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Thursday, 11 September 2014

BREAKING: AG Cruz Cruz Villalón suggests adoption of new 'causal event' jurisdiction criterion for online copyright infringement cases

Intention to target ...
Advocate General (AG) Cruz Villalón is back in (copyright) action! This morning he released his Opinion in Case C-441/13 Pez Hejduk v EnergieAgentur.NRW GmbH [available in, amongst others, Italian but not English!], a reference for a preliminary ruling from Austria seeking clarification as regards matters of private international law, in particular jurisdiction [also an invariably sexy topic of conversation]


Ms Hejduk is a professional photographer who specialises in architectural photography, and resides in Austria. On 16 September 2004, on the occasion of a conference organised by EnergieAgentur [a German-established company], Austrian architect Georg W. Reinberg used a number of photographs, including one taken by Ms Hejduk, representing his works. This particular use had been authorised by the photographer. However, Ms Hejduk had not authorised subsequent use of her photograph by EnergieAgentur, that published it on its website, and allowed anybody to view and download it.

Thus Hejduk sued EnergieAgentur for copyright infringement in Austria (before the Handelsgericht Wien), seeking damages for EUR 4050. The defendant objected to the jurisdiction of Austrian courts, arguing that, since it is established in Germany and its webpage uses a .de top level domain, the competence to hear this case would be of German courts.

Why establishing jurisdiction is not easy

When it comes to alleged online copyright infringements and the damage is difficult to localise, what is the court competent to hear the case? Besides the courts situated in the Member State where the alleged infringer is established [this is the general rule of jurisdiction under Article 2 of Regulation 44/2001, also known as the Brussels I Regulation], what other courts may be competent under the special rule of jurisdiction - applicable to IP cases - enshrined in Article 5(3) of the Brussels I Regulation?

This provision states that "A person domiciled in a Member State may, in another Member State, be sued ... in the courts for the place where the harmful event occurred or may occur".

In the particular case of copyright, this special rule of jurisdiction has proved difficult to interpret, also because - unlike say trade marks [on which see the decision in Coty (here) as the most recent take of the Court of Justice of the European Union (CJEU) on jurisdiction] our favourite IP right is not subject to any formality. In addition, although subject to the principle of territoriality, copyright must be protected everywhere across the territory of the EU in compliance with the InfoSoc Directive.

All this also puzzled the Handelsgericht Wien, which decided to stay the proceedings and seek guidance from the CJEU as to the following:

Is Article 5(3) of Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters to be interpreted as meaning that, in a dispute concerning an infringement of rights related to copyright which is alleged to have been committed in that a photograph was kept accessible on a website, the website being operated under the top-level domain of a Member State other than that in which the proprietor of the right is domiciled, there is jurisdiction only
–    in the Member State in which the alleged infringer is established; and
–    in the Member State(s) to which the website, according to its content, is directed?

... or mere accessibility?
Intention to target or mere accessibility?

In its late 2013 decision in Case C-170/12 Pinckney [herehere and here], the CJEU shocked everybody by rejecting the so called 'intention to target' approach adopted in earlier cases such as Sportradar [here and here -- a database right case though], thus also departing from the Opinion [hereof AG Jääskinen. The ‘intention to target’ approach means that the courts situated in the Member State whose public has been targeted by the alleged infringer have jurisdiction.

AG Jääskinen himself was baffled by the Court's decision, and made this eloquently clear in his Opinion in Coty [see in particular paras 66 ff].

In Pinckney the CJEU embraced instead an 'accessibility criterion', and took the view that the special rule in Article 5(3) of the Brussels I Regulation "must be interpreted as meaning that, in the event of alleged infringement of copyrights protected by the Member State of the court seised, the latter has jurisdiction to hear an action to establish liability brought by the author of a work against a company established in another Member State and which has, in the latter State, reproduced that work on a material support which is subsequently sold by companies established in a third Member State through an internet site also accessible with the jurisdiction of the court seised. That court has jurisdiction only to determine the damage caused in the Member State within which it is situated."

In other words, as the CJEU later summarised in Hi Hotel [here -- a case concerning off-line infringements though], "jurisdiction to hear an action in tort, delict or quasi-delict may be established in favour of the court seised of a claim for a finding of a breach of copyright, where the Member State in which that court is situated protects the rights of copyright relied on by the applicant and the alleged damage may occur within the jurisdiction of the court seised."

All this means that it is sufficient that the allegedly infringing content is accessible online from a certain Member State for the courts situated on that territory to have special jurisdiction. In any case, this special rule of jurisdiction would allow the courts seised to award only the damages occurred in the territory where they are situated.

The way the Handelsgericht Wien formulated its questions in Hejuduk is already quite interesting per se, as one has the impression that this court believes that 'intention to target' is a jurisdiction criterion anyway. The point is: is this true? Are there any other criteria besides this (and the general rule ex Article 2)?

Neither, says the AG:
it is the place of the 'causal event'
The AG Opinion

As a preliminary observation, the AG highlighted the peculiarities of the case at hand, which make it different from Pinckney

Unlike in Pinckney in fact [a case concerning unauthorised reproduction and online distribution of musical CDs]Hedjuk concerns the rights over a photograph which has been made available on a website without the rightholder's consent. 

The case of photographs has "very different characteristics from those of the online sale of a product", in that "it concerns a divulgation that can hardly be considered as occurring in a specific place that can be defined according to a territoriality criterion. On the contrary, the damage becomes «dematerialised», ie it becomes diffused and therefore is «delocalised», thus making it more difficult to determine the place where it occurred pursuant to Article 5(3)".

The AG observed that this case will allow the CJEU to determine whether, in circumstances like those at hand in which there has been a «delocalised» damage through the internet, one must follow the criterion adopted in Pinckney, or rather "explore a different way".

After reviewing all the possible jurisdiction criteria developed by the CJEU, ranging from the eDate criterion of the 'centre of interests' to that of the 'intention to target', the AG concluded for their inadequacy. With particular regard to the Pinckney criterion he agreed with the Commission that had observed that limitation on damages might prove ineffective in a case like that of Ms Hejduk. Not only would it be difficult for the defendant having potentially to face actions in multiple Member States,but also the plaintiff would have limited benefits from seeking limited damages in more jurisdictions.

Therefore, the AG suggested that, "in the event of «delocalised» damages over the internet concerning copyright economic rights, the best option is to exclude the possibility to sue before the courts of the Member State where the damage occurred and reserve instead the competence, at least that based on Article 5(3) ..., to the judges of the Member State in which the causal event occurred. Furthermore, this option does not exclude at all jurisdiction based on Article 2 of the Regulation". 

The AG concluded his Opinion by advising the CJEU to use, unlike him, some punctuation and to rule as follows: "Article 5(3) of Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters must be interpreted in the sense that, in a controversy concerning the infringement over the internet of rights relating to copyright from which a "delocalised" damage has arisen which is not possible to determine according to a territoriality criterion on the basis of reliable elements of proof, the competence lies with the judges of the place where the causal event took place."

This conclusion looks pretty sensible to this Kat and is perhaps more workable than the targeting and accessibility criteria. We'll see if the CJEU agrees!

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