THE LIABILITY OF THE INTERNET SERVICE PROVIDERS (ISPS), NEWS PORTALS, OPERATORS OF ONLINE MARKETPLACE, AND OTHER INTERNET MEDIATORS FOR BREACH OF INTELLECTUAL PROPERTY RIGHTS CONSTITUTED ON BEHALF OF THEIR USERS

I. GENERAL OVERVIEW OF THE  LIABILITY FOR INFRINGEMENT OF INTELLECTUAL PROPERTY RIGHTS.

Infringement of Intellectual property rights can be direct whereas in order to prove infringement the plaintiffs has to prove that the defendants have copied the protected work.

However the major part of violations of intellectual property rights occur in the Internet. In the course of committing such violations various mediation services are used. For those who own rights it is impractical to bring charges for violation of their rights against individual Internet users.

Thus, the established practice is to direct such charges against the providers of Internet services or the Internet Intermediaries. In this case we talk about the Secondary liability of the Internet Intermediaries.

 

II. LEGAL BASE FOR ENGAGING THE LIABILITY OF THE INTERNET INTERMEDIARIES.

1. DIRECTIVE 2004/48/EC OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL OF 29 APRIL 2004 ON THE ENFORCEMENT OF INTELLECTUAL PROPERTY RIGHTS.

Member States shall ensure that rightholders are in a position to apply for an injunction against intermediaries whose services are used by a third party to infringe an intellectual property right, without prejudice to Article 8(3) of Directive 2001/29/EC.

2. DIRECTIVE 2001/29/EC OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL OF 22 MAY 2001 ON THE HARMONISATION OF CERTAIN ASPECTS OF COPYRIGHT AND RELATED RIGHTS IN THE INFORMATION SOCIETY

Article 8.3. Member States shall ensure that rightholders are in a position to apply for an injunction against intermediaries whose services are used by a third party to infringe a copyright or related right.

 

 III. SAVING CLAUSES

So far it became clear that a legal base to make the Internet Intermediaries liable for intellectual property infringement exists.

Now let us examine the possible defenses that the Internet Intermediaries have at hand or the so called “Saving clauses”.

Subsequently, we will consider the case law of the Courts of the European Union, which will help us put everything in place and answer the question When is it possible to engage the liability of the Internet mediators?

 Let’s get started and let’s take a look at the Saving Clauses.

 

 DIRECTIVE ON ELECTRONIC COMMERCE

Where an information society service is provided that consists of the storage of information provided by a recipient of the service, Member States shall ensure that the service provider is not liable for the information stored at the request of a recipient of the service, on condition that:

(a) the provider does not have actual knowledge of illegal activity or information and, as regards claims for damages, is not aware of facts or circumstances from which the illegal activity or information is apparent; or

(b) the provider, upon obtaining such knowledge or awareness, acts expeditiously to remove or to disable access to the information.

In light of the above, it becomes clear that the Internet Service Providers may be liable for Intellectual Property Infringement and that in certain circumstances they may escape liability. Let us see how the Courts of the European Union clarify the liability of the Internet Intermediaries.

 

 IV. CASE LAW IN REGARDS THE LIABILITY OF THE INTERNET INTERMEDIARIES

 

C-70/10 SCARLET EXTENDED, JUDGMENT OF 24 NOVEMBER 2011

LIABILITY OF THE ISPs.

SHOUD THE ISPs BE REQUIRED TO INSTALL FILTERING SYSTEMS TO PREVENT ILLEGAL DOWNLOAD?

 The case originates within the application of the Belgian company representing authors, composers and editors (SABAM) seeking to end the growing practice of illegally downloading files containing protected musical works from the Internet. In 2004, it brought proceedings before the President of the Court of First Instance of Brussels, which ordered Scarlet, an Internet service provider (ISP), to bring to an end to these copyright infringements by making it impossible for its customers to send or receive in any way, by means of peer-to-peer software, electronic files containing musical works in SABAM’s repertoire.

The court held that in the context of measures adopted to protect copyright holders, national authorities and courts must strike a fair balance between the protection of copyright and the protection of the fundamental rights of individuals who are affected by such measures.

The court also held that requiring the installation of filtering system result in a serious infringement of the freedom of the ISP concerned to conduct its business since it would require that ISP to install a complicated, costly, permanent computer system at its own expense, which would also be contrary to the conditions laid down in Article 3(1) of Directive 2004/48, which requires that measures to ensure the respect of intellectual-property rights should not be unnecessarily complicated or costly.

 Therefore the answer of the question whether the ISPs should be obliged to install filtering systems to prevent illigal download is negative but regard should be had to the fact whether the ISPS has an active control over the data stored.

 

C-324/09 L’OREAL AND OTHERS V EBAY, JUDGMENT OF 12 JULY 2011

THE COURT OF JUSTICE SPECIFIES THE OBLIGATIONS IMPOSED ON COMPANIES RUNNING AN ONLINE MARKETPLACE REGARDING INFRINGEMENT OF TRADE MARK RIGHTS COMMITTED BY USERS.

 In essence the question is this case is whether EBAY should make sure that its users does not commit infringements of trademarks?

Again, the answer of the question lies in the assessment whether the operator of an online marketplace plays an active role on the control of the data stored. It will for example play such active role where the operator provides the customer/seller with assistance consisting in particular of optimizing the presentation of the offers or promoting them. According to the Court it is for the national courts to carry out this assessment.

 According to the court in this case EBAY does not have a neutral position between the customer/seller and the potential buyer and does not confine itself to technical and automatic processing of the data relating to the offers it stores. Rather it plays an active role of such a kind as to give it knowledge of, or control over, those data.

 It should be reiterated though that the operator of an online marketplace is not itself ‘using’, within the meaning of Union law, signs identical with or similar to trade marks, which are inevitably displayed in the offers for sale on its website. This use is made by the sellers who are customers of the operator of that marketplace.

 

JOINED CASES C-236/08, C-237/08 & C-238/08, GOOGLE FRANCE SARL v. LOUIS VUITTON

THE CASE CONCERNS THE MANNER IN WHICH GOOGLE SELLS KEYWORDS – „ADWORDS“ – AS LINKS TO WEBSITES.

 Louis Vuitton complained that third parties were paying for keywords that were trade marks of Louis Vuitton. Louis Vuitton complained to a French court that Google was infringing its trade marks.

According to the Court Louis Vuitton can prevent use of its trade mark as a keyword, without the consent of Google.

Louis Vuitton cannot directly prevent use of its trade mark as a keyword by Google unless Google has „played an active role of such a kind as to give [Google] knowledge of, or control over, the data stored“.

In essence, European Court of Justice Holds that Search Engines Do Not Infringe Trademarks.

The conclusion is that Google has no active role in the process. Rather it provides only a platform and the claim should be addressed against the individual user (advertiser).

 

 THE DELFI AS VS ESTONIA JUDGEMENT

GRAND CHAMBER OF THE EUROPEAN COURT OF HUMAN RIGHTS

(LLIABILITY OF AN ONLINE NEWS PORTAL FOR THE OFFENSIVE COMMENTS POSTED BY ITS READERS BELOW ONE OF ITS ONLINE NEWS ARTICLES)

 The grand chamber ruled Estonian news site Delfi may be liable for anonymous defamatory comments posted online from its readers, even when they are removed upon request.

According to the Court “Where third-party user comments are in the form of hate speech and direct threats to the physical integrity of individuals, as understood in the Court’s case-law (…), the Court considers (…) that the rights and interests of others and of society as a whole may entitle Contracting States to impose liability on Internet news portals, without contravening Article 10 of the Convention, if they fail to take measures to remove clearly unlawful comments without delay, even without notice from the alleged victim or from third parties”.

 

 The principles that can be outlined as conclusion are the following:

  1. There is a legal base for liability of the Internet Intermediaries.
  2. The Internet Intermediaries have certain defenses at hand.
  3. The defenses of the Internet Intermediaries are clarified by consistent case law according to which where the Internet Intermediary does not have an active role in the process of data treatment, rather it just provides a Platform, its liability is less likely to be engaged.

 

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