Do passive hosting providers commit acts of communication to the public in relation to third-party content?

Still on the leaked IA ...

This may not be just a good exam question for undergraduate IP law students [note to self: something for next year], but also lawyers and policy-makers currently discussing EU copyright reform.

As reported by this blog, earlier this week Statewatch leaked a draft version of the Commission Staff Working Document - Impact Assessment on the modernisation of EU copyright rules [it is however unclear whether the one leaked is the version currently being considered by the Commission].

The document is extremely interesting for various reasons. Among the things, the Commission addresses the problem of right holders facing great difficulties, or being unable, "to negotiate with online service providers that store and give access to large amounts of protected content uploaded by their users. This results in right holders having limited control over the use and the remuneration for the use of their content." [p 124, the so called 'value gap'].

After describing the terms of the problem, the Commission notes [pp 128-129] the following:

"Under copyright law, right holders can exercise their right to authorize and exploit commercially the communication to the public of their works or other protected subject-matter, by the conclusion of licenses in return for payment of remuneration, if they so choose. When content is disseminated online, an act of communication to the public [within Article 3 of the InfoSoc Directive] takes place which may, depending on the circumstances, involve more than one actor. The Court of Justice of the European Union (CJEU) has not addressed the specific case of online services giving access to content uploaded by their users. With some exceptions, national case law is not very clear either as to who engages into an act of communication to the public when content is uploaded on a sharing website. As a result, a case by case assessment is needed for deciding who is communicating to the public."

Is this true however?

In my view [elaborated in this article], the current legislative framework - including at the CJEU level - already provides a response in this respect: passive [in the L'Oréal sense] hosting providers cannot be held primarily responsible for acts of communication to the public in relation to content provided by third parties and made available through their services.

Exercising at Reha Training

The Reha Training decision

With particularly regard to the right of communication to the public, this conclusion (applicable by analogy to other exclusive rights) appears supported by relevant CJEU case law, including the recent decision in Reha Training [here]. 

There the CJEU held that, in assessing the existence of an act of communication to the public, several criteria – each of which non-autonomous but rather interdependent in nature – should be taken into account. These criteria may come into consideration differently in different scenarios. This said, the concept of 'communication to the public' combines two cumulative elements: (1) an 'act of communication' that is (2) directed to a 'public'.

The first criterion, ie an ‘act of communication’, includes any transmission of a copyright work, irrespective of the medium used or the technical means employed. Each transmission or retransmission of a work that uses a specific technical means should be in principle individually authorised by the relevant rightholder.

Turning to the second criterion (that the communication at issue be directed to a ‘public’), the term 'public' refers to an indeterminate number of potential recipients, and also implies a fairly large number of people (ie above de minimis). In addition, to fall within the concept of 'communication to the public' a work must be directed to a 'new public", ie an audience that was not taken into account by the relevant rightholder when he authorised the initial communication of the work.In this context, it is necessary to take into consideration the indispensable role of the user without whom the ‘new public’ would not have access to the copyright work in question. More specifically,  

“in order for there to be a communication to the public, that user must, in full knowledge of the consequences of its actions, give access to the … protected work to an additional public and that it appears thereby that, in the absence of that intervention those ‘new’ viewers are unable to enjoy the … works”. [para 46]

Although to have an act of communication to the public several criteria should be considered, it appears that the indispensable role of the user may be a conditio sine qua non for Article 3(1) of the InfoSoc Directive to apply, at least in the interpretation of Article 3(1) recently provided by Advocate General (AG) Wathelet in GS Media [here].

GS Media: where it all started ...

The AG Opinion in GS Media

GS Media is a reference for a preliminary ruling from the Dutch Supreme Court, seeking clarification on whether linking to unlicensed content is to be regarded as an act of communication to the public. 

In his Opinion AG Wathelet reviewed the two relevant cumulative criteria under Article 3(1) of the InfoSoc Directive: (1) an ‘act of communication’ of a work, (2) directed to a ‘public’. In relation to the former in particular, according to the AG in order to establish an act of communication, “the intervention of the ‘hyperlinker’ must be vital or indispensable in order to benefit from or enjoy works.”

Hyperlinks posted on a website that direct to copyright works freely accessible on another website cannot be classified as an ‘act of communication’: the intervention of the operator of the website that posts the hyperlinks is not indispensable to the making available of the works in question to users. It is rather the intervention of the operator of the website that posts the protected works that is indispensable within Article 3(1) of the InfoSoc Directive.

Conclusion

Further to the decision in Reha Training and the AG Opinion in GS Media [yet, it is to be seen whether the CJEU agrees with AG ...], it is arguable that – in the case of a copyright work made available through the service of a passive online intermediary (host) – the latter would not commit an act of (unauthorised) communication to the public (potentially giving rise to primary liability for copyright infringement), because the role that is ‘indispensable’ in the whole process is the one of the third-party/uploader, rather than that of the hosting provider. 

A passive hosting provider does not do any of the acts restricted by copyright per se, nor does it usually authorise others to do so. 

This conclusion is in line with relevant case law at the level of individual Member States.

The situation would be different if: (i) the provider at hand authorised – contrary to current practices and content of most terms of service – users to upload and share content independently from whether these acts would infringe third-party rights; (ii) the provider was aware of the infringing nature of the content uploaded; or (iii) the provider played an ‘active role’ in the L’Oréal sense. These scenarios would however lead to situations similar to the ones envisaged – and sanctioned – by the current wording of Article 14 of the Ecommerce Directive.

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For those interested, a more detailed discussion is presented in this article of mine.