The problem with “the pursuit of financial gain” in GS Media

Britt Dekker for Playboy

Last week's GS Media decision [here, here, here] has generated a lot of interest, and raised a number of issues.

The 1709 Blog is delighted to host a guest contribution by Kristof Neefs (Altius) on a specific point of the judgment, ie the profit-making nature of the communication at hand.

Here's what Kristof writes:

"In GS Media (C-160/15), the EU Court of Justice held that hyperlinking to content placed online elsewhere is a communication to the public of that content if the hyperlinker had (or should have had) knowledge that the content was posted online without the consent of the copyright holder (§49).  

In my opinion – and I believe this is uncontroversial – Directive 2001/29 provides no verbatim basis for this subjective criterion. It is therefore up for debate whether it was within the Court’s discretion to introduce this subjective criterion in the EU copyright acquis. In the United States, the late Justice Scalia would probably have said no. A legalist tradition opposes judicial law-making. In contrast, judge Posner argues for pragmatism in How Judges Think (2008). This leaves more room for a law-making court. In any case, the judgment is out and it is what it is.

According to the judgment, the Court had freedom of expression and information in mind with its ruling (§31). By requiring knowledge of the illegal nature of the content referred to, internet users linking to it in good faith are meant to be protected. To balance things out, however, the Court also held in §51 that knowledge that the content the link refers to is illegal must be presumed iuris tantum (i.e. until rebutted) if the posting of hyperlinks “is carried out for profit”:

“Furthermore, when the posting of hyperlinks is carried out for profit, it can be expected that the person who posted such a link carries out the necessary checks to ensure that the work concerned is not illegally published on the website to which those hyperlinks lead, so that it must be presumed that that posting has occurred with the full knowledge of the protected nature of that work and the possible lack of consent to publication on the internet by the copyright holder. In such circumstances, and in so far as that rebuttable presumption is not rebutted, the act of posting a hyperlink to a work which was illegally placed on the internet constitutes a ‘communication to the public’ within the meaning of Article 3(1) of Directive 2001/29.”

This presumption provides copyright holders with the benefit of doubt when the hyperlink is posted for financial gain. In those cases, it will be up to the hyperlinker to provide evidence that he or she did not know (or should have known) that the content was initially posted online without the consent of the copyright holder.  

The Court has, however, not elaborated on the criterion of profit and financial gain. In particular, it does not seem to consider online advertising. A great deal of blogs and websites feature per-click or per-impression advertisements to ‘monetize’ content on their blog or website. Monetize is a big word here, because in reality the income generated by these ads is just enough to cover the costs of running the blog. Do such advertisements then automatically imply that any hyperlink on the website is posted for financial gain?

I predict that this is an argument that may be run by some copyright holders, because it relieves them of the burden of proof. Some EU courts may accept this argument, especially if those copyright holders are clever in the selection of cases they will initially pursue. I also predict that the blogger who uses web advertising to finance the costs to keep a blog online (and even those that make a small profit out of it) may not have the means to escalate his or her case to the Court of Justice to obtain clarity over the criterion of “financial gain” in GS Media. That is, unless a web advertisement service operator with deep pockets would decide to lend a helping hand.

In GS Media, the Court has provided us with the means to create flowcharts or tables to determine whether a hyperlink is a copyright infringement. However, it seems that the Court has provided an answer that raises a new question: what is the meaning of the “pursuit of financial gain” in the internet context? Perhaps the phrase “commercial activity with a view to economic advantage and not as a private matter” from the Court’s judgment in Arsenal / Reed (C-206/01, §40), a trade mark case, could be helpful. Another, somewhat more vague means of interpretation could be the Recital 14 in the preamble to the Enforcement Directive 2004/48, defining acts carried out on a commercial scale as those “carried out for direct or indirect economic or commercial advantage; this would normally exclude acts carried out by end consumers acting in good faith.”

If the “pursuit of financial gain” is interpreted more broadly to cover all websites that somehow benefit financially from online advertising, I believe the Court may have missed the mark in its attempt to balance freedom of expression and the interests of copyright holders."  

Linking after GS Media ... in a table

Readers may remember that a few months ago I published a table that I had prepared for my students at the University of Southampton, attempting to summarise the position of the Court of Justice of the European Union as regards linking to protected content.

Further to this week's GS Media decision [here and here], here's an updated version of my 'linking table' [check out also this useful tool prepared and shared by Martin Husovec the same day of the GS Media decision]:

The table was originally published on The IPKat on 10 September 2016.

Reha Training and GS Media: a call for comments

Apologies for a spot of double posting, but this is a slightly slimmed down version of a post that appeared on the IPKat weblog earlier today.  Given that the readership of the two weblogs is not coterminous and that this post is of substantial interest to the copyright community, it seemed prudent to make sure that readers of the 1709 Blog got to see and, if necessary, act upon it.

Two Court of Justice of the European Union (CJEU) copyright cases are the subject of an invitation to comment, issued by the UK Intellectual Property Office as a means of evaluating whether the UK government should make observations to the court.

The first is Case C-117/15 Reha Training Gesellschaft für Sport- und Unfallrehabilitation mbH v Gesellschaft für musikalische Aufführungs- und mechanische Vervielfältigungsrechte (GEMA), a request for a preliminary ruling from the Landgericht Köln (Germany) in a case that involves a rehabilitation facility. This establishment has a number of TV screens showing various TV programmes in recreation and training rooms: these screens, and presumably the programmes shown on them, can be watched by people making use of those rooms. In the underlying action Reha Training is seeking to resist the collecting societies claim for royalties on the basis that the availability of the TV screens constitutes a “communication to the public”. The questions referred for a preliminary ruling read as follows:

Is the question as to whether there is a ‘communication to the public’ within the meaning of Article 3(1) of Directive 2001/29 [on the harmonisation of certain aspects of copyright and related rights in the information society: the InfoSoc Directive] and/or within the meaning of Article 8(2) of Directive 2006/115 [on rental right and lending right and on certain rights related to copyright in the field of intellectual property] always to be determined in accordance with the same criteria, namely that

(a) a user acts, in full knowledge of the consequences of its action, to provide access to the protected work to third parties which the latter would not have without that user’s intervention,

(b) the term ‘public’ refers to an indeterminate number of potential recipients of the service and, in addition, must consist of a fairly large number of persons, in which connection the indeterminate nature is established when ‘persons in general’ — and therefore not persons belonging to a private group — are concerned, and ‘a fairly large number of persons’ means that a certain de minimis threshold must be exceeded and that groups of persons concerned which are too small or insignificant therefore do not satisfy the criterion; in this connection not only is it relevant to know how many persons have access to the same work at the same time but it is also relevant to know how many of them have access to it in succession;

(c) the public to which the work is communicated is a new public, that is to say, a public which the author of the work did not contemplate when he authorised its use by communication to the public, unless the subsequent communication uses a specific technical means which differs from that of the original communication; and

(d) it is not irrelevant that the act of exploitation in question serves a profit-making purpose and also that the public is receptive to that communication and is not merely ‘reached’ by chance, although this is not an essential condition for the existence of a communication to the public?

In cases such as that in the main proceedings, in which the operator of a rehabilitation centre installs television sets on its premises, to which it transmits a broadcast signal and thus makes it possible for the television programmes to be viewed and heard, is the question whether there is a communication to the public to be assessed according to the concept of ‘communication to the public’ under Article 3(1) of Directive 2001/29 or under Article 8(2) of Directive 2006/115 if the copyright and related rights of a wide range of persons concerned — in particular composers, songwriters and music publishers, but also performing artists, phonogram producers and authors of literary works as well as their publishing houses — are affected by the television programmes which have been made accessible?

In cases such as that in the main proceedings, in which the operator of a rehabilitation centre installs television sets on its premises, to which it transmits a broadcast signal and thus makes television programmes accessible to its patients, is there a ‘communication to the public’ pursuant to Article 3(1) of Directive 2001/29 or pursuant to Article 8(2) of Directive 2006/115?

If the existence of a communication to the public within this meaning is confirmed for cases such as that in the main proceedings, does the Court of Justice thereby uphold its case-law according to which no communication to the public takes place in the event of the radio broadcasting of protected phonograms to patients in a dental practice (see the judgment of 15 March 2012 in SCF, C-135/10, EU:C:2012:140 or similar establishments?

Readers may be getting a slight sense of déjà vu at this point, recalling that another CJEU reference, Case C-351/12 Ochranný svaz autorský pro práva k dílům hudebním, os (OSA) v Léčebné lázně Mariánské Lázně as [noted by Eleonora for the IPKat here], dealt with a similar set of facts involving a health spa.

If you would like to advise the UK Intellectual Property Office of your opinion, which might just precipitate a British submission in these proceedings, just email [email protected] by 12 June 2015. You don't have to British to offer your thoughts -- and it probably doesn't even help if you are.

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The second is Case C-160/15 GS Media, this being a reference from the Hoge Raad der Nederlanden, The Netherlands to which the IPKat has already alluded here and here. In the underlying proceedings GS Media is a company which runs a website which allegedly infringed copyright in relation to photographs taken for a feature by publishing a hyperlink on its website that allowed the public to access those photos on an external, third party hosted site which also did not have consent to publish the photos in question. The questions asked here are these:

1(a) If anyone other than the copyright holder refers by means of a hyperlink on a website controlled by him to a website which is managed by a third party and is accessible to the general internet public, on which the work has been made available without the consent of the rightholder, does that constitute a ‘communication to the public’ within the meaning of Article 3(1) of Directive 2001/29? 

(b) Does it make any difference if the work was also not previously communicated, with the rightholder’s consent, to the public in some other way? 

(c) Is it important whether the ‘hyperlinker’ is or ought to be aware of the lack of consent by the rightholder for the placement of the work on the third party’s website mentioned in 1(a) above and, as the case may be, of the fact that the work has also not previously been communicated, with the rightholder’s consent, to the public in some other way? 

2(a) If the answer to question 1(a) is in the negative: in that case, is there, or could there be deemed to be, a communication to the public if the website to which the hyperlink refers, and thus the work, is indeed findable for the general internet public, but not easily so, with the result that the publication of the hyperlink greatly facilitates the finding of the work?

(b) In answering question 2(a), is it important whether the ‘hyperlinker’ is or ought to be aware of the fact that the website to which the hyperlink refers is not easily findable by the general internet public?

3. Are there other circumstances which should be taken into account when answering the question whether there is deemed to be a communication to the public if, by means of a hyperlink, access is provided to a work which has not previously been communicated to the public with the consent of the rightholder?

Again, if you would like to advise the UK Intellectual Property Office of your opinion, which might just precipitate a British submission in these proceedings, just email [email protected] by 12 June 2015.

BLACA - a interesting evening trying to find the new public

Last Thursday saw a packed house at the BLACA evening seminar simply titled Linking. The topic was primarily aimed at learning from the differing opinions the speakers had on the decision by the Court of Justice of the European Union in Svennson v. Retriever Sverige AB (C-466/12)(Svensson), a case that addressed the issue of hyperlinking and that ruled that the owner of a website may use hyperlinks to redirect users to copyright protected works which are freely available and accessible on another site, without the permission of the copyright owner. The 1709's first blog on this was in February 2014 here. A trio of professors were on hand to offer their expert opinions, and the panel was ably chaired by a fourth, Professor Paul Torremans from the University of Nottingham. 

First up was Prof. Dr. Jan Rosen, Professor of Private Law at Stockholm University, who explained the facts behind the Svensson case and the ALAI paper that preceded it, including the fact that the original website that featured the copyright protected works in question only made them freely available for three weeks (at www.gp.se) and then the site restricted access. As the case was ultimately settled (with Prof Rosen saying that as far as he was aware the claimants in the case, two journalists, were happy with the end result) we are left with the CJEU exploring a new approach to the exhaustion of rights that which may or may not - be entirely rational. ALAI's  ten-page paper Report and Opinion on the making available and communication to the public in the internet environment – focus on linking techniques on the Internet, was adopted unanimously by ALAI's Executive Committee back on 16th September 2014 concluding that with hyperlinks: (i) The making available right covers links that enable members of the public to access specific protected material; and  (ii) the making available right does not cover links that merely refer to a source from which a work may subsequently be accessed, and, accordingly, courts should not introduce a general presumption of the rightholder’s consent to further communication to the public of what initially has been posted on the Internet with the rightholder’s consent, since this would amount to introducing an exception or limitation to the right, while general exceptions to the scope of the “making available” right require legislative action not least because the provisions of the 'making available' right and 'communication to the public' found in WCT, the Berne Convention, the 1996 WIPO Copyright Treaty as well existing EU Directives and CJEU decisions. "This finding does not exclude that a court may be inclined to infer such consent to permit the link based on the individual circumstances of a case".

Article 3(1) of of the InfoSoc Directive of course provides that Member States shall provide authors with the exclusive right "to authorize or prohibit any communication to the public of their works, by wire or wireless means, including the making available to the public of their works in such a way that members of the public may access them from a place and at a time individually chosen by them."

Prof. Dr. Silke von Lewinski, Senior Research Fellow, Max Plank Institute for Innovation and Competition, spoke on CJEU's "new public" approach and one thing that stood out from this talk and indeed from the questions at the end of the seminar from a very distinguished audience (with a glittering array of judiciary, practicioners and academics )was how open this concept could be. Whilst a "new public" could be defined as "an audience not envisaged by the copyright owner when authorising the initial communication to the public" if seems to defy detailed definition. If protected content is 'communicated' by the internet to say a London focussed audience even if for a restricted period of time, or even if for example geo filtered - is that audience then the whole of England and indeed is Europe then the envisaged public so there is no 'new public' left? And what will be the effect of technological restrctions placed on content by rights owners? Does the "new public" approach mean that the only way to protect content is to have technological measures in place to restrict acceess - even where the author has not targeted this new public or indeed wanted their work to be under some form of "compulsory licence" once its made available  - a copncept which eats at the very heart of the notion of 'authorisation'. 

Four other cases were mentioned in the discussions: Case C-306/05 Sociedad General de Autores y Editores de España (SGAE) v Rafael Hoteles SL where Advocate General Eleanor Sharpston held that communication of TV programmes to hotel guests by means of television sets which are fed a signal initially received by the hotel constitutes ‘communication to the public’ within the meaning of Article 3(1), The then ECJ went on to hold that "communication to the public" should be interprested broadly and that on the facts the clientele of a hotel formed a new public. The linked cases of C-403/08 Football Association Premier League Ltd and Others v QC Leisure and Others and C-429/08 Karen Murphy v Media Protection Services Ltd where the CJEU held that copyright owners must authorise any communication to the public and such authorisation was required where a person makes the protected work "accessible to a new public", and then finally the TVCatchup case C‑607/11 ITV v TVCatchup  which found that the InfoSoc Directive provides a high level of protection to authors and that it followed from this broad interpretation that the author's right of communication to the public covers any transmission or retransmission of the work to the public not present at the place where the communication originates by wire or wireless means, including broadcasting.  Authorising the inclusion of protected works in a communication to the public does not exhaust the right to authorize or prohibit other communications of those works to the public as made clear by Article 3(3). 

Finally, and before questions, Prof. Lionel Bently, Herchel Smith Professor of Intellectual Property, University of Cambridge, gave a fascinating insight into the European Copyright Society (reavealing that whilst it was composed of renowned scholars and academics from various countries of Europe, seeking to promote their views of the overall public interest, it was "undemocratic", "self selected" and perhaps more importantly, that not all of its opinions are agreed by all of the members. Thoe that agree sign up. The Opinion of the European Copyright Society (ECS) puts on record its views on the questions before the CJEU in Svensson, "which relate to the hugely important question of liability of those who create hyperlinks to material on the Web without the permission of the copyright holder in that material." The Opinion argues that "hyperlinking in general should be regarded as an activity that is not covered by the right to communicate the work to the public embodied in Article 3(1) of Directive 2001/29. The Opinion offers three reasons for this conclusion: firstly, that hyperlinks are not 'communications' because establishing a hyperlink does not amount to 'transmission' of a work, and such transmission is a pre-requisite for 'communication'; secondly because the rights of the copyright owner apply only to communication to the public 'of the work', and whatever a hyperlink provides, it is not 'of a work'; and thirdly because, even were a hyperlink to be regarded as a communication of a work, it is not to a 'new public.' This does not mean that creating hyperlinks in no circumstances involves liability. In fact, as is clear from national case-law, different forms of hyperlinking may indeed give rise to the following forms of liability, such as accessory liability (particularly in respect of knowingly facilitating the making of illegal copies); for unfair competition; and for infringement of moral rights; and possibly for circumvention of technological measures. Only the last of these has been the subject of harmonization at a European level, and thus falls within the competence of the Court of Justice.". Professor Bently made it clear he and perhaps other members of the ECS who has signed the opinion had thought some more on the topic and that the ECS is not saying that hyperlinking means you can "get your music for free" or that "anti circumvention of protection technology is OK". 

It would have been interesting to have heard the panellists views on the recenty decision by the CJEU in BestWater International GmbH v. Michael Mebes and Stefan Potsch (C-348/13) where the Court held that that framing content - here  copyright protected videos - is not a copyright infringement, even if the framing occurred without the permission of the copyright owner because it is not a “communication to the public” within the meaning of Article 3(1) of the Copyright Directive (2001/29/EC)

But time was against us, and whilst this is not a criticism of the seminar or indeed the speakers, to this blogger the matter at hand felt unresolved. Unsurprising perhaps where there seemed to be a general acceptance that Svensson has left us with 'a bit of a mess', that the 'new public' is an as yet to be properly defined concept - and what constitutes legitimate and illegitimate hyperlinking is still not crystal clear. Whilst initially many thought Svensson was 'opening up' the internet, there is now a fear that worried content owners might begin to place more technological barriers to access - paywalls, log ins etc - to avoid the possibility that content had already been made freely available to the public at large.

Previous thoughts on the 1709 blog http://the1709blog.blogspot.co.uk/2014/02/hyperlinks-making-available-and-new.html

UPDATE - Eleonora's thoughts "What happened to Svensson and his friends after the CJEU decision?" on the IPKat here 

Tarantino Suit Against Gawker Dismissed

As reported by the 1709 Blog back in February, director Quentin Tarantino is currently suing popular media and gossip blog, Gawker, for the contributory infringement of copyright in a script entitled, The Hateful Eight. The screenplay was leaked after the director circulated it among six acquaintances. Thereafter, the script was uploaded to two file-sharing sites: Anonfiles.com and Scribd.com. Gawker reported the leak and provided hyperlinks to the uploaded files.

Quentin Tarantino

Last week, a district court judge in the Ninth Circuit granted Gawker’s motion to dismiss on the grounds that Tarantino had failed to provide any evidence of direct infringement. Instead of providing the necessary proof that someone copied the work and that Gawker’s actions contributed to that direct infringement, Tarantino simply speculated that some direct infringement must have taken place.    

This leads one to wonder whether Tarantino’s assumption that direct infringement occurred was misplaced. On the balance of probabilities, it seems likely that someone will have downloaded the script from the file-sharing sites. Ought the failure to provide a specific allegation of such actions be grounds for motion to dismiss? Or ought the court presume direct infringement and allow the case to continue to the discovery stage?

Also interesting is the court’s discussion of what qualifies as a direct infringement. In a footnote, the court states that “even if Plaintiff alleged that individuals accessed the links contained in Defendant’s article in order to read Plaintiff’s script, such an allegation would still not support Plaintiff’s contributory infringement claim against Defendant” because “[s]imply viewing a copy of allegedly infringing work on one’s own computer does not constitute direct infringement.” Some have questioned whether this statement is consistent with a previous Ninth Circuit case of MAI Systems v Peak Corp., 991 F.2d 551 (1993). According to this case, the automated copying of protected material into a computer’s RAM is potentially grounds for direct infringement, despite the temporary existence of the copy. Presumably if someone did use the link to access the script, their viewing of the site would create a RAM copy and thus constitute a direct infringement under the MAI holding.

The court will allow Tarantino to re-file the case with more evidence by the end of the month.  Meanwhile, although he was initially so appalled by the leak that he decided to scrap the project, the director has subsequently stated that he is continuing to work on the script.

"Making available" and hyperlinks: the ALAI position

Not the least interesting feature of the Report and Opinion on the making available and communication to the public in the internet environment – focus on linking techniques on the Internet, a ten-page document produced by ALAI, is the fact that it was adopted unanimously by ALAI's Executive Committee back on 16 September, and you don't need to be an expert on copyright to know how difficult it is to get copyright experts to agree anything unanimously in this notoriously fissiparous branch of intellectual property.

The content of this Report and Opinion can be fairly appreciated from its Executive Summary, which reads as follows (with hyperlinks added):

"The exclusive right of “making available” under the WCT and the implementing EU legislation covers the offering to the public of a work for individualized streaming or downloading; in addition, where it takes place, the actual transmission of a work to members of the public also is covered, both irrespective of the technical means used for making available. In essence, what matters is that the act (i) is performed by an individual person (ii) directly or indirectly has the distinct effect of addressing the public, irrespective of the tool used by the individual, and (iii) concerns subject matter protected by copyright or related rights.

As applied to hyperlinks, these findings lead to the following conclusions: (i) The making available right covers links that enable members of the public to access specific protected material; (ii) the making available right does not cover links that merely refer to a source from which a work may subsequently be accessed.

It is irrelevant whether the link takes the user to specific content on a third-party website, or whether the linking site retains a frame around the content, so that the user is not aware that she is accessing the content from a third-party website.

It is also irrelevant to the act of offering access whether the work made available through the link is itself infringing: it is the act of offering that triggers the making available right, and that act is the same whatever the copyright status of the work that is made available.

There is obviously no infringement of the “making available” right where the rightholder's decision whether and under which conditions the targeted content is made available on the internet is respected. In contrast, this means in particular that linking to targeted content infringes the “making available” right if (i) the content is initially made available without the rightholder’s consent, or (ii) technical protection measures have been circumvented or (iii) the availability of the content, even if initially disclosed over the Internet with consent, otherwise clashes with the declared or clearly implied will of the rightholder.

Accordingly, courts should not introduce a general presumption of the rightholder’s consent to further communication to the public of what initially has been posted on the Internet with the rightholder’s consent, since this would amount to introducing an exception or limitation to the right, while general exceptions to the scope of the “making available” right require legislative action. This finding does not exclude that a court may be inclined to infer such consent to permit the link based on the individual circumstances of a case".

The Report and Opinion is a thoughtful and carefully drafted document, which focuses closely on the current case law of the Court of Justice of the European Union as well as on the position in some EU Member States. For anyone seeking to appreciate the background and sources relating to the current debate over the "making available" right in Europe as it applies to hyperlinks, this paper provides a clear and helpful explanation.