May 10, 2017

On 26 April 2017, the CJEU handed down its judgment in Case C-527/15 Stichting Brein v Jack Frederik Wullems, also trading under the name Filmspeler. The judgment addresses questions concerning the application of copyright law to the sale and marketing of a multimedia player pre-installed with add-ons containing hyperlinks to unlicensed copyright content on pirate streaming sites.

The CJEU has ruled, firstly, that the sale and marketing of a multimedia player of the kind in issue constitutes a communication to the public under Article 3(1) of the Information Society Directive (2001/29/EC). Secondly, that temporary copies made when users stream unauthorised content using such a device are not covered by the temporary copying exception under Article 5(1) of that Directive.

Background and questions referred

The background to the referral, including analysis of the Advocate General’s Opinion of 8 December 2016, can be found here. In brief, Stichting Brein (a Dutch copyright foundation) brought a claim against Jack Frederik Wullems (trading under the name of “filmspeler”) in respect of his sale of a multimedia player pre-loaded with add-ons which, when connected to the internet and a TV screen, enabled users to access and stream content from third party websites, some of which was unauthorised.

The referring Dutch court asked the CJEU, in essence, (i) whether the sale of a player such as the filmspeler device constitutes a communication to the public within the meaning of Article 3(1) of the Information Society Directive; and (ii) whether temporary copies made on such a device when the end user streams unauthorised copyright content from a third party website satisfy the conditions set out in Articles 5(1) and 5(5) of the Information Society Directive (and hence benefit from the temporary copying exception).

Communication to the public

Before considering the specific facts of the case, the CJEU recalled the following key principles established in its earlier jurisprudence:

• “Communication to the public” must be interpreted broadly and should provide a high level of protection for rightholders;
• The concept involves two cumulative criteria: (i) an act of communication of a work; and (ii) the communication of that work to the public;
• An “individual assessment” is required, in which it is necessary to take account of “several complementary criteria, which are not autonomous and are interdependent”;
• Of those criteria the “essential role” of the user is of particular importance: “The user makes an act of communication when he intervenes, in full knowledge of the consequences of his action, to give access to a protected work to his customers and does so, in particular, where, in the absence of that intervention, his customers would not, in principle, be able to enjoy the broadcast work”;
• The “mere provision of physical facilities” does not amount to a communication to the public;
• The “public” refers to an indeterminate number of potential viewers and implies a fairly large number of people;
• Where the communication is made by the same technical means as the original communication, the communication must be to a “new public” (being one not taken into account by the rightholder when it authorised the initial communication);
• The profit-making nature of a service is not irrelevant.

The CJEU considered that the sale of the filmspeler device did not constitute the mere provision of physical facilities for enabling a communication. Rather, Mr Wullems had pre-installed add-ons onto the filmspeler device which specifically enabled users to access unauthorised content “with full knowledge of the consequences of his conduct”.  Mr Wullems’ intervention enabled a “direct link” to be established between the third party streaming sites and purchasers of the multimedia player “without which the purchasers would find it difficult to benefit from those protected works.”

The communication in question was to a “public”.  The filmspeler player had been purchased by a “fairly large number of people.”  Furthermore, the CJEU considered that the communication at issue covered “all persons who could potentially acquire the media player and have an internet connection.“

Regarding a “new public”, the CJEU determined (applying its earlier reasoning in Case C-160/15 GSMedia v Sanoma) that the filmspeler device was sold by Mr Wullems in full knowledge of the infringing nature of the content to which the hyperlinks contained in the pre-installed add-ons provided access; and was supplied with a view to making profit. As to the former, the filmspeler device had been marketed as enabling purchasers to watch, freely and easily on a TV screen, audiovisual material available on the internet without the consent of the copyright holders.

Temporary copies

The temporary copying exception exempts from infringement acts of reproduction that satisfy the cumulative conditions contained in Article 5(1) of the Information Society Directive.  In order to benefit from the exception, the act must be (i) temporary; (ii) transient or incidental; (iii) an integral and essential part of a technological process; (iv) have the sole purpose of enabling a transmission in a network between third parties by an intermediary or a lawful use of a work or other subject matter; and (v) have no independent economic significance.

Article 5(1), as with all copyright exceptions, is to be applied in a manner consistent with the so-called “three step test” under Article 5(5).  This requires that the copyright exceptions (i) are only to be applied in certain special cases; (ii) which do not conflict with a normal exploitation of the work or other subject matter; and (iii) do not unreasonably prejudice the legitimate interests of the rightholder.

Given that the acts of reproduction in issue did not enable a transmission in a network between third parties by an intermediary, the CJEU’s focus turned to whether those acts “have the sole purpose of enabling a lawful use of a work.“  The CJEU noted that a use should be considered lawful where it is authorised by the rightholder or where it is not restricted by applicable legislation. In this case, it was the latter issue that needed to be assessed (given that the use of the works in issue was not authorised by the rightholder).

In considering this issue, the CJEU observed that the main attraction of the filmspeler device for potential purchasers was the pre-installed add-ons; and that purchasers of the device deliberately, and with full knowledge, accessed free and unauthorised protected works. The CJEU contrasted this position to that in its earlier decisions in FAPL (Cases C-403/08 and C-429/08) and Infopaq II (Case C-302/10) in which the use in issue, whilst not authorised, was not restricted by applicable legislation and was therefore not considered to be unlawful.

In addition, the CJEU found that the temporary acts of reproduction adversely affected the normal exploitation of the protected works and caused unreasonable prejudice to the legitimate interests of the rightholder (given the diminution in lawful transactions).  Accordingly, the second and third steps of Article 5(5) were not met.

Comment

This latest decision in a line of CJEU jurisprudence that considers communication to the public is welcome news for rightholders.  Significantly, the judgment further broadens the scope of the communication to the public right in confirming its application to the sale of devices which provide access to unauthorised content.

In many respects, Filmspeler represents a logical development of GS Media.  That case confirmed that there will be an act of communication within the meaning of Article 3(1) where a person knew or ought to have known that the link posted by them provides access to an unauthorised copyright work; and that there is a rebuttable presumption of knowledge where the link is provided for profit.  The analogy with the provision of a device pre-loaded with add-ons that contain links to unauthorised works is clear.

The CJEU’s findings regarding temporary copies made in the streaming process are also important.  This provides a further basis for establishing liability on the part of those operating infringing services (based on accessory liability) and supports Arnold J’s finding in FAPL v BT [2017] EWHC 480 (Ch) (see here) that users who stream significant segments of unauthorised football matches infringe the reproduction right.