister who was attempting to enter also the seizure proceedings). 

Seizure of copyright is certainly one of the strongest public interference's the state can exercise over copyrighted works. It should not be impossible completely, I would argue, but apart from the constitutional admissibility, it is questionable how far should the act of one state obtain its recognition abroad. If the Chinese government, for instance, tomorrow expropriates Ai Wei Wei, one of its prominent dissidents, I doubt that European or US courts would accept the copyright transfer even if the Chinese law would somehow apply to the question of initial ownership. They can, of course, always use "ordre public" doctrine to deny any recognition to such acts.

The Swedish case raises a question whether in absence of a testament, the copyright today should be really inherited always separately according to law of the country where the protection is sought. The results seems too harsh to me. The question of law applicable to initial ownership is usually disputed in the context of living authors who might have created their works in the context of employment in another country (e.g. Itar-Tass Russian News Agency v Russian Kurier). It is a question unresolved by the Berne Convention (See Jane C. Ginsburg, Ownership of Electronic Rights and the Private International Law of Copyright, 22 Colum.-VLA J.L. & Arts 165, 167-68 (1998) (The Berne Convention “provides that the law of the country where protection is claimed defines what rights are protected, the scope of the protection, and the available remedies;  the treaty does not supply a choice of law rule for determining ownership.”)). The Swedish example is special because it involves confiscated copyright that would have been otherwise inherited. If readers are aware of more discussion of the case in the literature, I would be very interested to hear about it.

Apart from the Swedish case, the international private law aspect also became decisive in a Croatian case - Freistaat Bayern v Croatijaknigaa doo (the Commercial Court in Zagreb, P-2946/2007). Here the Bavarian state tried to argue that their German copyright allows them to pursue action in Croatia, even though the rights under Croatian law already expired. The Croatian court concluded, in line with Art. 7(8) of the Berne Convention, that the law of the country for which the protection is sought decides on the length of granted protection. As a consequence, the Bavarian state could not prohibit dissemination of the book in Croatia. 

Since 1 January 2016, this is also the case in Germany. The Institute für Zeitgeschichte choose this to be the moment for its release of a critical academic commentary on "Mein Kampf" that, by analyzing the text and other historical documents, tries to answer questions like a) how did his theses arise? b) what aims was he pursuing in writing Mein Kampf? c) what social support did Hitler’s assertions have among his contemporaries? d) what consequences did his claims and asseverations have after 1933? e) and in particular: given the present state of knowledge, what can we counterpose to Hitler’s innumerable assertions, lies and expressions of intent?

Just in time, given the clouds of hatred and extremism that are settling above the beautiful European continent.

Sunday, November 29, 2015

BGH Accepts Website Blocking Injunctions

Just on this Thursday, the German Federal Supreme Court issued a press release informing that it has decided two long-excepted website blocking cases (I ZR 3/14, I ZR 174/14). Although we still have to wait couple of months for the text of the decision, there are several interesting aspects that are clear already:
  • First, the Court accepted privately litigated IP website-blocking in Germany. Even more, the Court - similarly as the Austrian Supreme Court in UPC Telekabel and the English High Court in Cartier v Sky - recognized that the availability of this remedy is compulsory under Art. 8(3) InfoSoc Directive. 
  • Second, the Court has effectively corrupted its own previous case-law on adequately-causal contribution to the infringements, since it seems to claim that even an access provider contributes to infringements of third parties. The German scholars who (for many good reasons) argued that Stoererhaftung converges with the tort-law might get unpleasantly surprised by this proposition. Just try to imagine that this broadly read adequate-causality is one day implemented in tort-law ..
  • Third, the Court seems to have decided that the injunction is only reasonable if the access provider is the last enforcement resort, i.e. the right holders tries to enforce his rights against the real infringers first (websites or its hosts) or if such direct enforcement seems without any success from the outset ("Nur wenn die Inanspruchnahme dieser Beteiligten scheitert oder ihr jede Erfolgsaussicht fehlt und deshalb andernfalls eine Rechtsschutzlücke entstünde, ist die Inanspruchnahme des Access-Providers als Störer zumutbar."). For these purposes, the right holder should take all reasonable steps, including commissioning of the investigation by a specialized firm or instituting an investigation before the state authorities ("Bei der Ermittlung der vorrangig in Anspruch zu nehmenden Beteiligten hat der Rechtsinhaber in zumutbarem Umfang - etwa durch Beauftragung einer Detektei, eines Unternehmens, das Ermittlungen im Zusammenhang mit rechtswidrigen Angeboten im Internet durchführt, oder Einschaltung der staatlichen Ermittlungsbehörden - Nachforschungen vorzunehmen."). Since this effort could not have been shown in these cases, the Court eventually rejected the injunction.
  • Fourth, unlike the Dutch court(s), BGH seems to fully follow the CJEU on the low requirement for the effectiveness of the website blocking measures.
Above all, I am really curious how the Court will make this operational in the German context where claims for injunctions have their consequences even prior to a court decision, so the obligation of the access provider to block would be usually created prior to an order (upon a cease and desist letter). If this would be the case, huge potential issues with the freedom of expression of the users and website owners lie ahead. Stay tuned!

Wednesday, October 28, 2015

New CJEU Case On Injunctions Against an Operator of an (Offline) Marketplace

UKIPO informs that the Supreme Court of the Czech Republic just referred the following questions to the Court of Justice of the European Union (Tommy Hilfiger Licensing C-494/15):

Is a person with a lease of premises in a market, who provides stalls and pitches on which stalls may be placed to individual market-traders for their use, an intermediary whose services are used by a third party to infringe an intellectual property right within the meaning of Article 11 of Directive 2004/48/EC of the European Parliament and of the Council of 29 April 2004 on the enforcement of intellectual property rights?

Is it possible to impose on a person with a lease of premises in a market, who provides stalls and pitches on which stalls may be placed to individual markettraders for their use, measures, as provided for in Article 11 of Directive 2004/48/EC of the European Parliament and of the Council of 29 April 2004 on the enforcement of intellectual property rights, under the same conditions as those formulated by the Court of Justice in its judgment of 12 July 2011 in Case C-324/09 L’Oréal and Others v eBay and Others with regard to the imposition of measures on the operators of an online marketplace?
This sounds like a very interesting case. The website of the Czech Supreme Court unfortunately does not contain any detailed information at this point, so I need to file a formal request for information. I will report more details as soon as I obtain them. In any case, from the questions referred, I consider the second to be a more interesting one. Unlike some other esteemed colleagues, I don't have a slightest doubt that the CJEU will accept that even an operator of an offline market place is an intermediary in sense of Art. 11 of the Enforcement Directive. In Frisdranken, one of the Advocates General already accepted that even an offline intermediary such as technical manufacturer who fills cans with the beverage can be seen as such an intermediary.

Stay tuned!

Friday, September 18, 2015

Personal Update (Blogging Continues)

Dear readers,
as you might have noticed, the last couple of months were rather quiet on this blog. But don't worry, I am still alive (actually, more sporty than ever!) and plan to continue blogging. It was just the time of running my doctoral thesis finish line, which 'sucked' all my free time and sometimes even my usual craving to write. The thesis was submitted and when the resulting publication is out, I will surely let you know. In any case, the big news is that beginning the next month, I am moving on to a new academic role and thus step-by-step even to a new country. I will be joining the great team of researchers at the University in Tilburg in the Netherlands, where I was offered the position of Assistant Professor in Intellectual Property as a joint appointment of the Tilburg Institute for Law, Technology and Society (TILT) and the Tilburg Law and Economics Center (TILEC). So, of course, I will continue to focus on technologies, intellectual property and innovation.
Please stay tuned!
Best Wishes from Tokyo,

Thursday, July 9, 2015

BGH: (Some) Framing Does Not Infringe Copyright

Following BestWater C-348/13 preliminary reference, the German Federal Supreme Court today decided that the framing of a third party content does not amount to copyright infringement in the situations when the content was authorized on the source. The Court, however, explicitly left open what happens if the source is not authorized, referring to the pending CJEU case of GS Media C-160/15 (although its reading seems to be that such constellation would lead to an infringement). So far, only the press release is available.

Interestingly enough, the Court also seem to have considered the question I posed on this blog just after BestWater decision was handed by the CJEU. Namely, may the German court provide for exclusive rights beyond the European Union law? The German Federal Supreme Court seems to think it may not. Here is what the PR says:

"Eine solche Verknüpfung verletzt auch bei einer im Blick auf Art. 3 Abs. 1 der Richtlinie 2001/29/EG zur Harmonisierung bestimmter Aspekte des Urheberrechts und der verwandten Schutzrechte in der Informationsgesellschaft*** gebotenen richtlinienkonformen Auslegung des § 15 Abs. 2 UrhG* grundsätzlich kein unbenanntes Verwertungsrecht der öffentlichen Wiedergabe."
This can be roughly translated as follows:

"Such a link, in the view of Article 3 para. 1 of Directive 2001/29/EC and the required Union-conform interpretation, also does not infringe any unnamed exploitation right of public communication based on § 15 Abs. 2 German Copyright Act ."
This could (we need to see the full text first) mean the German Federal Supreme Court is reading the second part of the Svensson ruling as pre-empting extension of such national exploitation rights; the reading that I advocated several times on this blog.