Transaction Management in Database Management System
March 5, 2013 Webinar - ISP Liability in Europe and in the US
1. March 5, 2014
ISP liability for copyright
and TM infringement
Developments in Europe and in the US
SPEAKERS
Beatrice Martinet
@beamartinet
2. What is an ISP/OSP or Internet Intermediary?
ISP
Provide access to Internet
Web Hosting
Electronic storage of 3PC
Third party Content Platforms
Search
Engines
e-commerce
Platforms
Payment
Systems
Social
Media
P2P
Platforms
3. Why should they be liable for 3rd party content?
ISPs/ OSPs
User
Freedom to
conduct business
Free speech
Privacy
Access to
knowledge?
Right Holder
Property right
CLAIMS
§ major loss from online
infringement
§ return on investment
§ whack-a-mole argument
§ OSPs benefit from
infringement (increased
revenues)
§ OSPs are least cost avoider
(control platforms)
§ consequence of their
business
CLAIMS
mere conduit
not at the origin of content
too much info (M of data)
threat to their business model
threat to free open internet
go against balance set by
Congress
§ Right holders are least cost
avoider (know their rights
better and whether use is
infringing)
§
§
§
§
§
§
CLAIMS
§ convenient access to
information and goods
anytime, anywhere
§ free speech
§ privacy
4. Why should you care about Europe?
q I. Applicable Law: country where protection is sought
§ See art. 8 of EC Regulation 864/2007 (Rome II)
q Relevant question?
§ Did any harmful event occurred in this country?
§ Availability of the website
§ public possibly targeted? See ECJ L’Oreal v. eBay (2011), Football Dataco v.
Sportradar (2012), Pinckney v. Mediatech (2013)
§ Factors: language, currency, purchase and shipping availability? Extension?
q Common Denominator approach
§ If you’re OK in the EU, you should be OK in the US
§ Standard for liability generally broader in Europe
5. What is their regime of liability in EU and US and how to tackle
this issue globally?(Overview)
q I. Legal framework governing OSP liability in EU US:
§ A. The DMCA and the e-commerce Directive: a broadly similar legal framework
§
B. Limited impact of the difference existing between the two systems
q II. Interpretation of this framework by US and EU Courts
§ A. A different interpretation of similar legal concepts
§ B. A different approach towards similar Internet intermediaries
q III. Best Practices
§ A. For right holders
§ B. For platforms
q Conclusion: what to expect in the future?
6. I. Essential regulations governing OSP liability US/EU
1996
1998
2000
WIPO copyright treaty
Mere provision of physical
facilities for enabling
communication does not
amount to
“communication” (note to art. 8
DMCA (17 U.S.C. ß 512 (a)-(k):
Safe harbor for some OSPs
(conduit, caching, hosting and
linking services), subject to
certain conditions.
Directive 2000/31/EC (§4 art.
12-14)
Similar provisions limiting liability
of OSP (conduit, caching,
hosting but not linking services)
for third party content under
similar conditions.
WCT)
7. A. Basic Principles governing ISP liability: a broadly
similar legal framework
Qualify as a service provider
Both : act as an intermediary
(not at the origin of content)
US only:
(i) Designate agent to receive notification (Hosting)
(ii) Adopt and reasonably implement repeat infringer policy
(iii) Do not interfere with standard technical measures
Lack of knowledge standard
Both: Actual Knowledge or Sufficient awareness (of facts and circumstances from which infringing activity is apparent)
Adequate Reaction standard
Both: Expeditiously remove or Block access to infringing content
Lack of control ( benefice?) standard
EU: (i) Platform’s control is over “recipient of the
service”
(ii) Benefit not in Directive but relevant in some jdx
US: platform must also benefit from infringing activity
8. B. Limited impact of differences b/w the 2 systems
Directive
DMCA
Vertical approach
Horizontal approach
(all kind of content)
Procedural Rules
• Injunctive relief (512 (j)) : lR limited to
blocking access to specific user or
specific content + least burdensome
measure
• Notification and counter-notification
procedure 512 (c)(g)
• Subpoenas (512 (h)) procedure to identify
infringers
• CDA 230: all content except Fed. crim.,
Privacy IP
• DMCA: Copyright content only
• IP outside DMCA: CL vicarious and
contributory liability
Procedural Rules
• Injunctive relief: governed by national
law - expressly preserved in art. 12(3),
13(2), 14(3) e-com. Dir., 8(3) Infosoc
Dir., 11 Enforcement Directive
• No harmonized notification procedure/
no counter-notification procedure
• Subpoenas governed by national laws
9. II. A Different interpretation of this common framework
by US and EU Courts
Different
interpretation of
similar legal concepts
• Eligibility under hosting and
linking safe harbor
• Knowledge standard
• Adequate response standard
• Control standard
• Financial benefit standard
Different approach
towards similar
intermediaries
• Search Engine and linking
intermediaries
• Online marketplace and
auction sites
• Social media and other UGC
sites
• Peer to peer networks,
bitTorrent, cyberlockers
10. II A. A Different interpretation of this common framework
by US and EU Courts
Qualify as a service provider
US: Broad Concept
EU: active/ passive standard
Concept
National Divergences
Adequate Reaction standard
US: Narrow concept
EU: broader concept
National Divergences
Lack of control standard
US: Narrow concept
EU: Blurry concept
National Divergences
Lack of benefice standard
US: narrow interpretation
EU: not relevant
National Divergences
11. 1. Eligibility under the hosting and linking SH
Broad concept: more than mere electronic storage
encompasses access-facilitating process“
See e.g. UMG Recording v. Shelter (9th Cir, 2013)
US
Eligibility
under
hosting and
linking safe
harbor
But inducement incompatible with safe harbor
See e.g. Grokster, Fung, Megaupload
EU
Neutral? (T, A P)
Active role of such kind
as to give it knowledge
or control over the data
(Google v. LVMH/L'Oreal
v. eBay)
National
Divergences
Neutral role:
- Being subject to payment, setting payment terms, providing general
information, storing 3PC – all compatible (eBay, Google)
Active role:
- drafting commercial message, suggesting keywords (Google)
- providing assistance e.g. promotion or optimization of offers (eBay)
Non eligible: (After ECJ Decision) eBay (LVMH v. eBay, Supr Ct, May 2012), Tiscali
(Tiscali v Dargaud – Supr. Ct 2008, Sedo (Supr. Court 2011),
FRANCE
Eligible: (After ECJ Decision) Google (SC 2010, CA Paris 2012), Dailymotion
(NOP v. Dailymotion (Supr. Ct. 2011), Youtube (Youtube v. TF1, TGI Paris 2013)
Non eligible: IOL (RTI v. IOL (Milan, 01/11) Yahoo! (RTI v. Yahoo (Milan,09/11)
ITALY
Eligible: Google ( RTI v. Google), (Google v. Vividown, Ccass, dec. 2013) ) Yahoo! (RTI
v. Yahoo! (Rome, 03/11 – 12/11)
Non eligible: Google (Google v. Copiepresse, Bruss. Court of appeal, 05/11)
BELGIUM
Eligible: eBay (Lancome v. eBay, 2009)
12. 2. Knowledge standard
Knowledge
Standard
US:
Narrow Concept
Copyright; Actual knowledge and Red flag both refer to specific instance of
infringement
Difference is b/w subjective and objective standard (“objectively obvious to reasonable
person’)
(Viacom v. Youtube (2nd Cir., 2012) - UMG Recording v. Shelter Capital (9th Cir., 2013) Perfect 10 v. CCbill (9th Cir. 2007), Capitol Rec. v. MP3Tunes (SDNY, 2013))
General knowledge of infringing activity is insufficient (Amazon v. Corbis, WD Wah.04)
No investigation required (Perfect 10 v. Ccbill, (9th Cir. 2007)
But willful blindness = Knowledge (Napster (01),Grokster(05), Viacom (12), Fung (13)
Trademark: No general monitoring obligation (Tiffany v. eBay (2nd Cir. 2010)
But constructive knowledge may trigger obligation to take affirmative steps (LVMH v.
Akanoc (9th, 11))
EU:
Broader Concept
National
Divergences
UK
- Operator may have to undertake some control on its own
- Liability if aware of facts and circumstances on the basis of which a diligent
operator should have identified infringement (L'Oreal v. eBay)
EWHC 07/28/11, TCF v BT
“general awareness that their services are being used to infringe” enough to justify TD
Red flag knowledge: “Diligent operator” standard (FR CA, 09/10, LVHM v. eBay)
e.g. of Red flags: (i) multiple notice of infringement, (ii) promotion and involvement in sales
FRANCE
But mere awareness that services may be use for infringing activity is insufficient if
operator has shown willingness to take down infringing content (SAIF v. Google, NOP
v. Daillymotion)
Red flag : Ricardo v. Rolex - German Fed. Court: price can be red flag sufficient to
trigger filtering
GERMANY
15. 4. Control Standard
Trademark
US
Copyright
Control
Standard
Essential factor under vicarious liability doctrine
Lockheed Martin v. Network solution; Tiffany v. eBay (2nd Cir. 2010)
Under DMCA: narrow interpretation (but now independent from knowledge)
- Viacom v. Youtube (2nd Cir. 2012), “something more than mere ability to
block and remove content, w/o respect to knowledge” ;
- UMG Recording v. Shelter (9th Cir. 2013) “capacity to exert subst. influence
on activity of users, w/o necess. acquiring knowledge of specific infr. activity”
- Vimeo (SDNY, 2013): e.g. of control: syst. monitoring or inducement
Outside DMCA: broad interpretation
Napster: liable under contributory liability for failing to control its
system while had the right and ability to do so.
Secondary factor (awkward formulation in Directive) –blended with knowledge
“active role of such kind as to give knowledge of or control over the disputed data”
Google France v. LVMH (C-236-08 C-238-08) - L’Oreal v.eBay (C-324-09)
EU
Essential inquiry in some decisions e.g. Dailymotion not liable because no
intellectual control over content
National
Divergences
FRANCE
Irrelevant in others e.g. LVMH v. eBay - relevant inquiry is not whether right and ability
but whether has a duty to control
Other
countries:
not relevant
16. 5. Financial benefit standard
US
Secondary factor
see e.g. Viacom v. Youtube:
- infringing activity must be a draw, not just an added benefit
- value of service must lie in providing access to infringing content
EU
Irrelevant factor
see e.g. eBay, Google “The fact that the service is subject to payment
cannot have the effect of depriving the SP from exemption of liability”
Financial
Benefit
Standard
National
Divergences
UK
FRANCE
Relevant factor: cf. TCF v. BT (EWHC, July 2012) EMI v. Sky (EWHC, Feb 2013),
First Row (profiting from infringement on a large scale)
Relevant factor: reap a benefice from infringement through percentage fee“ see eBay v.
Parfums Christian Dior - Sedo (ibid)
Ebay’s profit does not only result from the neutral hosting of data but from the attractive
nature of its offers (eBay v,. Burberry)
Irrelevant factor: cf. Dailymotion: increased ad revenue is irrelevant
Relevant factor: RTI v. IOL - IOL offered services with a view to commercial benefit
ITALY
17. B. Different approach towards similar intermediaries
Search Engine/
Linking
providers
Online Market
Place
Social media
and other 3PC
platforms
Peer to Peer
Networks
US
US
US
US
EU
EU
EU
EU
National
Divergences
National
Divergences
National
Divergences
National
Divergences
22. Liability of online marketplace and auction website in
Europe and in the US
- No liability for third party content except if failed to act after specific
knowledge (Tiffany v. eBay (2nd Cir. 10))
- Brian Masck v. Amazon (ED Mich. 2013): Amazon may be liable under
contributory liability for continuing to sell photo after notification of
infringement (no DMCA discussion)
US
Online
marketplace
Platforms may be liable if plays an active role of such kind as to give it
knowledge or control over infringing sale notably when providing
assistance e.g. promotion or optimization of offers (L’Oreal v. eBay)
EU
National
Divergences
FRANCE
UK
- eBay not eligible under SH b/c played active role, notably when assisted sellers to
optimize and promote offers) (eBay v. LVMH, SC 05/12) liable for 3PC
- eBay held liable for concealment/reception illicit profit (eBay v. Burberry, CA Pa 12)
- 2xmoinscher not eligible under SH b/c offers searching, anonymity and escrow services
(TGI Paris, May 13) but not liable since did not commit any fault
L’Oreal v. eBay, EWHC May 22, 2009 - QP to ECJ + 10 GP eBay could have taken to
curtain infringement but that may not have any duty to take. NB: cases in FR, BE, GER
and UK were finally settled in Jan 2014.
Lancome v. eBay (Belgium Court, 2009) – eBay eligible under SH/ not liable for 3PC
BELGIUM
GERMANY
eBay eligible under hosting safe harbor but may have to conduct some filtering on
ground of disturber liability (Rolex, etc.)
24. Liability of social media and other UGC sites
Red Zone: specific knowledge + lack of adequate reaction = liability
US
Grey Zone 1: Willful blindness (aware of high probability + conscious avoidance)
- UMG Recording v. Shelter (9th Cir. 13) ;Viacom v. Youtube (2nd Cir. 12 ) (remand))
Social
media
other 3PC
platforms
EU
(no case law)
National
Divergences
FRANCE
Grey Zone 2: Red Flag knowledge?
Subjectively aware of fact circumstances that would have made specific
infringement objectively obvious to reasonable person
e.g. of Red flag? - Notification of specific material by third party? (Viacom v.
Youtube)
- Employee interaction (liking, commenting, white or blacklisting)? (Vimeo (SDNY
2013)
Google (Hosting providers but may still be liable under civ. liability (Bac films (CA Pa, 11),
Dailymotion: hosting provider but liable for not blacklisting repeat infringers and not
taking down content promptly (TF1 v. Dailymotion)
Dailymotion (NOP v. Dailymotion (Supr. Ct. 2011),
Liable: IOL and Yahoo not eligible under hosting exemption b/c active role in organizing
the service and selecting the videos (RTI v. Italia Online, Yahoo Milan, 2011)
ITALY
Not liable: Yahoo! Google (Rome 2011)
Youtube v. Gema (2012): Google not liable as “violator” but must take filtering measures
on the ground of “disturbing doctrine” (form of secondary liability)
GERMANY
25. 4. Peer to peer network, bit Torrent, cyberlockers
26. Liability of peer to peer networks, bitTorrent, and other
Cyberlockers
Contributory liability
e.g. Napster (9th Cir. 2001), Aimster (7th cir 2003), Grokster (SC, 2005), Arista
Records v. Lime Gp, Usenet (SDNY 2009 and 2010), Perfect 10 v. Megaupload (SD
Cal, 2011), Fung (2013)
US
Vicarious liability e.g. Napster (9th Cir. 2001),
Peer to peer
websites
Inducement e.g. Grokster (SC, 2005), Megaupload (SD Cal, 2011), Fung (2013)
European Court of Human Right (F. Neij v. Sweden, Feb. 2013) confirms 1 year jail
and 5 millions euros sentence for operator of TPB - no interference w/ freedom of
expression
EU
SGAE v. DJGC (Barcelona): no liability for SP torrent website elrincondejesus.
SPAIN
National
Divergences
GERMANY
Atari Europe v. Rapidshare (OLG Dusserldorf, 2010): no liability for Rapidshare
because complied with takedown notice and used for legal purpose by most users
Kazaa v. Buma/Sterma: no liability b/c (i) no control and (ii) software has legitimate use.
ISP XS4ALL has no obligation to block access to the Pirate Bay
NETHERLANDS
UK
SWEDEN
But liability of “the Pirate Bay” and Mininova, for copyright infringement
TCF v. BT - the Pirate Bay” - liable for copyright infringement
liability of “the Pirate Bay”
BAF v. Telenet Belgacom: Belgium SC confirmed lawfulness of far reaching injunction
ordering all ISPs to block access and ref. to The Pirate Bay
BELGIUM
29. 1. Be sure to qualify under a safe harbor
q Act as a service provider
§ Avoid commingling with third party content - see Vimeo, Tumblr
§ Beware of playing a too “active” role – see eBay
Adopt and reasonably implement a repeat infringers policy
§ Must provide for termination of repeat infringers in appropriate circumstances
§ Inform subscribers and account holders of the policy
§ Must be reasonably implemented (keep records) but does not have to be perfect
§ see Fr. SC 2012: Dailymotion liable for not blacklisting repeat infringers
§ see Vimeo (SDNY, 2013), Corbis v. Amazon, (WD Wash, 2004
§ See Perfect 10 v. Giganews, C.D. Cal 2014, no liability for not deleting all
content of repeat infringer
q Don’t interfere with standard technical measures
§ Disqualify OSP from protection under safe harbor (see Corbis v. Amazon)
§ Circumvention of TPM - DMCA specific offense (17 USC § 1201)
30. 2. Assess the different theories of liability
§ Volitional conduct (Perfect
10 v, Amazon)
Direct
Liability
§ Control
§ Benefit
Vicarious
Liability
§ Material Contribution
§ Knowledge
Contributory
Liability
Inducement
§ Distribution of
device suitable
for infringement
§ Evidence of
actual
infringement
§ Intent to foster infringement
(clear and affirmative steps)
31. Zoom on inducement
q Clear expression or other affirmative steps
§ Promoting infringing use of a product
§ e.g. advertising (Grokster, Fung)
They bit the Apple!
§ Failure to filter out infringing content despite general knowledge
of specific infringement (ibid)
§ Helping localizing infringing content (Fung)
§ Avoiding taking any steps to diminish infringing UGC (Fung)
§ Offering reward or incentive to 3rd parties for uploading infringing
content (Megaupload)
§ Service with overwhelming amount of infringing content
§ Building an audience or a business model on IP infringement
(Grokster, Fung)
32. 3. Know what you are supposed to know
Actual Knowledge
Red flag knowledge
Willful blindness
§ In general reception of
compliant notice of specific
infringement (P10 v. CCBill)
§ Objective prong: Reasonable
person (US)/ Diligent operator (EU)
§ Something more than reception
of formal TDN (Viacom, MP3Tunes)
§ Interaction of Cie’s employee w/
content or 3P notices may qualify
(Vimeo, Fung)
§ Interpretation is broader in Europe
§ Aware of high probability of
copyright infringement
§ Consciously avoid confirming
that fact
§ Cf. Viacom, v. Youtube (2nd
Cir.12), P.10 v. Megaupload
(S.D. Ca. 2011)
§ Not necessarily specific infr.
§ Concept may be broader in
Europe
34. 5. Going beyond DMCA obligations?
q Setting up some kind of filtering systems in collaboration with R.H
q Avoiding gaining any financial interest from piracy
§ Cf. industry voluntary agreement to remove ad from websites dedicated to piracy
§ Cf. Avoid building you business model on piracy
q Taking reasonable (business compatible) steps to combat piracy
§
Cf. UK decision in L’Oreal v. eBay and FR decision in LVMH v. eBay – good practices involves
§
§
§
§
preventive filtering,
restrictive selling conditions w/regard to items most likely to be infringed,
strict repeat infringers policy,
immediate withdrawal of any infringing offers, etc.
37. Best Practices for right holders
q 4: Do not “abuse” the take down system
§ Make sure you have a valid claim
Cf. Sogelink v. Sig Image: Fr Supr Ct held a company liable for using Google take down system
when the use of their TM as a keyword by their competitor did not create consumer’s confusion
(May, 2013)
§ Do not misrepresent the reality (512 (f)
See Lenz v. Universal Music (baby dancing on Prince) (ND Cal 08): lack of consideration for fair use
before sending TD notice: sufficient basis to state a claim for misrepresentation 512 (f)
§ Beware of possible backlashes (Unfair competition, Business
interference, False advertising, Libel, etc. counterclaims)
• Counterclaims
• DJ: See e.g. Lawrence Lessig’s v. Liberation Music or CrossFit v. Alvies (Facebook page of mom fans’ blog):
claims based on 512 (f), unfair competition, false advertising, business interference, etc.
• TRO/SJ: See e.g. Lunchmaster v. Choicelunch (SF): SJ ordering withdrawal of abusive TD notice
38. Practical ways to combat infringement: alternative business
models
q Free, freemium
advertising-supported
models
q Micro payment
q Subscription
q Cross-subsidization
39. Conclusion: Moving forward, what to expect?
Legislative reforms?
q Many proposals of legislative reforms
§ US: SOPA, OPEN,
§ International: ACTA
§ Europe: SINDE, AGCOM, HADOPI, DEA etc.
Limit of legislative reforms?
§ Lack of consensus and fundamental rights issues
§ Protecting ISP further? Which response to piracy?
§ Increasing ISP involvement in fight against piracy?
§ Opportunity? Costs on innovation, entrepreneurship, freedom of information
§ Means: Injunctive relieves? Dereferencing? Cutting stream of revenues - limits
§ Cracking down on users?
§ Limits to graduated response models – efficiency, unpopularity,
§ Fundamental rights issues: digital exclusions and free speech