September 27, 2021
The Cypriot company, Mircom International Content Management & Consulting Ltd (MICM), entered into licences with various US and Canadian producers of erotic films, giving it the right to communicate the films to the public. Under the licences, Mircom was required to investigate acts of infringement of the producers’ copyright across the networks and to take legal action in its own name against the perpetrators in order to obtain compensation, 50% of which it was obliged to pass on to the producers.
In June 2019, Mircom issued various sets of proceedings in the Belgian courts against three Belgian ISPs seeking, amongst other things, orders that they provide identification data of their customers whose internet connections had been used to share films from the Mircom catalogue on a peer-to-peer network using the BitTorrent protocol. The IP addresses of those connections were collected on behalf of Mircom by Media Protector GmbH using specialised software.
The Belgian Companies Court referred various questions to the CJEU.
The Belgian court asked, first, whether users carry out acts of “communication to the public” under Articles 3(1) and (2) of the Copyright Directive (2001/29/EC) by the download, and simultaneous upload to other users, of fragments of a file via a peer-to-peer network, even if the individual fragments are unusable in themselves.
The CJEU noted that any user of the peer-to-peer network can easily reconstruct the original file from fragments from multiple users. The fact that an individual user does not download the entire original file does not prevent him/her from making available to others those fragments that he/she has managed to download, thereby contributing to access to the complete file.
Further, there is no minimum threshold of the number of fragments that a user must download before “making available” under Articles 3(1) and (2) can be established. For there to be an “act of communication”, and consequently, an act of “making available”, it is sufficient for a work to be made available to a public in such a way that people can access it, from wherever and whenever they choose, irrespective of whether they actually do so. The concept of “act of communication” refers, the CJEU said, to any transmission of a protected work, irrespective of the technical means or process used.
Therefore, any act by a user, in full knowledge of the consequences of what they are doing, which gives access to a protected work is liable to be an act of communication for the purposes of Articles 3(1) and (2). This is the case, the CJEU said, even though the file fragments are unusable in themselves, and the uploading is automatically generated by the BitTorrent software. Whether this applied to the users in this case was for the national court to decide. The deliberate nature of their conduct was not negated by the uploading being automatic.
As for whether the “act of communication” was to “the public”, the CJEU noted that a peer-to-peer network is used by a considerable number of people. Further, it was clear that those users can access, at any time and simultaneously, the protected works on the platform. Therefore, the “making available” was aimed at an indeterminate number of potential recipients and involved a fairly large number of people.
In addition, insofar as works were being published without the authorisation of the rights holders, those works were being made available to a new public. Even if a work had previously been posted on a different website, without any downloading restrictions and with the consent of the rights holder, the fact that users of a peer-to-peer network had downloaded fragments of that work that were then automatically made available to others, meant that those users had played a decisive role in making that work available to a public that had not been taken into account by the rights holder when he/she authorised the initial communication.
The Belgian court also asked whether a company such as Mircom which, although it has acquired certain rights over protected works does not exploit them, but instead claims damages from individuals who infringe those rights, can benefit from the measures, procedures and remedies in Chapter II of the Enforcement Directive (2004/48/EC) to enforce those rights, e.g., by requesting information. It also asked whether such a company can be considered to have suffered any prejudice in accordance with Article 13 of that Directive.
The CJEU said that a company such as Mircom can indeed, in principle, benefit from the Enforcement Directive, provided the claim it makes is not abusive. Article 4(1) of that Directive does not require a rights holder to actually use the IP rights and Mircom was the contractual rights holder.
As for Article 13, the question was whether the prejudice had been suffered by Mircom or by the producers of the films. In the CJEU’s view, assigning the right to claim remedies for infringement of IP rights did not affect the nature of the film producers’ IP rights. Therefore, if a rights holder chooses to outsource the recovery of damages to a specialised company, they should not suffer less favourable treatment than a rights owner who chooses to assert those rights personally.
In its referral to the CJEU, the Belgian court said that Mircom did not necessarily intend to sue users of the network for damages, but rather to use the information it was after in order to extract a lump sum of damages of €500 in settlement of the claim.
Article 8(1) of the Enforcement Directive provides that a request for information must be made in the context of proceedings relating to an infringement of an IP right. However, the CJEU said, seeking a settlement is often a prerequisite for bringing an action for damages. Therefore, the practice itself could not be held to be prohibited. Further, the purpose of Article 8 is to apply and implement the fundamental right to an effective remedy and to ensure the effective exercise of the fundamental right to property, which includes intellectual property, by enabling the rights holder to identify the person infringing and to take action to protect his/her rights. Accordingly, the CJEU said that it could not hold that Mircom’s request for information during a pre-litigation stage was unlawful. However, Article 8(1) of the Enforcement Directive provides that a request must be justified and proportionate, which was for the Belgian court to decide.
The question of abuse was also for the Belgian court to decide. The CJEU suggested that it could examine Mircom’s operating method by assessing the way it offers settlements and ascertaining whether it actually brings legal proceedings where there is no settlement. It could also examine whether Mircom is attempting, under the guise of proposing settlements, to extract economic revenue from individual users, rather than seeking to combat infringements.
For the data protection aspects of this case see N2K 18 to 24 June 2021. (Case C-597/19 Mircom International Content Management & Consulting (M.I.C.M.) Ltd v Telenet BVBA EU:C:2021:492 (17 June 2021) — to read the judgment in full, click here).