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Europe’s top court has ruled that so-called copyright trolls can demand cash settlements from alleged BitTorrent pirates. Clarifying that sharing fragments of data associated with BitTorrent transfers still represents a communication to the public, the EU Court of Justice says that cases can be pursued but only when local courts consider them to be non-abusive, justified, and proportionate.
Cyprus-based Mircom International Content Management & Consulting (Mircom) is a well-known entity in the world of copyright trolling.
The company acts as a middle-man between rightsholders and legal action against alleged pirates from whom it demands cash settlements to make supposed lawsuits disappear.
Mircom and controversy are rarely far apart. In 2019 the High Court in the UK threw out its efforts to obtain the identities of Virgin Media customers and in Denmark it was accused of filing cases it had no right to file.
Demands For Subscriber Data in Denmark Face Opposition
In 2019, Mircom demanded that Telenet, the largest provider of cable broadband in Belgium, should hand over the personal details of subscribers behind thousands of IP addresses alleged to have downloaded pornographic movies using BitTorrent.
Telenet, supported by fellow ISPs Proximus and Scarlet Belgium, fought back at the Antwerp Business Court (Ondernemingsrechtbank Antwerpen) in an effort to protect their customers. As part of that process, the local court referred several questions to the EU Court of Justice (CJEU) for clarification.
The first question centered on the nature of BitTorrent and sought to establish whether downloading and uploading fragments of a copyrighted work (which in their own right are unusable) amounts to a ‘communication to the public’ under the Copyright Directive.
The second sought clarification as to whether a contractual holder of a copyright (licensee) that does not exploit those rights (other than via demands for settlements in legal action) has the same rights as a regular rightsholder.
Ruling By The EU Court of Justice
On whether uploading fragments of a copyrighted work constitutes an infringement, the CJEU clarifies that even though the pieces are individually unusable, users effectively give their consent to sharing those pieces after being “duly informed” of their characteristics.
“By downloading the pieces of a file, that user simultaneously makes them available for uploading by other users. In that regard, the Court finds that the user must not in fact download a minimum threshold of pieces and that any act by which he or she gives access to protected works in full knowledge of the consequences of his or her conduct may constitute an act of making available,” its decision reads.
On the second matter, which concerns an entity like Mircom that doesn’t exploit its rights other than to claim damages from alleged infringers, the Court found that there is no fundamental barrier to that under EU law, provided certain conditions are met.
Specifically, the copyright trolls’ claims must not be considered “abusive” but the thresholds for that must be determined on a local level by member states’ courts, something that could lead to a difference of opinions within the bloc. However, the CJEU does offer an example that sits at the heart of many copyright troll campaigns – the lack of lawsuits to demonstrate that copyright trolls will sue if compensation isn’t paid.
“The Court states that any finding of such an abuse is a matter for the referring court, which could, for example, ascertain, for that purpose, whether legal proceedings have actually been brought in the event of an amicable settlement being refused,” the Court notes.
“As regards, in particular, a request for information, such as that made by Mircom, the Court finds that it cannot be regarded as inadmissible on the ground that it is made during a pre-litigation stage. However, that request must be rejected if it is unjustified or disproportionate, which is for the referring court to determine. By that interpretation, the Court seeks to ensure a high level of protection of intellectual property in the internal market.”
IP Address Collection and Processing
The IP addresses in Mircom’s possession were recorded on its behalf by the FileWatchBT software operated by Germany-based Media Protector GmbH. Telenet raised questions over the lawfulness of the manner in which the IP addresses were collected but the Court found no fundamental issues.
Referencing the Copyright Directive, the CJEU found that nothing within precludes, in principle, the “systematic recording, by the holder of intellectual property rights as well as by a third party on his or her behalf, of IP addresses of users of peer-to-peer networks whose internet connections have allegedly been used in infringing activities.”
The Court further identifies no barriers to the communication of the names and postal addresses of those users to a rightsholder or third party to enable a claim for damages in a civil court. However, any initiatives and requests must be “justified, proportionate and not abusive” and have their basis in national legislative measures. Again, that will be something for local courts to determine.
The decision by the CJEU broadly follows the recommendations by Advocate General Szpunar published last year.
The CJEU’s summary and full ruling can be found here and here
Many thanks to TorrentFreak for the breaking news.