The European Court of Justice (ECJ) has made a milestone ruling on the use of hyperlinking and copyright infringement online in the case of Stichting Brein v Jack Frederick Wullens.

The decision concluded that the sale of a set-top multimedia player which allows, through hyperlinks, users to stream protected content online, amounts to the breach of a content holder’s rights.

Facts

The defendant was selling a physical set-top multimedia player called Filmspeler. Once connected to a screen and taken online, users could access and stream copyright protected material, as add-ons containing hyperlinks to sites that streamed such content were installed within the media player prior to their sale. Users were able to watch live sporting events as well as films and television shows, without obtaining consent from, or paying, any of the content’s rights holders.

The claimant, a Dutch foundation whose purpose is to protect copyright, commenced proceedings against the defendant in July 2014, with particular legal matters being referred to the Advocate General and subsequently the ECJ.

Legal Issues

Authors are granted the exclusive right to approve or refuse the reproduction or communication of their work to the public under Articles 2(a) and 3(1) of the Copyright Directive (2001/29/EC), otherwise known as the InfoSoc Directive.

There is an exception to this rule under Article 5(1), which permits the creation of temporary copies of protected work, so long as the copies are transient or incidental and essential and integral to a technological process. The reproductions must be made for “lawful use” as defined under 5(1)(b) of the InfoSoc Directive. Streaming material online creates temporary copies of content on a user’s computer, and consideration of whether the exception could be applied in this context was required.

The issue of whether posting hyperlinks to protected works that were already freely available without the consent of rights holders constituted “a communication to the public” was considered in GS Media. Importantly, it may be considered as such if the person posting the hyperlink was pursuing financial gain by posting that link.

With this in mind the questions posed to the ECJ can be summarised as follows:

  1. Is there a “communication to the public” under the InfoSoc Directive when a party sells a product which has preinstalled add-ons containing hyperlinks that allow users to stream protected material without the consent of the rights holders?
  2. In light of 1 above, does it make a difference that:
    • The material streamed has not been published online, or has been but through subscriptions with the consent of the rights holder;
    • The users could have installed the add-ons containing the hyperlinks themselves;
    • The websites that the hyperlinks led users to were accessible to the pubic without the media player.
  3. Does Article 5 of the InfoSoc Directive mean there is no “lawful use” where the material is offered without the rights holders’ consent?
  4. If the answer in 3 above is no, is the making of a temporary reproduction in these facts contrary to the test in Article 5(5) of the InfoSoc Directive?

Decision

In answer to the first two issues above, the ECJ stated that the sale of the media players did constitute “a communication to the public” under the InfoSoc Directive definition.

The defendant, by pre-installing the add-ons containing hyperlinks which directed the user to sites allowing for the streaming of protected works without the consent of the rights holders, was enabling the public to easily access protected material, which otherwise would have been difficult to locate. The fact that many of the streaming sites were changed regularly and were not readily identifiable via a search engine meant the act of selling became a new method of communication.

The sale was also deemed to be a communication to a new public, as it increased the number of users who may have been able to access the works. The rights holders had not intended for their material to be streamed by those who had done so without their consent, ultimately creating a communication to a new public.

Filmspeler’s marketing slogans, like “Never pay for films, series, sport…” and “Want to watch free films, series, sport without having to pay? Who doesn’t?!”, showed that the defendant’s intention was to make a profit, and GS Media was applied directly.

To answer issues 3 and 4 above, the ECJ ruled that by creating a temporary copy of the protected works (by streaming such content), without the permission of the rights holder did not constitute “lawful use”. The creation of such reproductions was ultimately contrary to protecting the rights of content owners, as required by Article 5(5).

Conclusion

The EU’s continuing effort to close the “value gap”, which seeks to more efficiently monetise and correctly value artistic assets, has been realised in this instance. By widening the definition of a communication to the public and continuing to narrowly interpret the exception under Article 5(1), the decision has given rights holders a broader scope to pursue potential infringers.

Interestingly, the Derbyshire Council Trading Standards in the United Kingdom stated that illegally streaming protected content would not impose liability on the user. However, the inability to rely on the Article 5(1) exception, because the copies themselves were not created lawfully, means there is scope that users streaming content may now be liable where the user has not been given consent