Reforming of copyright in EU and one of the questions concerned: enforcement

In the light of coming copyright reforms in EU the draft impact assessment concerns some important copyright issues. One of them is enforcement.

Pirated material can literally be sent by everybody from everywhere to anybody anywhere. Moreover, infringements of copyrighted content online have become do frequent that they are no longer considered by consumers as illegal or even if illegal, as causing economic harm. At the same time, given that technology allows for almost perfect copies at low cost, piracy has become an even more profitable business. The exclusive rights that are recognised, with the appropriate boundaries, should be meaningful in the online environment, and the tools to enforce those rights should be available. At the same time the framework should guarantee the protection of fundamental rights, namely the right to property, the protection of personal data, the right to privacy and to information as well as the freedom of expression of all citizens.

IPRED stipulates, in recitals (2) and (15) as well as in Article 8(3)(e), that its provisions are without prejudice to the protection of personal data. At the same time, neither IPRED, nor other pieces of EU legislation contain specific provisions on the retention and disclosure of personal data to copyright holders for the purposes of IPR civil enforcement. The European Court of Justice has clarified that the Union’s acquis does not preclude Member States from imposing an obligation to disclose to private entities or persons personal data of citizens in order to enable them to bring civil proceedings for copyright infringements against these citizens, but nor does it require those Member States to lay down such an obligation. The CJEU has also clarified that rules concerning the retention of data for civil enforcement of IPR purposes do not fall within the scope of Directive 2006/24 on the retention of data. The articulation between rules on gathering of evidence and identification of infringers and rules on protection of personal data is therefore left to the Member States (provided that they strike a fair balance between the various fundamental right protected by the European Union’s legal order). However, it was reported, in particular in the Consultation on the civil enforcement of IPR, that the articulation between the different rules is often not provided in the Member States legislations which is likely to affect the effectiveness of measures implementing Articles 6, 7, and 8 while at the same time raising concerns in terms of protection of personal data. This conflict has, for example, been acknowledged by the Austrian Supreme Court in the decision “LSG vs Tele 2”: “As no explicit provision exists which requires the storing of traffic data to disclose identities and information to prosecute copyright infringers, the current right to information is worthless as the data which would be required are not entitled to be stored in the first place”.

The problems are as follows:

1) Right holders complain that the retention of data, which is necessary to have access to the identity of infringers on the internet, can either be impossible for copyright civil enforcement purposes or too short to be useful in the framework of civil proceedings.

2) In cases of copyright infringements committed via the internet, internet service providers may often not be in a position to disclose alleged infringer’s identities and contact details to right holders, even in the context of judicial proceedings, because of the lack of legal basis at EU and national level to disclose personal data.

3) Moreover, even if intermediaries are willing to provide contact details of their clients following a Court order, the accuracy of these data is sometimes questionable. Many websites tend to operate anonymously, i.e. they register fake “WHOIS” data and operate their business through empty shell companies. The problem is often compounded by the fact that some intermediaries offer services facilitating anonymous registration of domain names or allowing the actual IP addresses of the infringing websites to be hidden and generally provide services such as hosting without ensuring that contact details are accurate and/or up to date. Right holders therefore complain that they do not have access to more data in case of infringements. The problems are particularly salient for infringers operating anonymously, changing IP addresses rapidly and channelling the revenues they get from their activity through empty shell companies.

4) The lack of clarity concerning the articulation between enforcement of IPR and protection of personal data is not only likely to affect the effectiveness of provisions on the identification of infringers, but it can also raise concerns in terms of protection of fundamental rights of individuals to privacy and data protection (as enshrined under Article 7 of the Charter of Fundamental rights of the European Union and Article 8 ECHR, under Article 8 of the Charter of Fundamental right of the European Union, and under Article 16 TFUE). It was reported that in some instances right holders collect and process data, e.g. by monitoring of IP addresses, involved into file sharing or even streaming practices, using technical means that might not respect quality standards that guarantee the correctness of the data. They sometimes use the data collected through the execution of a Court order to “offer” out-of-court settlements to individuals without having the intention to launch a procedure. As a consequence, individuals might be exposed to possibly overzealous enforcement of IPR by the respective right holders.

The problem seems to stem from the fact that there is no harmonised understanding of the types of intermediaries covered, of the types of injunctions that be ordered against intermediaries, in what circumstances they may be issued, under which conditions and within which delays. For example, often courts appear to focus exclusively on internet service providers (ISPs) as intermediaries on the internet. Some Member States’ courts have linked the question of granting an injunction against an ISP to the establishment of some kind of responsibility of the intermediary which makes the granting of preliminary injunctions against intermediaries very difficult. There is a need to clarify how to articulate the possibility to impose injunctions on intermediaries given the prohibition for Member States to impose a general monitoring obligation on internet service providers which is also part of the EU acquis. Furthermore, right holders complained that injunctions against intermediaries in some Member States have an ineffective scope, insofar as they only enjoin the intermediary from allowing exactly the same infringement to happen (i.e. a continuation of the specific infringement by the same infringer), whereas in practice it is quite possible that the same infringer may engage in future infringements of the right owner’s title/product and this is particularly challenging for the protection of copyrighted works on-line. There are also doubts about the possibility to deliver injunctions on a catalogue-wide or only on a title-specific basis, which is very relevant when dealing with websites infringing copyright for a commercial purpose. It is not clear either whether ex parte injunctions which are foreseen in IPRED are possible when the recipient of the injunction is an intermediary. Finally, the possibility to request injunctions against intermediaries established in different Member States or to consolidate several actions in one jurisdiction is also very limited.

The lack of clarity concerning the extent to which intermediaries can be involved does not only affect the effectiveness of the protection of IPR but is also likely to raise concerns in terms of protection of fundamental rights. It can for example not be excluded that an injunction against an intermediary would constitute a restriction to the freedom to conduct a business of the intermediary, in which case any such limitation would have to be provided by law in accordance with Article 52 of the Charter of Fundamental Rights. Such an injunction could also result in a restriction of access to content and as such, may be considered as a restriction on the freedom of expression and such a limitation would have to be provided by law in accordance with Article 52 of the Charter of Fundamental rights as well. It follows that an injunction with a broad scope or that lacks clarity as concerns its exact scope and specificity in terms of measures that would have to be implemented would raise serious concerns as to the requirement that any limitation of a Charter right would have to be provided by law. Moreover, the burden and cost of the implementation of the injunction imposed on an intermediary can also be problematic.

More particularly on the internet, it is difficult to prove the exact scope of the infringing use and therefore the actual damages that have occurred. As it turned out from the responses to the Consultation on the civil enforcement of IPR, in some of the Member States courts do not award the profit generated by the infringer (unjust enrichment). Only 46 out of 62 respondents have indicated that unjust enrichment is taken into account by national courts. As the Consultation on the civil enforcement of IPR showed, right holders might refrain from litigation if they held the court proceeding lengthy, costly and do not expect to get properly compensated (51% of the respondents have indicated that they would refrain from litigation because of such reasons.).