EU Court Rules Unlawful to Sell Streaming Boxes with Piracy Add-Ons

The Court of Justice of the European Union (CJEU) has made an important judgment relating to copyright and the use of the internet. It comes with the long-awaited decision for Filmspeler, C-527/15. The background for this case is highly specific: sale of multimedia players enabling free access to audiovisual works protected by copyright without the consent of the rightholders. However, the impact will be much wider for the following reasons.

  • First, the Court relaxed the notion of what amounts to an ‘indispensable intervention (the judgment does not even contain a reference to the intervention being ‘indispensable’) for the sake of the right of communication to the public within Article 3(1) of the InfoSoc Directive. This means that a broader group of defendants might be now regarded as primarily liable for unauthorized acts of communication to the public.
  • Secondly, the Court held that streaming unlicensed content can amount to copyright infringement, on consideration that the mandatory exemption for temporary copies within Article 5(1) of the InfoSoc Directive would not be applicable. This paves the way to holding not only those who provide unlawful streams, but also viewers of such streams, liable for copyright infringement.

Let’s take a closer look at both issues.

Construction of the right of communication to the public

The first issue for the Court to address was whether the concept of ‘communication to the public’ 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 rightholders.

As usual, the CJEU recalled at the outset that the right of communication to the public, which is preventive in nature, must be interpreted broadly. This is so in order to fulfill one of the objectives of the InfoSoc Directive, ie to grant authors a ‘high level of protection’.

Provided that an act of communication to the public requires (1) an act of communication directed (2) to a public, what actually amounts to an act of communication to the public also requires an individual assessment and taking into account several complementary criteria. These – as the CJEU noted in GS Media – are not autonomous and are interdependent, and must be applied both individually and in their interaction with one another.

At para 31 of the Filmspeler decision the Court recalled that among such criteria, there is…

…the essential role played by the user. The user makes an act of communication when he intervenes, in full knowledge of the consequences of his action, to give access to a protected work to his customers and does so, in particular, where, in the absence of that intervention, his customers would not, in principle, be able to enjoy the broadcast work.

In his Opinion in GS Media, Advocate General (AG) Wathelet embraced a narrow understanding of what amount to such an ‘essential role’ or ‘indispensable intervention’. The AG held the view that links posted on a website that direct to copyright works freely accessible on another website cannot be classified as an ‘act of communication’. The intervention of the operator of the website that posts the hyperlinks is not indispensable to the making available of the works in question to users. The CJEU did not go as far as AG Wathelet. However, it ‘limited’ liability for linking to unlicensed content to the situations in which:

  • The defendant has knowledge that the content linked to is unlicensed and no defence is available to him
  • The defendant operates for profit, so that he is presumed to have knowledge of the lawful/unlawful character of the content linked to, and he fails to rebut such presumption
  • The defendant’s link circumvents restrictions to access

Why Filmspeler is different

Filmspeler is different. Although possibly a natural evolution of GS Media and preceding case law, it seemingly broadens the framework of liability. This is essentially because the intervention needed to fall within the scope of Article 3(1) does not require to be strictly indispensable; mere facilitation seems enough.

The Court excluded that the sale of a multimedia player could be regarded as akin to the mere provision of physical facilities (this is outside the scope of Article 3(1), as Recital 27 in the preamble to the InfoSoc Directive clarifies), and concluded that the communication at hand to would be to a ‘public’.

With regard to the former, the Court noted 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, is quite different from the mere provision of physical facilities… [I]t is clear… that the streaming websites at issue in the main proceedings are not readily identifiable by the public and the majority of them change frequently.” [41]

Turning to the notion of ‘public’, the court held that there is a ‘public’ if a number (above de minimis) of persons purchases or may acquire the multimedia player in succession and has an internet connection [44 and 45; so potentially this means ‘anyone’]. The CJEU also noted that in this case the works would be communication to a ‘new public’. [47]

Having established that in the case at hand there would be a communication to a new public, the CJEU turned to GS Media, and noted that: (1) the defendant has knowledge that the content linked to is unlawful [50]; (2) the defendant has a profit-making intention.

Readers will remember that in GS Media the CJEU failed to provide guidance on how the profit-making intention criterion should be assessed: should one consider whether the relevant link is provided with the intention to make a profit? Or should rather one consider the surrounding environment to the relevant link, eg whether it is provided on a website that is operated for profit?

Although both alternatives appear plausible, consideration of the context in which the relevant link is provided appears to be more in line with earlier CJEU case law and, now, Filmspeler.

In both SGAE and FAPL, in fact, the Court considered that the profit-making nature of the communication was apparent from the fact that the defendants transmitted the relevant works in their own establishment (hotels and a public house, respectively) in order to benefit therefrom and to attract customers to whom the works transmitted are of interest.

Similarly, in Filmspeler the profit-making intention subsists because “the multimedia player is supplied with a view to making a profit, the price for the multimedia player being paid in particular to obtain direct access to protected works available on streaming websites without the consent of the copyright holders… [T]he main attraction of such a multimedia player for potential purchasers lies precisely in the fact that add-ons are pre-installed on it which enable users to gain access to sites on which copyright-protected films are made available without the consent of the copyright holders.” [51]

Streaming of unlicensed content

The next, topical, issue to address was whether the streaming of unlicensed content could result in liability infringement of the right of reproduction or could be, instead, excused under the exemption for temporary copies within Article 5(1) of the InfoSoc Directive.

The exemption within Article 5(1) is subject to five cumulative conditions that must be interpreted strictly: (1) the act of reproduction is temporary; (2) it is transient or incidental; (3) it is an integral and essential part of a technological process; (4) the sole purpose of that process is to enable a transmission in a network between third parties by an intermediary or a lawful use of a work or protected subject matter; and (5) that act does not have any independent economic significance.

In addition, Article 5(1) is subject to the three-step test in Article 5(5).

The CJEU held that the acts of reproduction at issue do not relate to a lawful use of copyright works, also because the main attraction of Filmspeler’s player is the pre-installation of the add-ons. In addition, and as a consequence, the resulting temporary acts of reproduction are such as to adversely affect the normal exploitation of those works and causes unreasonable prejudice to the legitimate interests of the right holder [71].

Comment

As mentioned, the background proceedings in Filmspeler relate to a very specific factual background, so I expected that the resulting CJEU decision could have limited impact. This does not seem to be the case.

As regards the construction of communication to the public, two main aspects are worth noting.

First, that facilitation is seemingly akin to intervention, which arguably does not even need to be ‘indispensable’. This makes me think when the CJEU decides Ziggo, it will follow AG Szpunar and hold that a subject like The Pirate Bay makes acts of communication to the public, and is primarily liable for copyright infringement.

In the immediate aftermath of the AG Opinion in Ziggo and the CJEU decision in Filmspeler some commentators have submitted that the CJEU has de facto harmonised secondary liability, ie an area of copyright that has not been formally harmonized at the EU level. That might be true, but it is important to note that not all EU Member States envisage a secondary liability regime for copyright infringement.

The second aspect is that after Filmspeler it should be clear that one’s own profit-making intention should be appreciated in relation to the context, ie surrounding environment, in which the allegedly infringing act takes place, rather than whether the actual act of infringement is motivated by a profit-making intention. This, as seen from the early national applications of GS Media (particularly in Sweden and Germany), should broaden the situations of prima facie infringement.

Turning to liability for unlawful streaming, just a few weeks ago the Derbyshire Council Trading Standards in the UK submitted that streaming unlicensed content would not give rise to liability. After Filmspeler, this no longer seems true.

Although there might be a discussion as to whether the acts of reproduction are actually made by the viewer (rather than the site that hosts the stream), it appears that now the case of unlawful streams is fully comparable to that of unlawful downloads. In fact, the reasoning of the CJEU in Filmspeler closely resembles that in ACI Adam, ie the case concerning whether unlawful downloads of copyright works could be covered by the private copying exception.

All in all, Filmspeler is a very good victory for rightholders: this is so as far as their enforcement efforts are concerned, but also in relation to lobbying work at various levels – notably the EU and the drafting of a ‘value gap’ provision.

The original version of this article was posted on the IPKat by Eleonora Rosati. It has been reproduced under a Creative Commons CC BY 2.0 UK Licence.

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