Public Wi-Fi In Addition To Liability For Illegal Downloads: The Cjeu Judgment Inwards Mcfadden

Lorna Woods, Professor of Internet Law, University of Essex

Is a work concern which offers complimentary wi-fi to its customers liable if they download content unlawfully? That was the master copy number inwards the recent CJEU judgment inwards McFadden, a rare instance on Article 12 of the EU’s eCommerce Directive, which provides that the provider of an information lodge service is non liable for the transmission of information if it is a ‘mere conduit’ (as farther defined) of that information.  While must of the conclusion seems to stand upward for good into existing police on intermediaries as well as the provisions of services inwards general, at that topographic point are a duad of potentially unexpected developments: those relating to costs for injunctive relief; as well as the requirements of those providing access to the Internet.

Facts

McFadden runs a lighting as well as audio organisation store inwards which he offers complimentary access to a wi-fi network to the full general world inwards monastic tell to depict the attending of potential customers to his goods as well as services.  This network was used to download only about content unlawfully. The inquiry was whether McFadden was indirectly liable (for non making his network secure) or whether he could rely on intermediary immunity from liability contained inwards the e-Commerce Directive.

Judgment

The commencement requirement for mortal to survive able to rely on the e-Commerce Directive is to present that that torso is an information lodge service provider inside the price of the Directive.  The work hither is that the wi-fi was provided complimentary of charge, so does McFadden render an economical service to convey himself inside the TFEU?

The key requirement is that a service is i which is ‘normally provided for remuneration’ (as flora inwards the instance police on Article 57 TFEU, which defines ‘services’ for complimentary drive purposes, equally good equally Article 1(2) of Directive 98/34, which sets out rules on consulting virtually novel technical barriers to information lodge services).  Referring to Recital xviii of the e-commerce directive, the Court confirmed that nether a proper interpretation of the Definition of ‘information lodge service’ inwards Article 12(1) of the directive, ‘cover solely those services commonly provided for remuneration’ (para 39).

Applying this regulation to this context, the Court noted “it does non follow that a service of an economical nature performed complimentary of accuse may nether no circumstances constitute an ‘information lodge service’” (para 41).  For example, the service may survive paid for past times a 3rd party, equally is the instance inwards complimentary to air goggle box which is frequently financed through advertising revenue rather than viewer subscription.  Here McFadden was providing the service equally an advertising technique, so the Court concluded that the provision of wi-fi brutal inside Article 12 (para 43).

The Court as well as so considered the application of Article 12. The national courtroom recognised that a commencement requirement would survive the transmission of content, but questioned whether other weather – notably the existence of a contractual human relationship – would also survive required.  The Court confirmed that transmission is required as well as – next the wording of the recital 42 – that the activity of transmission equally a ‘mere conduit’ is of a mere technical, automatic as well as passive nature (para 48).  While the Court accepted that at that topographic point mightiness survive an interpretation of the German linguistic communication language version that suggested the existence of farther requirements, at that topographic point was no such aspect inwards other linguistic communication versions.  In the interests of a uniform interpretation of the directive across the diverse linguistic communication versions, the Court concluded that at that topographic point were no farther weather to survive satisfied (para 54).

The adjacent inquiry related to the types of immunity from liability, the provisions inwards relation to mere conduit, caching as well as hosting beingness expressed inwards slightly unlike terms.  So patch Article fourteen requires a host to deed expeditiously on becoming aware of illegal content to proceed to produce goodness from immunity, at that topographic point is no such requirement inwards Article 12.  The Court suggested (as the Advocate General had done) that this departure may resultant from the unlike nature of the services provided. In particular, a host may lead keep greater chance to seat illegal content than a mere conduit.  On this basis, the Court idea it inappropriate to imply a status that a mere conduit should survive required to deed expeditiously into Article 12 (para 65).

The national courtroom farther questioned whether Article 12(1), read inwards conjunction alongside Article 2(b), was to survive interpreted equally pregnant that at that topographic point were additional weather beyond that inwards Article 12 to which a service provider providing access to a communication network would survive subject.  Again, the Court rejected this suggestion on the footing that it should non disturb the residuum betwixt the diverse interests achieved past times the legislature (para 68-69).

The Court as well as so considered the type of relief which an injured 3rd political party mightiness claim, as well as specially whether such a political party could assay injunctive relief against a mere conduit.  While Article 12 precludes a damages claim, as well as claims for costs (paras 74-75), according Article 12(3) a national courtroom may monastic tell the mere conduit to pick out activity to halt the infringement of copyright (para 76), notably injunctive relief.  Costs inwards honour of such an activity may survive claimed (para 78).

The adjacent prepare of questions concerned the measures that mightiness survive required of a mere conduit, given the relevance of Article 17(2) of the European Union Charter of Fundamental Rights (EUCFR) (right to intellectual property), Article xvi EUCFR (right to behave a business), as well as Article eleven EUCFR (freedom of expression).  The Court, adopting a margin of appreciation trend approach, recognised that inwards instance of conflict of rights it is for the national regime to ensure a fair residuum of interests (citing the CJEU ruling inwards Promusicae) (para 83).  The national courtroom envisaged iii possible measures McFadden could take:

-          examining all communications passing through an network connection,

-          terminating that connexion or

-          password-protecting it.

Article fifteen precludes requiring intermediaries to monitor traffic as well as hence the commencement obligation would survive opposite to the  price of the eCommerce Directive. Requiring McFadden to terminate the connexion would constitute a serious interference alongside his rights to run a work concern nether Article xvi EUCFR as well as so cannot survive considered equally reaching a ‘fair balance’ (paras 88-89). The 3rd mensurate also constitutes a restriction of Article xvi equally good equally the Article eleven rights of users. In neither instance, however, is the essence of the correct undermined.  The Court noted that ‘the mensurate adopted must survive strictly targeted, inwards the feel that it must serve to convey an halt to a 3rd party’s infringement of copyright or of a related correct but without thereby affecting the possibility of network users lawfully accessing information using the provider’s services’, equally otherwise the mensurate would – next the CJEU ruling inwards UPC Wien – survive disproportionate (para 93).  Securing the network past times password protecting it (but non blocking access to whatsoever detail content)

‘may dissuade the users of that connexion from infringing copyright or related rights, provided that those users are required to let out their identity inwards monastic tell to obtain the required password as well as may non hence deed anonymously’ (para 96).

Given that this 3rd pick is the solely possible option, non securing the network would resultant inwards the correct to intellectual belongings beingness deprived of whatsoever protection. Requiring password protection hence strikes a fair balance.

Comment

In price of next its Advocate General to observe a complimentary service to autumn inside the compass of the e-Commerce Directive (and indeed the treaty framework) the Court’s approach is non unexpected.  This is a long-standing approach of the Court inwards relation to services inwards full general – indeed the Court refers to onetime goggle box jurisprudence equally authorization – as well as also follows its approach inwards Papasavvas (C-291/13), which related to an online service which was funded through advertising revenue, rather than direct payments past times users. 

This approach is potentially necessary inwards the context of the Internet, where many services are provided ‘free’ but inwards actual fact paid for past times advertising or other secondary uses of user data.  Nonetheless, it is worth noting that inwards McFadden at that topographic point was only about economical context: McFadden was using the offering of complimentary wi-fi equally a shape of advertisement.  The extent to which only about such connexion is required has non been addressed.  The Advocate General noted that 'there is no involve to consider whether the compass of Directive 2000/31 [the e-commerce Directive] mightiness also extend to the functioning of such a network inwards circumstances where at that topographic point is no other economical context' (para 50).  The Court did non address this at all.

The judgment contains lilliputian novel equally far equally the weather for the application of Article 12 are concerned, though it is possibly useful to lead keep the confirmation that farther weather should non survive implied into the Directive. 

The Court determined that Article 12 (and presumably also Articles thirteen as well as 14) give protection against costs – which equally the Advocate General noted – could survive equally punitive equally damages themselves.  Note withal the distinction betwixt an activity for damages as well as an activity for injunctive relief.  Article 12 does non protect an intermediary from beingness on the receiving halt of an injunction, as well as the prohibition on costs does non extend to costs incurred inwards relation to given notice or an activity for an injunction.  This is a departure inwards approach from that of the Advocate General as well as may survive important for those companies which lead keep challenged injunctions.  The litigation inwards England as well as Wales inwards regard to blocking injunctions for trademarks inwards Cartier may survive a instance inwards point.

The extent to which intermediaries are nether an obligation to lay an halt to infringing deportment past times halt users has been the discipline of much give-and-take as well as this judgment is useful inwards bringing only about clarity.  The Court locates this give-and-take inside the framework of telephone substitution rights, as well as starts off past times indicating that this is a thing for national regime – seemingly taking a leafage out of the Strasbourg court’s majority on margin of appreciation. In practice, however, the Court gives a pretty clear steer to the national courtroom on the ‘right’ outcome as well as inwards this at that topographic point is a marked departure betwixt its approach as well as that of the Advocate General.  Both handgrip that the commencement 2 possible measures are non possible. The Advocate General took the see at para 145 of his thought that imposing safety obligations

'would non inwards itself survive effective, as well as thus its appropriateness as well as proportionality stay opened upward to question'.

He also idea that forcing password protection could discourage or hinder usage of the WiFi service, undermining the work concern model of the operator. In contrast, the Court stated that the password protecting of the network is permissible; indeed, it could survive seen equally suggesting that the enforcement of copyright requires the network to survive protected equally the solely agency to protect Article 16. Does this advise that all networks would survive required to impose such measures on the lead chances that mortal mightiness utilisation them to infringe copyright? On that basis, this judgment could lead keep worrying implications for anonymity on the Internet, as well as sure enough may lead keep implications for the evolution of wi-fi/public access services.

Photo credit: www.amazon.co.uk

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