Case Summary and Outcome

An internet service provider that allows users to access copyrighted material on its website acts as an intermediary for purposes of Article 8(3) of European Union Directive 2001/29/EC (Directive). As such, a national court may issue an injunction against an internet service provider that is allowing access to copyrighted material on their website. This, however, must be balanced with public interest in accessing the information.

Facts

A website was allowing the downloading and streaming of films without permission of two film companies, Constantin Film and Wega. The companies referred the matter to the courts in an attempt to obtain an injunction that would require UPC Telekabel (UPC), an internet service provider, to block access to their films to its users.

The Commercial Court in Austria ruled in favor of the film companies and required UPC to block the content. UPC appealed to the Austrian Higher Regional Court, which partially reversed, but only as to the means by which UPC had to block the aforementioned content. UPC then appealed to the Supreme Court of Austria, which stayed the proceedings and referred various questions of law to the Court of Justice of the European Union.

Decision Overview

The Court of Justice of the European Union first examined the question of whether, under Article 8(3) of the Directive, “a person who makes protected subject-matter available to the public on a website without the agreement of the rightholder, for the purpose of Article 3(2) of that directive, is using the services of the internet service provider of the persons accessing that subject-matter, which is to be regarded as an intermediary.” UPC argued that it could not be considered an intermediary for purposes of this provision. The Court disagreed, finding that an Internet service provider that allows users to access copyrighted material on its website is considered an intermediary under the Directive and that no contractual relationship between the intermediary and those whose copyright the intermediary is violating need exist. In light of the analysis of the first question, a second question was not addressed because it would only have been applicable if the court had found UPC was not an intermediary.

Next, the Court turned to a third question, which asked “whether the fundamental rights recognised by EU law must be interpreted as precluding a court injunction prohibiting an internet service provider from allowing its customers access to a website placing protected subject-matter online without the agreement of the rightholders when that injunction does not specify the measures which that access provider must take and when that access provider can avoid incurring coercive penalties for breach of that injunction by showing that it has taken all reasonable measures.” The Court noted that this question implicated the Charter of Fundamental Rights of the European Union and that when fundamental rights are at issue, the Court must strike a balance between the rights protected and the legal order of the European Union. National law must then be interpreted in accordance with the directives of the European Union and must not interfere with fundamental rights.

The Court found that an injunction in this case would not infringe upon the fundamental right to conduct business because the injunction in the case at bar would allow UPC to decide upon the measure to put in place to protect against this type of copyright infringement. The injunction would also allow UPC to avoid liability by showing that it has taken all the necessary precautions. The Court also found that the issuance of an injunction would not infringe on the rights to intellectual property, because this right is not absolutely protected and must be balanced against the public interest.

In conclusion, the Court held “the fundamental rights recognised by EU law must be interpreted as not precluding a court injunction prohibiting an internet service provider from allowing its customers access to a website placing protected subject-matter online without the agreement of the rightholders when that injunction does not specify the measures which that access provider must take and when that access provider can avoid incurring coercive penalties for breach of that injunction by showing that it has taken all reasonable measures, provided that (i) the measures taken do not unnecessarily deprive internet users of the possibility of lawfully accessing the information available and (ii) that those measures have the effect of preventing unauthorised access to the protected subject-matter or, at least, of making it difficult to achieve and of seriously discouraging internet users who are using the services of the addressee of that injunction from accessing the subject-matter that has been made available to them in breach of the intellectual property right, that being a matter for the national authorities and courts to establish.”