1. 1 CTDLV11-XXXX Author: Dramatic, Literary and Audiovisual Works Technical Committee Salvador de Bahia, 08/11/2011 – 09/11/2011 Source language: English ISP Liability Issues in the EU Ang KT Shanghai, PRC 9 November 2012

2. 2 E-Commerce Directive (Directive 2000/31/EC) E-Commerce Directive establishes harmonized rules on limitations of liability of intermediary service providers An ISP is exempt from liability when it serves as a "mere conduit" (Art 12) or provides "temporary caching" (Art 13) for the sole purpose of making the transmission of content more efficient, is of a mere technical, automatic and passive nature, and where the ISP has neither knowledge nor control over the content being transmitted or stored For an ISP providing content storage, i.e., hosting services (Art 14) to benefit from a limitation on liability, it must act "expeditiously" to remove or disable access to content upon receipt of "actual knowledge or awareness" of "illegal activities“. This Article does not affect the possibility of Member States judicial or administrative systems to require an ISP to terminate or prevent an infringement, or to establish procedures governing the removal of, or access to, content

3. 3 E-Commerce Directive The conditions under which a hosting provider is exempted from liability, as stated in Art 14(1)(b) is the basis for the "notice and take down" procedures by copyright owners to ISPs to combat infringement. However, the EU does not recommend legislative initiative in this regard; it prefers that ISPs, in consultation with rights holders, develop their own notice and take down procedures Article 15 of the E-commerce Directive prevents Member States from imposing a "general obligation to monitor" content which they transmit or store as provided in Arts. 12, 13 and 14, nor a general obligation to "actively seek facts or circumstances indicating illegal activity“. This Article, however, does not prevent courts or administrative authorities of Member States from imposing a monitoring obligation in a specific, defined individual case

4. 4 MySpace France, 2007 In June 2007, MySpace was successfully sued for infringement of a French author's & personality rights, after several of his skits were posted by a user on one of the site's web pages The French High Court of First Instance held MySpace to be a publisher & liable for infringement although it was not disputed that the site provides ‘hosting services’ MySpace allows its members to create personal web pages within a specified frame structure, including video uploading, and that each time a video posted by a member is viewed, advertisements, from which MySpace profits, are broadcast These elements of MySpace's service persuaded the court that it acts as a publisher, and was therefore not entitled to the immunity of Art 14 of the E-Commerce Directive (implemented as Article 6.I.2 of the French Act on Confidence in the Digital Economy, 21/6/2004) and was therefore liable for infringing content posted by its members

5. 5 Pirate Bay Sweden, 2010 Pirate Bay operated a filesharing service using BitTorrent to enable users to share files containing copyright materials District Court held that safe harbour provision of Art 14 does not apply to protect as Pirate Bay contributed to the direct infringement of users by providing well developed search functions, easy uploading & downloading procedures & linking the tracker to the website; that it had knowledge of the infringing behaviour of its users; decision affirmed by Court of Appeal on 26 November 2010; appeal to Swedish Supreme Court rejected earlier this year; appeal to ECJ

6. 6 Daily Motion France, 2011 Film producer sued UGC webite DailyMotion for hosting unlawful copies of the film 1 st instance court held that DM had actual knowledge of the presence of illegal content on its website and that its architecture & technical means enable illegal activities & that its success depended on making copyright works available; therefore, safe harbour provided by Art 14 did not apply although it was a hosting provider Decision reversed on appeal on ground that DM did not have exact knowledge of specific infringement and that it already installed filtering technology; therefore, it qualified for protection under Art 14;

7. 7 DailyMotion France, 2011 Appeal decision affirmed in Feb 2011 by Supreme Court on ground that: Letter of formal notice from film producer did not include all the information required by article 6-I-5 of the Law for Confidence in the Digital Economy; information must be sufficient to identify the infringing content in question with sufficient precision DM only became effectively aware of the offending content upon service of the complaint and its exhibits and was guilty of “no breach of the obligation of promptness in withdrawing the illegal content or blocking access to it”. It could therefore not be found liable

8. 8 Scarlet vs SABAM ECJ Decision interpreting Article 15, E-Commerce Directive, 2011 SABAM is a CMO representing authors, composers and publishers in Belgium. Scarlet is an ISP. A Belgian court granted injunctive relief to SABAM that required Scarlet to implement Internet traffic monitoring & filtering systems that would prohibit Scarlet’s customers from illegally downloading files. Scarlet appealed to the Belgian Court of Appeal. During the appeal, the Court asked the ECJ to consider if national courts of EU member states are entitled to impose such obligations on ISPs The ECJ ruled on 24 November 2011 that it was contrary to the European Directive on E- Commerce

9. 9 RapidShare Germany, 2012 German Federal Supreme Court ruled 12 July 2012 Video games company Atari sued RapidShare, a file-sharing site for unlawfully providing access to one of its games When notified, RapidShare deleted the files in question Atari was not satisfied and required the inclusion of a filter and other measures to prevent illegal uploading of copyright material District Court ruled for Atari but the Higher Regional Court of Düsseldorf dismissed the action on appeal, considering that RapidShare had already taken enough measures against copyright infringement and accepting the argument that it was impossible to check all files loaded on the site

10. 10 RapidShare Germany, 2012 Atari appealed to German Federal Supreme Court which held that file-hosting services can be held liable for secondary copyright infringements under certain conditions: File-hosters did not generally have to monitor uploads from their users, but that they might have to take measures once they have been notified of a specific infringement issue In RapidShare’s case, it had to take all “technically and economically reasonable precautions” to prevent the uploading of Atari’s game. RapidShare will also have to browse its entire file collection to detect and delete pirated content, and to monitor a “manageable number” of third-party sites that offer link collections of content available on RapidShare to check whether they are not indexing a copy of Atari game and if so, to delete it from its servers. Failing to carry out these provisions, the service provider would be liable for damages

11. 11 RapidShare Germany, 2012 The Supreme Court however included a clause that anti-piracy measures had to be within reasonable limits; the case is now back to the Higher Regional Court in Düsseldorf which has to decide what constitutes "reasonable limits"

12. 12 SNEP vs Google France, 2012 SNEP, the French phonographic industry body had sued Google for providing the suggestions “Torrent”, “Megaupload" and “Rapidshare” when users typed the names of artists or music bands in the Google search bar First Instance and Appeal Courts rejected SNEP's demands that Google stop suggesting the names of these online services; found that these was not illegal in themselves, even though they could be used to infringe copyright; that therefore, SNEP's rights were not affected by Google's service, and that the company could not be held liable for such “potentially infringing uses”, nor be forced to censor its automatic suggestions

13. 13 SNEP vs Google France, 2012 Supreme Court rejected the lower courts' legal reasoning and held that Google's autocomplete feature actually “provided the means to infringe copyright and related rights”, and that the measures required by SNEP, while not being totally effective, could in fact “prevent or terminate such infringements” The case is now back to a lower court to be judged once again

14. 14 - By the end of June 2012: - 95 % of those having received a first time notice do not give rise to the need for a second notice for illegal behaviour on peer to peer networks; - 92% of those having received second notice are in the same situation (no further illegal behaviour recorded within the timeframe set out by law), - 98% of those having received a third notice show the same trend. HADOPI: figures 1,150,000 recommendations sent by the end of June 2012

15. 15 The End Thank You