IP Law Daily Shop owners offering free Wi-Fi not liable for infringing downloads, says EU court
Thursday, September 15, 2016

Shop owners offering free Wi-Fi not liable for infringing downloads, says EU court

By Jody Coultas, J.D.

A shop owner that offered free access to a Wi-Fi network to the general public was not liable for copyright infringement based on unlawful music downloads by customers, according to Court of Justice of the European Union. The court, however, held that shop owners may be required to password-protect their networks in order to bring an end to, or prevent, such infringements (McFadden v Sony Music Entertainment Germany GmbH, September 15, 2016).

In 2010, a musical work was unlawfully offered for downloading via the store’s Internet connection. The shop owner was not the actual party who infringed the copyright. Sony Music Entertainment Germany GmbH gave formal notice to the shop owner of the illegal download. In January 2014, a German court found in favor of Sony Music on infringement claims. The shop owner appealed, arguing that he was exempt from liability under the provisions of German law transposing Article 12(1) of Directive 2000/31. The Landgericht München I (Regional Court, Munich I, Germany) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling.

Directive 2000/31/EC exempts intermediate providers of mere conduit services from liability for unlawful acts committed by a third party with respect to the information transmitted. An exemption to liability applies where: (1) the provider of the mere conduit service must not have initiated the transmission; (2) it must not have selected the recipient of the transmission; and (3) it must neither have selected nor modified the information contained in the transmission.

The court held that making a Wi-Fi network available to the general public for free constitutes an ‘information society service’ under the Directive.

Also, the court confirmed that, where the above three conditions are satisfied, a service provider who providers access to a communication network, may not be held liable. Consequently, the copyright holder is not entitled to claim compensation on the ground that the network was used by third parties to infringe its rights. Since such a claim cannot be successful, the copyright holder is also precluded from claiming the reimbursement of the costs of giving formal notice or court costs incurred in relation to that claim.

However, the Directive does not preclude the copyright holder from seeking to have such a service provider ordered to end, or prevent, any infringement of copyright committed by its customers.

Lastly, the Court held that an injunction ordering the Internet connection to be secured by means of a password is capable of ensuring a balance between the intellectual property rights of rightholders and the freedom to conduct a business of access providers and the freedom of information of the network users. Such a measure is capable of deterring network users from infringing intellectual property rights. In order to ensure that deterrent effect, it is necessary to require users to reveal their identity to prevent them from acting anonymously before obtaining the required password.

However, the Directive expressly rules out the adoption of a measure to monitor information transmitted via a given network. Similarly, a measure consisting in terminating the Internet connection completely without considering the adoption of measures less restrictive of the connection provider’s freedom to conduct a business would not be capable of reconciling the conflicting rights.

MainStory: TopStory Copyright TechnologyInternet

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