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FTD v Eyeworks

Translation kindly supplied by Dirk Visser
(Prof. dr. D.J.G. Visser, Advocaat (Klos Morel Vos & Schaap) & Professor of Intellectual Property law (Leiden University)

Pb. 75988, 1070 AZ Amsterdam (Visiting address: Weteringschans 24, (1017 SG) Amsterdam)
T + 31 20 577 3576      F + 31 20 578 9516)

LJN: BO3980, Court of 's-Gravenhage , 200.069.970/01


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Date of judgement:
15-11-2010
Datum of publication:
15-11-2010
Area of law:
Commercial matter
Type of proceedings:
Summary appeal
Outline of content:
FTD has not committed any copyright infringement, nor is it an intermediary within the meaning of Article 26d of the Copyright Law. FTD has, however, acted wrongfully vis-à-vis Eyeworks by encouraging the illegal uploading of the movie entitled 'Komt een Vrouw bij de Dokter' from Eyeworks. Downloading from an illegal source is permitted under Dutch law, which means that facilitating the downloading of the film cannot be viewed as an unlawful act by FTD.
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Judgement
COURT of ’s-GRAVENHAGE
Commercial Section

Case number: 200.069.970/01

Court list number: 10-639

Ruling by the 5th Civil Division handed down on 15 November 2010

in the matter of

FTD B.V.,
established in Hilversum,
Appellant,
hereinafter referred to as: FTD,
Counsel: G. Brunt in Haarlem,

versus

EYEWORKS FILM & TV DRAMA B.V.,
established in Amsterdam,
Respondent,
hereinafter referred to as: Eyeworks,
Counsel: P.J.M. von Schmidt auf Altenstadt in ‘s –Gravenhage.


Course of the proceedings

By way of the writ relating to the appeal petition dated 29 June 2010, FTD initiated an expedited appeal against the judgement handed down by the judge at the Court of ’s-Gravenhage on 2 June 2010, pronounced between FTD as
the plaintiff in the main action/ defendant in the counterclaim and Eyeworks as defendant in the main action/plaintiff in the counterclaim. In this writ, FTD listed thirteen grounds of appeal against the judgement, which have been disputed by Eyeworks in its response to the grounds of the appeal.

The parties pleaded their positions at the hearing before the Court of Appeal on 7 October 2010, FTD through its counsel and Eyeworks through D.J.G. Visser, a lawyer based in Amsterdam. The members of counsel made use of briefs in this regard which can be found in the relevant documents. At the time of presenting their pleas, the parties also introduced further document into the proceedings, i.e.:
-   by FTD: documents 6 - 17 (letter dated 28 September 2010), additional information to document 17 (letter dated 1 October 2010, received on 6 October 2010 concerning the most recent legal costs) and documents 18 - 19 (letter dated 30 September 2010);
-   door Eyeworks: document 23 (by way of letter dated 30 September 2010).
The parties then requested a ruling to be given on that day.

Judgement by the Court of Appeal

1. Facts and dispute

1.1   These summary proceedings concern the following. Eyeworks is the producer of and copyright holder relating to the successful Dutch movie entitled ‘Komt een vrouw bij de dokter’. DVDs and BluRays of this movie were delivered to shops on 22 April 2010 for sale and rental from 27 April 2010. On the former date, the first unauthorised copies of the film were uploaded to Usenet (CvA/CvE-rec under 14). FTD provides a facility via which Internet users can exchange information about where to find movies, including ‘Komt een Vrouw bij de Dokter’, and other entertainment files on Usenet. Such movies/entertainment files can then be downloaded. Places where the movie ‘Komt een Vrouw bij de Dokter’ could be found were included in the FTD facility.

1.2.   In the petition dated 10 May 2010, Eyeworks requested the judge at the Court of ’s-Gravenhage, on the basis of Article 1019e of the Code of Civil Procedure, to issue an ex parte ban on FTD to prevent the latter, on pain of payment of a fine, from infringing Eyeworks’ intellectual property rights in relation to ‘Komt een Vrouw bij de Dokter’. In an order dated 11 May 2010, the judge, after considering that FTD was to be regarded as a party making said movie public, granted the request in the form of an order to desist from such infringement. In a writ dated 17 May 2010, FTD then summoned Eyeworks in summary proceedings before the same judge (initiating petition) and applied for the ex parte order to be set aside on the basis of Article 1019e of the code of Civil Procedure. In the counterclaim, Eyeworks requested – conditionally in the case of it being found that FTD was not making the movie public and the ex parte order being revised – that an order be imposed on FTD to desist and continue to desist from its unlawful actions concerning ‘Komt een Vrouw bij de Dokter’. In the ruling handed down on 2 June 2010, the judge, after considering that FTD had made said movie public and that there was a threat of this being repeated if the ex parte order was lifted, rejected the application made by FTD and ordered FTD to pay the ‘entire’ costs of the proceedings in accordance with Article 1019h of the Code of Civil Procedure.

1.3.    FTD appealed against this judgement within the time period permitted. In its initiating petition, FTD listed a number of grounds of appeal against the ruling given in the judgement and the grounds cited for this and again requested, provisionally enforceable where possible, the annulment or, at least, setting aside of the ex parte order, also ordering Eyeworks to pay the ‘entire’ costs of the proceedings in accordance with Article 1019h of the Code of Civil Procedure. FTD’s grounds of appeal have to present the full extent of the dispute to the court. In its response to the grounds for the appeal, Eyeworks submitted that:
primarily: that the appeal be dismissed and declared unfounded and that the judgement and ex parte order be upheld;
alternatively: that the appeal be dismissed and declared unfounded and that the judgement and ex parte order be upheld on the alternative basis of Article 26 of the Copyright Law in conjunction with Article 6:162 of the Civil Code;
alternatively (as conditional counterclaim): that an order be imposed on FTD to desist and continue to desist from all unlawful actions vis-à-vis Eyeworks on pain of payment of a fine in the sum of € 10,000.00 for every day or part thereof that FTD does not comply with the order, also ordering FTD to pay the ‘entire’ costs of the proceedings for the ‘ex parte’ ban, the summary rescission proceedings and the appeal against the same.
  FTD has disputed the alternative applications made by Eyeworks (also in the first instance) – which the judge did not accede to – both at the court of first instance and at the court of appeal.

2. The activity of FTD

Introduction

2.1  To start with, it has to be examined in what manner the downloading referred to in recital 1.1 takes place and what role is played by the FTD facility in this regard.

The activity of Usenet

2.2   The starting point for the examination is the so-called Usenet, whereby FTD is not involved in its creation and operation. Usenet is originally a discussion network in which people took part in discussions via the posting of text files. In order to be able to upload and download files via Usenet, users have to be registered with a Usenet provider. That provider then grants access to its ‘news server’, comprising a (number of) large hard disk(s) on which users can place messages. The files are placed on the news servers in ‘news groups’. The news servers send the current content of the news groups to the news servers of other providers and vice versa (‘synchronisation’), meaning that the material offered on the news servers can increase exponentially. At present, Usenet is mainly used as a means of disseminating and downloading movies, TV programmes, games and other software. The parties are in agreement on this.

2.3   Based on the positions of the two parties, the report dated 20 September 2010 by A. Van Veen, computer expert affiliated to Agritect Advis B.V., commissioned by (among others) the counsel of FTD and deliberated on by FTD in its document no. 6, as well as document no. 18 from FTD on appeal, the following can first be stated about uploading (also referred to as ‘posting’) and downloading via Usenet.
-  Uploading: as remarked under 2.2 above, Usenet was initially a service where users could post and read text-based reports/messages (‘articles’). An ‘article’ is subject to a maximum size, i.e. around 60,000 characters. At a given moment, a need also emerged for non-text-based files, such as films, to be provided within the Usenet community. However, the news groups and articles setup does not support this, which is why a trick was used comprising the image files being split into several files of a maximum of 60,000 characters each with technical coding as ‘articles’. In the procedure, the articles are referred to as ‘binaries’ on account of their containing binary information (zeroes and ones) instead of normally readable text information. By virtue of it also not being possible to post files larger that 150 MB in a newsgroup in one go, compression software available on the Internet (such as WinRAR) is used to cut up large files that have been converted into ‘articles’ so as to form a set of tens or hundreds of small files, known as ‘rar files’. Each ‘rar file’ contains approximately 150 articles. The small ‘rar files’ can then be posted to the newsgroup selected by the poster as a set of, sometimes, more than 100 messages.
-   Downloading: Software is needed for downloading (i) so as to be able to use Usenet and obtain access to the news server, (ii) so as to be able to find and reach the (desired) uploaded files, and (iii) to reconstitute the cut up files to form a whole (cf. point 13 if FTD’s plea in the first instance).
Ad (i)  A special software, known as ‘newsreader’, provides the connection to the news server. This type of program (e.g. SabNZB and GrabIt) is available free of charge from the Internet.
Ad (ii)   Various search services (including Binsearch) have appeared on the Internet, which index the most popular news groups (i.e. automatic classifying and collecting of keywords). After carrying out a search on a website like www.binsearch.net (a Usenet search service), the results are made available in the form of an NZB file, taking advantage of the fact that the articles of each entertainment file have a unique number (a ‘message id’). An NZB file contains all the information needed to download an intended file, such as the file name, the location on Usenet and the message ID. An NZB file is therefore a collection of the message ID’s combined in the text file (with the extension .nzb). If the file to be downloaded is presented like a jigsaw puzzle, the NZB not only shows what each piece of the puzzle looks like but also where it is located.
Ad (iii)  The NZB file created on the website is then automatically imported into the news reader, which immediately starts the download. After downloading, the entire series of ‘rar files’ comprising the movie or music album are pasted together by the news reader and converted into the relevant entertainment file.

FTD remarked further that downloading can also be carried out without a search engine and without NZB files, though this then requires greater know-how on the part of the user (initiating petition under point 16). The court understands that a news reader is in any case needed in order to be able to download from Usenet.

2.4   The parties are in agreement that FTD does not have any involvement with the new server, news reader, search services like Binsearch or the NZB format. Eyeworks has itself stated that the technical exchanges take place outside FTD (response to grounds of appeal, point 41).

Disadvantages of Usenet

2.5    Eyeworks states under point 18 of its response to the grounds of appeal that Usenet suffers from the disadvantage that, because of the huge scale of what is offered, the search results obtained via a Usenet search engine like binsearch or via the search function of a newsreader such as SabNZB can be poorly organised and confused. Under point 30 of the initiating petition, FTD acknowledged that it concerns large quantities of information where it is difficult to find one’s way around. In its appeal plea, Eyeworks gave more specific details of its stated position inasmuch as, for example, Binsearch produces a ‘confused mess’ of search results where it is not clear whether these are, for instance, files with viruses or of poor quality. Nor is this disputed by FTD.

2.6   Eyeworks also stated that a large number of movies are offered on Usenet under strange file names from which the movie contained in the file cannot be inferred – so as to prevent tracking by the holders of rights and/or to ensure that the files are only made available to a certain in-crowd – which means that it is not easy to find particular movies quickly. The court disregards the challenging of this position by FTD (point 49 of the appeal petition) given that Eyeworks has introduced document 18a of the bundle relating to the response to the grounds of appeal into the proceedings showing that 26 of the 50 files in which the movie ‘Komt een Vrouw bij de Dokter’ is offered on Usenet had names from which the movie could not be inferred.

The FTD application and operation of the same

2.7  FTD utilises an application (referred to by FTD as the ‘FTD client’) and a platform (a database). Usenet users can place so-called ‘spots’ over the uploaded files on the FTD application. A ‘spot’ contains, according to Eyeworks, information about a file, such as the format, movie type, the number of .rar files a movie is cut up into and the file name under which a movie can be found on Usenet. Copying the file name and pasting it into a Usenet search engine makes it easy to find the desired file. This was expressed as follows in point 13 of the appeal petition.

‘Users read and post messages in this database using the FTD client (i.e. the FTD forum or platform, see point 52 of the appeal petition, court of appeal). With the program (i.e. the FTD client, see point 13 of the appeal petition, court of appeal), the users simply let each other know where and when a message is posted on Usenet. This is referred to as “spotting”. The “spot” is reported on the FTD platform by a user via the FTD client. On account of this information being exchanged, the community knows what files can be found on Usenet and how good the quality is.’
Insofar as far the position of FTD in point 49 of the appeal petition as referred to in recital 2.6 would have to be read as a challenge to Eyeworks’ position that a ‘spot’ also contains information about the file name under which a movie can be found on the Internet, such challenge is disregarded as being insufficiently substantiated. In light of the fact to be assumed in these summary proceedings (see recital 2.6 in fine) that movies are regularly uploaded under file names from which the real names of such films cannot be inferred and in view of the ‘Kudo’ system discussed below under 2.11 via which FTD users are encouraged to place spots that are as useful as possible, it is likely that spots very regularly also contain information about the file name under which a movie can be found on Usenet.

2.8   It has been stated by Eyeworks unchallenged: i) that FTD has created categories like DVD, Divx, Playstation, Xbox and Nintento in which users can arrange information, ii) that the FTD application contains a search function via which the FTD user can easily search to see whether a spot has been placed on FTD for a particular movie, and iii) that the FTD application contains an ‘update’ function, meaning that FTD users can search the most recent content in the database. These facts are also taken as a starting point by the court.

2.9  FTD makes use of so-called moderators, i.e. volunteers that securely monitor the posted spots on FTD’s behalf. According to FTD, a distinction has to be made in this regard between pre-moderation (premod) and end-moderation (endmod). It has explained this as follows (see also document 7 from FTD). Premod (preventive moderations) takes place among spotters who spot something for the first time on FTD. The first six spots by a new spotter are assessed in order to ascertain whether he/she places the spots properly and according to FTD rules. In this regard, it is considered whether:
i. the new spotter places a duplicate of an earlier spot or not; if this is the case, the spot is rejected;
ii. the spot contains the required information; if not, the spot is rejected;
iii. the spot bypasses a security device; if so, the spot is rejected;
iv. the spot contains a hyperlink to an NZB file; if so, the spot is rejected.
Furthermore, a moderator can take a decision to place a spot in the correct category because inexperienced spotters often make the mistake of not stating the right category. Only after approval by the moderator does a spot from a new spotter become visible to the public. Rejected spots do not come into public view. After a new spotter has placed six approved spots and thus has the status of being ‘authenticated’, he/she can place spots that are immediately visible for FTD users without any further intervention by the moderator. Meant by ‘endmod’ is the post-moderation of a spot that has been placed. This occurs on the basis of complaints from the ‘community’, so-called mod-reports. When a user clicks on the ‘moderator’ button in the FTD application, the spot including the complaint is entered in the list (mod queue) for the moderators. Each moderator looks at the mod queue from time to tine and can examine the relevant spot. The complaints can imply that:
a. the spot is a duplicate is; if so, that spot is then removed;
b. the title of the spot is not easy to read; the title is then adjusted by the moderator;
c. words from the title belong to a sub-category; the words are then taken out of the title;
d. the spot has not been placed in the correct (sub-)category; if the complainant stated what (sub-)category the spot belongs in, it is then moved to the right (sub-)category by the moderator; if the reporting party does not state what (sub-)category the spot belongs in, the spot is then moved on the basis of the spot info and/or messages users have posted under the spot, except if it is unclear: the complaint is then rejected and the spot remains where it was;
e. the spot contains undesirable use of language or a call to bypass a security device; the moderator can then apply a sanction, such as issuing warning points, banning the spotter or locking the spot.
This is all according to FTD, which emphasises in this regard that there is no monitoring during premod or endmod whether a spot is correct in terms of content in the sense that is really does describe the film named.

2.10 Eyeworks does not dispute that the moderators only appear proactively during premod and act in an exclusively reactive way with regard to endmod in connection with complaints by users. The explanation by FTD given above concerning the activities of its moderators is, furthermore, not disputed by Eyeworks (in a sufficiently specific or substantiated way), except that, according to Eyeworks - and in contrast to the arguments by FTD – FTD or at least its moderators do monitor whether the spots also actually refer to the titles named in said spots and that spots are removed if this is not the case. However, this position has not been made plausible by Eyeworks, although it was its business to do so, not even by the screen prints submitted by it in the form of document 12D. FTD did explain and state in detail in its document no. 11 that the screen prints only show, however, that the relevant spotter removed his/her spot him/herself or carried out actions attributed to the tasks of a moderator according to the description under paragraph 2.9 above.   

2.11 An FTD user who has placed a ‘spot’ can receive a ‘kudo’ for this from his/her co-users as a token of appreciation. A ‘kudo’ is, as understood by the court, something like a digital hug. It is obvious that ‘kudos’ are handed out by Usenet users in particular when a spot is concerned stating where and under what name a particular film can be found for which a file name is used from which the name of the movie concerned cannot be inferred. FTD keeps a top 25 listing the users that have the most ‘kudos’. In this way, FTD encourages the ‘kudo’ system, which – it can be assumed – constitutes or at least can constitute an incentive in the FTD community to place the best and most useful posts possible as well as, in particular, spots for films posted under strange names.

2.12  During the appeal plea, Mr. Visser (as requested) submitted on behalf of Eyeworks  (in reference to that stated in point 63 of the response to the grounds of appeal) that a large proportion of the spotters on FTD are also people who upload on Usenet. Mr. Visser stated more specifically that 39 of the 50 most prolific spotters also carry out uploads themselves. This position has not been disputed by FTD in a substantiated manner. Mr Brunt and A. van Veen referred to above, who was present at the pleading as an expert for FTD, both declared where requested on behalf of FTD that it could well be/cannot be ruled out that spotters are also involved in uploading. They dispute, however, that this is true for as many spotters as concluded by Mr. Visser. As FTD has not stated what (overall) percentage of spotters are also involved in uploading, whereas it has to be deemed that they can have the information at their disposal, it has to be said in these summary proceedings that a considerable proportion of the spotters are also involved in uploading.

Interim conclusion

2.13    It is established that the downloading of films posted on Usenet is also possible without the FTD application. Through the introduction of the ‘spot’ system, via which Usenet users can draw each other’s attention to the presence of entertainment files on Usenet, and with their measures initiated in this connection to enhance the convenience for users (category classification, search and ‘update function’) and the quality of the spots (the moderator system and the ‘kudo’ top 25), FTD makes downloading (considerably) easier, (partly) because the disadvantages referred to in recitals 2.5 and 2.6 are eliminated to a substantial extent at least. That this offers great advantages for making use of the FTD application when downloading can also be concluded from the fact stated by Eyeworks and not disputed by FTD that the FTD application has more than 500,000 users (point 120 of the response to the grounds of appeal). FTD has itself also submitted that its platform provides ‘value added’ (point 11 of its pleading in the first instance) and that the location information put forward by the users of the FTD platform lead to ‘better material’ (point 85 of the appeal petition). FTD’s defence that it does not encourage downloading and that it does not carry out any activities to promote quality (point 30 of its plea in the first instance) therefore also has to be rejected as being insufficiently substantiated.

III. Primary claim by Eyeworks: is there a case of public disclosure by FTD?

3.1  Eyeworks has submitted as substantiation of its position (see point 38 OF CvA/CvR-rec and points 38, 41 and 109 of the response to the grounds of appeal) that FTD publicly discloses the movie ‘Komt een Vrouw bij de Dokter’ (i) that FTD provides access to the movie through making the spots (‘access keys’) available through its FTD application, (ii) the term ‘making public’ should be interpreted in a broad and functional way, (iii) the mere offering of works qualifies as making them available to the public, irrespective of whether the public does anything with it, (iv) it is irrelevant that the technical exchanges take place outside FTD, and (v) FTD is in any case a ‘co-publicizer’ of the movie. According to FTD, there can be no case of publication within the meaning of the copyright law in connection with its pointing out, among other things, that the user has to go outside the FTD domain in order to be able to conduct a download and that FTD ‘is not independently involved in the actual action of publication leading to access for the public’ (appeal pleading under points 25 and 27).

3.2   The author’s right of publication is established in Articles 1 and 12 of the Copyright Law. The European Law version of this is the ‘right of communication of the work to the public’ under Article 3 of Directive 2001/29 EC of the European Parliament and Council dated 22 May 2001 concerning the harmonisation of certain aspects of copyright and related rights in the information society (hereinafter referred to as: the Copyright Directive). It is established case law of the Court of Justice of the European Communities (CoJEC) that a directive – which places the Member States under an obligation to implement the provisions set out in the directive in the respective national legislation – cannot in itself impose obligations on private individuals directly or indirectly and that a provision of a directive cannot be invoked as such against a private individual. This does not alter the fact that a directive does have significance in a dispute between private individuals only. The Court cites the following considerations from the judgement handed down by the CoJEC on 5 October 2004 in the ‘Pfeiffer’ (joined cases C-397/01 to C-403/01):
113. The national judge must (…), when applying national law and, in particular, in the case of a national regulation especially established for the implementation of a directive, interpret the national law as far as possible in the light of the wording and objective of the directive concerned (…).
114. The requirement of interpretation of national law in line with the directive is inherent in the system of the treaty since the national judge enables the assurance of the full operation of Community law within the framework of his/her powers when settling the dispute pending before him/her.      
EU law is, thus, definitive in principle for the content of the Dutch law on publication (see also HR 19 June 2009 ‘Buma/Chellomedia’, LJN: BH7602). The court will therefore concentrate on EU legislation and case law in this respect.

3.3 Article 3, Paragraph 1 of the Copyright Directive thus states:
The Member States shall, for the benefit of authors, provide for the exclusive right to allow or forbid the communication of their works to the public, by way of wire or wireless, including the making available of their works for the public in such a way that they are accessible to members of the public at a place and time chosen individually by them.
  Recital 23 of the Copyright Directive gives the following explanation of this provision.
This directive must further harmonise the right of the author to communicate works to the public. A broad meaning must be give to this right, including any communication made to a public not present at the place of origin. This right must be applied to every such transmission or retransmission of a work to the public, by way of wire or wireless, including broadcasting. This right does not relate to any other action.
Recital 27 of the Copyright Directive stipulates:
‘The making available of physical facilities to make communication possible or carry out communication is not in itself a communication within the meaning of this directive’.
  In its judgement of 7 December 2006 in the ‘Hoteles’ case (case no. C-306/05), the CoJEC rules as follows:
‘Even though the mere making available of physical installations as such does not constitute a communication within the meaning of the Copyright Directive, the transmission of a signal via television sets by a hotel to guests staying in its rooms does, irrespective of the method used to transmit the signal, constitute a communication to the public within the meaning of Article 3, Paragraph 1 of this Directive’.
  Point 43 of said judgement finds as follows:
It furthermore follows from Article 3, Paragraph 1 of the Copyright Directive that a case of communication to the public already arises where the work is made available to the public in such a way that it is accessible for the members of that public. It is therefore (…) not of decisive importance that the guests who did not switch on their television sets did not actually have access to the works.
  The ruling given by the CoJEC on 18 March 2010 (case no. C-136/09) – made with the application of Article 104, Paragraph 3 of the court’s rules of procedure – sets out the following dictum:
‘The hotel keeper who installs television sets in the rooms of its hotel and connects such TV sets to the central antenna is carrying out a communication to the public by this fact alone within the meaning of Article 3, Paragraph 1 (Copyright Directive)’.
  In its judgement pronounced on 21 October 2010 in the ‘Padawan/SGAE’ case (C-467/08) – after the pleadings in the present case -, the CoJEC emphasises, with reference to points 43 and 44 of the ‘Hoteles’ ruling, that:
(…) from the copyright point of view, account has to be taken of the mere possibility for the end-user, in the case concerning hotel customers, of viewing broadcasts by way of television sets and a signal that is made available by the hotel and not with actual access to the works on the part of the customers (…).
  
3.4  The reproduction of this passage from EU law shows that the right under Article 3, Paragraph 1 of the Copyright Directive – which can be denoted as ‘Right of communication in the broad sense’ – comprises  (cf. point 149 of the response to the grounds of appeal, where this distinction can also be found):
a)   the right to communicate the work to the public (hereinafter referred to as: the right of communication in the narrow sense); concerning, in this regard, the transmission of a signal containing the work which reaches the public;
b)   the right to make the (signal containing the) work available to the public in such a way that it is accessible for members of the public (hereinafter referred to as the right to make available); it is not of decisive importance in this regard whether the public actually has access to the work; the mere possibility of the public being able to perceive/observe the work is sufficient.
A broad meaning therefore has to be given to the ‘right to make available’. Article 3, Paragraph 1 of the Copyright Directive, i.e. the last clause of Recital 23 of the Copyright Directive, does not, however, relate to actions that can no longer be covered under this – or the right of communication in the narrow sense. In particular, if a signal is not (yet) made available ‘in such a way’ as to be accessible for the public, the court finds that this is then a case of a situation that does not come under the right to make available.

3.5   The positions of FTD that there are no files present on the FTD platform and that no signals are passed on via the FTD infrastructure (points 37 and 43 of the appeal petition) are correct. The description of the functioning of the FTP application given above in relation to the Usenet indeed shows that no signal containing the movie ‘Komt een Vrouw bij de Dokter’ has passed through the application. For this reason alone, FTD has not infringed Eyeworks’ right of communication in the narrow sense through keeping and offering the FTD application.

3.6  With the help of the FTD application, Usenet users can find uploaded films which they could not have found without the application, at least not easily, i.e. movies posted under a strange name (see recital 2.6). However, in order to be able to download the movie or watch the same (direct, via an NZB player, or after downloading, see point 107 of the response to the grounds of appeal), the users also need software (a newsreader and/or a Usenet search service and/or an NZB file/NZB player), which FTD has nothing whatever to do with. Although it is maybe also possible for them to do this without the search service and the NZB file, they would then have to do quite a lot themselves. Considering, furthermore, that FTD has stated unchallenged (point 14 of the appeal petition) that its application does not offer the possibility to find NZB files (see also recital 2.9 iv.), it cannot be said that FTD has made the movie “Komt een Vrouw bij de Dokter” available to the public through keeping and offering its application in such a way that said work has become accessible for the members of such public. With the FTD application alone, the public does not yet have the possibility to view a movie uploaded on Usenet. It can be concluded that the positions of Eyeworks on page 25 under A as well under points 102 and 108 of the response to the grounds of the appeal that after a film has been found via the FTD application, only a few mouse clicks are still needed to download or watch the same – with the help of the software just referred to above. A comparison can be drawn between this situation and the situation under discussion in the ruling referred made by the CoJEC on 18 March 2010, as referred to above, where the hotel guest only needed to switch on the television and find the station in order to watch the broadcast. However, there is a – crucial – difference between the two situations, in that the software referred to is not supplied by FTD and the hotel owner also provides the ‘on’ button and the station search function through installing the television set. The positions (i) and (iv) of Eyeworks referred to in recital 3.1 do not, therefore, hold good, whereas the positions (ii) and (iii) stated there do not in themselves lead to the finding that FTD makes the movie “Komt een Vrouw bij de Dokter” public. The defence set out by FTD in recital 3.1 is effective. Eyeworks’ right to make the work available is therefore not infringed by FTD, either. It can remain open whether the FTD application is to be regarded as a ‘physical facility’ as referred to in recital 27 of the Copyright Directive.

3.7   The concept of ‘co-publication’ does not feature in the Copyright Directive or in the Copyright Law. This could possibly be concluded from Article 31 of the Copyright Law in conjunction with Article 47 of the Penal Code and Article 6:162 of the Civil Code, though this would then, having regard to Article 47 of the Penal Code, require close and deliberate cooperation between FTD and the other party/parties involved in co-publication. Nor has Eyeworks stated anything in this regard. Its position given in recital 3.1 (v) is thwarted on this very point.

3.8   The conclusion of the above is that the application by Eyeworks based on the right of publication is not admissible. This means it has to be examined whether the application by Eyeworks is admissible on either of the alternative bases submitted in this respect.

4. Alternative applications by Eyeworks: introduction

4.1   The alternative application made by Eyeworks on the basis of Article 26d of the Copyright Law implies that FTD should be regarded as an intermediary whose service (the FTD application) is used by third parties to infringe the copyright held by Eyeworks (points 48 and 55 of the response to the grounds of the appeal). The second alternative basis implies that FTD has acted wrongly/unlawfully vis-à-vis Eyeworks on account of its facilitating and encouraging a structurally infringing act with its application (points 58, 61 and 94 of CvA/CvE-rec and points 53, 54 and 123 of the response to the grounds of appeal). These bases can be involved in two possible alleged infringements of the copyright held by Eyeworks, i.e. the uploading (‘posting’) of the movie “Komt een Vrouw bij de Dokter” on Usenet and the downloading of the same (cf. point 112 of the response to the grounds of the appeal). The court will now rule on the alternative applications made by Eyeworks on the basis of this starting point, first examining the question of downloading.

5. Alternative applications by Eyeworks in conjunction with downloading

5.1   The movie “Komt een Vrouw bij de Dokter” was posted on Usenet without the consent of Eyeworks. This therefore concerns downloading from an illegal source. The most far-reaching defence on the part of FTD against Eyeworks’ (second) alternative in connection with downloading states that, in view of the positions collected by the cabinet in the parliamentary papers, downloading from an illegal source is covered by the home copying exception, with the result that this is not forbidden under Dutch law. Being involved in a non-forbidden action in any way cannot, continues FTD, result in unlawful action (see points 3 – 7 of the initiating petition, points 37 and 59 of the appeal petition, points 48-52 of the appeal pleading).

5.2   Eyeworks has contradicted this by saying that downloading from an illegal source is forbidden under the Copyright Law by virtue of thus being inconsistent with the three-step test from the Copyright Directive and – as it remarked in its appeal pleading – the Copyright Law has to be interpreted accordingly.
  
5.3  In order to be able to properly assess these positions of the parties, it is first necessary to establish the relevant legal framework.

5.4  On the basis of Article 1 of the Copyright Law, subject to restrictions laid down by law, the originator of a work is the only person authorised to duplicate (reproduce or copy) his/her work. This right on the part of the author is hereinafter referred to as the right of reproduction. One of the restrictions to the rights of reproduction as laid down by law is set out in Article 16c of the Copyright Law, which is also referred to as the ‘Home copying provision’ or ‘Home copying exception’. Paragraphs 1 and 2 of Article 16c of the Copyright Law are worded as follows.
1. Not deemed to constitute an infringement of the copyright to a work (…) is the reproduction of a work of part thereof on an object that is intended to play, show or render the work, provided that the reproduction takes place without any direct or indirect commercial intention and is used exclusively for one’s own exercise, study or use by a natural person making the copy.
2. Fair remuneration is to be paid on behalf of the originator or his/her assigns for the reproduction as referred to in paragraph 1 above. The obligation to pay said remuneration rests on the manufacturer or importer of the objects referred to in paragraph 1 above.
Article 16c of the Copyright Law implies that a private person who copies music or a movie on, for example, a CD-R or DVD-R (the ‘object’ under paragraph 1 above) for his/her own use does not infringe right of reproduction of the originator of the musical work concerned, but has to pay fair remuneration (Home copying charge) for the copying. The parties assume that the movie ‘Komt een Vrouw bij de Dokter’ is downloaded by private persons for their own use.

5.5   The author’s right of reproduction under European law is set down in Article 2 of the Copyright Directive. Article 5 of the Copyright Directive provides for a number of restrictions to these rights. The ‘Home copying provision’ under European law is set down in Article 5, Paragraph 2 b of the Copyright Directive, worded as follows:
The Member States can set limitations or restrictions to the right of reproduction referred to in Article 2 with regard to:
  a. (…)
  b. reproduction, on whatever carrier/medium, carried out by a natural person for private use and without any direct or indirect commercial intention, provided that the holders of the rights receive fair compensation, taking account of the possible applications of the technical provisions referred to under Article 6 to the work or material concerned.

5.6  Article 5, Paragraph 5 of the Copyright Directive sets general limits to the possibility of including the restrictions mentioned in the preceding paragraphs (Roman numerals applied by the court):
The limitations and restrictions referred to in paragraphs 1, 2, 3 and 4 may (1) only be applied in certain cases , provided that (ii) this is not detrimental to the normal operation/exploitation of works or other material, and (iii) no unreasonable harm is caused to the legal interests of the holders of the rights.
  The test required under Article 5, Paragraph 5 of the Copyright Directive is referred to as the ‘three-step test’.

5.7  The Dutch home copying provision under Article 16c of the Copyright Law Aw was in existence before the introduction of the Copyright Directive. In connection with the implementation of this Directive, Article 16 of the Copyright Law was amended under the statute passed on 6 July 2004 (Stb. 2004, 336) to adapt the 1912 Copyright Law to the application of the Copyright Directive (hereinafter referred to as: ‘the 2004 Amending Law’).

5.8  For this purpose, reference is made under 3.2 to the obligation of the civil courts to interpret a national provision in line with the directive. The words ‘as far as possible’ in point 113 of the CoJEC’s Pfeiffer’ judgement cited there shows, on the one hand, that a civil court must avail itself of all the means at its disposal to interpret national law in line with a directive but, on the other hand, that it cannot be asked to do the impossible. There are, therefore, limitations to the precept of interpretation in line with a directive. The CoJEC/EU have only expressed an opinion on these limitations in a criminal law context and arrived in such context at the conclusion that the obligation of interpretation in line with a directive reaches its boundaries in the general principles of law, in particular the principle of legal certainty (CoJEC 7 January 2004 in the ‘Rolex’ case, case no. C-60/02), and that the principle of interpretation in line with a directive cannot serve as the basis for a ‘contra legem’ interpretation of national law (CoJEC 16 June 2005 in the ‘Pupino’ case, case no. C-105/03). Judgements on the limitations of interpretation in line with a directive in a civil law context have been made by the Supreme Court, among other things in its rulings handed down on 25 October 1996 in the ‘Pink Floyd/Rigu Sound’ case (NJ 1997, 649) and on 20 October 1995 in the ‘Van Asseldonk/Ter Schure’ case (NJ 1996, 330), where it was found, in brief, that the wording of the national provision viewed in conjunction with the origin of the same can mean that interpretation in line with a directive is not possible, and less so if the principle of legal certainty is contrary to this. Reference is furthermore made to i) the ruling by the tax division of the Supreme Court handed down on 10 August 2007 (LJN: AZ3758), from which it can be concluded that it cannot be assumed that the limits of interpretation in line with a directive have been reached that quickly, and ii) to point 112 of the ‘Pfeiffer’ ruling by the CoJEC already referred to, implying that the national court must assume ‘that the member state, if it has availed itself of the discretion granted to it by virtue of this provision, had the intention to fully perform the obligations arising from the directive concerned’, which means that a national provision that can, in view of its origin, be reasonably interpreted in such a way that it is in accordance with the directive must also be interpreted accordingly. On this basis, the court reaches the conclusion that, in a civil law context, interpretation in line with a directive can only be out of the question if the gap in the content between the national provision and provision of the directive is so great that this can no longer be reasonably bridged by way of interpretation (see also M.H. Wissink, Richtlijnconforme interpretatie van burgerlijk recht (Directive-compliant interpretation of civil law), Kluwer 2001, p. 187, penultimate paragraph).

5.9  In this case, no, or at least no explicit, appeal is made against the limits of interpretation in line with the directive. Concerned here, however, is an additional ex officio legal ground that has to be raised by the judge on the basis of Article 25 of the Copyright Law. The parties do not have to be given the opportunity to add to their positions in greater detail as they could have taken account of ex officio application (see recital 3.3 of the Supreme Court judgement dated 22 January 2010, LJN: BK3066).

5.10  The position of Eyeworks referred to under 5.2 above that Article 16c of the Copyright Law should thus be interpreted to the effect that downloading from an illegal source is forbidden is evidently based on the following reasoning. Copying (downloading) from an illegal source supposes that there is someone else who has previously made the copied work public illegally – i.e. without the consent of the holder of the right – through placing (uploading) it on the Internet. This illegal publication not only undermines the exclusive authority of the holder of the rights to decide whether and under what circumstances he/she wishes to disclose his/her work to the public; he/she also remains devoid of the payment he/she could have insisted on for his/her consent to making the work public. Illegal uploading is encouraged by the downloading from an illegal source, with a system maintained with which one party downloads and the other uploads illegally, and vice versa. If downloading from an illegal source stops, this will also (eventually) put an end to illegal uploading (for the most part). Viewed in this way, downloading from an illegal source is an essential factor in bringing about the detriment caused to the holders of right through illegal uploading. Since these detrimental consequences of illegal uploading cannot be eliminated through home copying compensation, which is only due for the act of reproduction that takes place when downloading, this means that the legal interests of the holders of rights are unreasonably harmed through copying from an illegal source (the 3rd step of the three-step test). In view of the precept of interpretation in line with the directive, Article 16c ff. of the Copyright Law has to be interpreted accordingly, i.e. in the sense that downloading from an illegal source is forbidden, as in the opinion of Eyeworks.

5.11  The court assumes that Article 5, Paragraph 2b of the Copyright Directive (on the basis of which the Member States can make home copying a restriction on the right of reproduction) does not itself make any difference to the source from which the work to be copied is obtained. There can therefore only be a case of inconsistency with the Copyright Directive if the application of the restriction under Article 5, Paragraph 2b of the Copyright Directive on downloading from an illegal source has to be deemed to be contrary to the three-step test contained in Article 5, Paragraph 5 of the Copyright Directive. Recital 44 also points out in this context that ‘the Member States, where they provide for similar limitations or restrictions , duly take account, in particular, of the stronger economic impact that the limitations or restrictions could have on the new electronic environment’ and that ‘consequently (…) the area of application of certain limitations or restrictions should be even more restrictive where it concerns particular new forms of use of copyright-protected works and other material’.

5.12  Nor does Article 16c ff. of the Copyright Law stipulate anything in relation to the admissibility of reproducing from an illegal source. This question was, however, expressly raised during the parliamentary debate on the 2004 Amending Law, witnessed by the following remarks made by the Minister.
-    Internet users that avail themselves of the possibilities offered by Napster, KaZaa and comparable peer-to-peer services to copy literary, scientific or artistic works for private use are, in general, operating within the margins of the law on copyright. This also applies where a private copy is made from an original that is published illegally, i.e. without the consent of the holder of the relevant rights (…). The absence of the requirement of the original having to be legal can thus lead to it being permissible for legal private copies to be made from an illegal source (…) (memo in connection with the report, TK 2002-2003, 28482, no. 5, p 32);
-  It is my preference that a private copy should only be made from a legal source. Article 5, Paragraph 2b of the Directive and Article 16c likewise do not necessarily stand in the way of it being possible for a legal private copy to be made from an illegal source. ‘As the members of the CDA group remarked, users mostly cannot be asked to judge whether the original is legal. Furthermore, I have doubts regarding the enforceability of such a requirement. Finally, it should be pointed out that the inclusion of the requirement there may only be a legal source implies that the amount of the fair compensation should be adjusted downwards. The fair compensation is, namely, exclusively due for loss of earnings through revenue on the part of holders of rights on account of private copying in accordance with Article 16c. A distinction has to be made between this loss and loss of revenue because of illegal copying outside the scope of Article 16c. (Memo in connection with the further report, TK 2002-2003, 28482, no. 5, p.33).
-  Article 16c links private copying to the condition of compensation being paid. The compensation is due regardless of whether a legal or illegal source is concerned (…). If the private copy from an illegal source is not taken into consideration when setting the compensation, the user copying the illegal works would then, in fact, get away cheaper. The law would then be rewarding the use of illegal actions. That this cannot be the intention is also made clear by the fact that even the Directive does not impose the restriction that it must concern a legal source. (Memo in connection with the report, TK 2002-2003, 28482, no. 8, p. 13).
  These statements by the Dutch government show that it is of the opinion that copying from an illegal source is permitted under the Copyright Law on account of this being covered in Article 16c, Paragraph 1. Article 16c ff. of the Copyright Law therefore has to be interpreted to this effect. The governing has consciously stipulated this in this manner, evidently feeling that it is in accordance with the Copyright Directive.

5.13  The minister’ statements just referred to are evidently based on the following train of thought. As long as technical facilities are not yet available to a sufficient extent in the form of copy protection devices and/or Digital Right Management (DRM) systems, a ban on the making of private copies from an illegal source cannot be enforced in practice (in subsequent letters to the Lower House concerning copyright policy, the minister added that such a ban was also associated with privacy concerns, TK 2008-2009, no. 6 and TK 2009-2010, 29838, no. 22, p. 13). In de facto terms, the holders of rights would therefore not be able to receive any payment in the case of a ban on downloading from an illegal source. In view of this, the legal interests of the holders of right are presently better served by a system in which downloading from an illegal source is permitted, since this means that the holders of the rights are due in any case to receive home copying compensation for this. The interests of the holders of the rights are consequently not harmed unreasonably by allowing downloading from an illegal source and this complies with the three-step test and, thus, the requirements made by the Copyright Directive, according to the government, as the court understands it.

5.14  The court finds that, in the system advocated by the government, the fact remains that downloading from an illegal source does encourage illegal uploading and that the holders of the right in that system therefore remain confronted with the detrimental consequences of illegal uploading which are not eliminated by compensation for home copying. It cannot necessarily be said, however, that downloading from an illegal source is inconsistent with (the 3rd stage of) the three-step test under Article 5, Paragraph of the Copyright Directive for this reason alone as it is highly conceivable that the test requires a specific weighing-up of all the circumstances involved, including the circumstance that a ban on downloading from an illegal source can presently not (yet) be enforced in practice and the holders of the rights are therefore better off if downloading from an illegal source is permitted and that, based on this, the government’s approach is consistent with the (3rd stage of the) three-step test. Should this be the case, Dutch law as described/interpreted in recital 5.12 is, in conclusion, in line with the directive and downloading from an illegal source is then permitted.

5.15  However, if it should be the case that the (3rd step of the) three-step test is opposed to downloading from an illegal source on account of this resulting in illegal uploading being encouraged and the above-mentioned specific weighing-up of interests and questions of enforcement not playing a decisive role in the assessment on the basis of said test, Article 16c, as interpreted in recital 5.12 in fine, is then inconsistent with the Copyright Directive in this respect. In view of what is considered in the first sentence of Article 5.14, the gap between what is stipulated by the Copyright Directive and what is implied by Dutch law is, in the provisional opinion of the court, so great that the limit of directive-compliant interpretation has been reached. This applies all the more, given that it is confirmed once again in the cabinet response of 30 June 2009 to the report by the “Copyright Working Group” that, in the government’s view, ‘the downloading of copyright-protected material (…) is presently allowed’ (TK, 2009-2010, 28 838, no. 22, p. 14), with this, according to the context of the words, unmistakably meaning: downloading from an illegal source. In view of this, legal certainty would be compromised in an unacceptable way if Article 16c of the Copyright Law were now to be interpreted on the point of downloading from an illegal source in the manner argued by Eyeworks. If Dutch law were to be inconsistent with the Copyright Directive, Dutch law, as ascertained in recital 5.12 in fine, would therefore nonetheless maintain its validity, meaning that downloading from an illegal source is also permitted in the Netherlands in that case.

5.16  Summary. Either the three-step test is complied with and Article 16c of the Copyright Law, as interpreted in recital 5.12 in fine, is then consistent with the Copyright Directive or the three-step test is not complied with and Article 16c of the Copyright Law, as interpreted in recital 5.12 in fine, is then inconsistent with the Copyright Directive to such an extent that that interpretation in line with the directive is impossible, with the result that Article 16c of the Copyright Law prevails with the interpretation described in recital 5.12 in fine. In either case, the interpretation of Article 16c of the Copyright Law as described in recital 5.12 in fine therefore applies and downloading from an illegal source is permitted. The defence of FTD referred to in recital 5.1 is consequently effective; given that downloading even from an illegal source is permitted under Dutch law, the provision of services as an intermediary which are used for this purpose by third parties, as well as the (structural) facilitating/encouraging of the same, is not forbidden or unlawful. The alternative applications made by Eyeworks are therefore not admissible insofar as they are related to downloading.


6. Alternative application by Eyeworks with regard to uploading

6.1   Specifically in view of its alternative application where this is related to uploading, Eyeworks has submitted, among other things, that FTD offers, with its application, a platform to uploaders for making their uploads known on Usenet, that the application is set up and exclusively suitable for finding content, that the members of the FTD community use the platform ‘certainly and also precisely’ to allow the entertainment files to be found, and that FTD wilfully encourages large-scale serious infringement of the rights held by Eyeworks (points 61 and 94 of CvA/CvE-rec and points 41, 50 and 123 of the response to the grounds of the appeal). FTD enters the defence that it is not an intermediary (point 91 of the appeal petition), that its platform is not used for uploading and that is has nothing whatever to do with uploading and that uploading is not encouraged or promoted (points 32, 42 and 51 of the appeal pleading).

6.2.   Under 2.13, it is explained that the FTD application makes the downloading of the movie ‘Komt een Vrouw bij de Dokter’ – and entertainment files in general – considerably easier. This is particularly true for movies that are uploaded under a strange - non-inferable – name. This also makes it more attractive for uploaders to place movies like ‘Komt een Vrouw bij de Dokter’ on the Internet. The FTD application enables the uploader to reach his/her ‘public’ much better and helps create an environment in which the uploader can achieve greater results from his/her activity, even where he/she uses a strange file name to prevent tracing. FTD denies this with its position that it has nothing to do with uploading and does not encourage or promote unloading. It is furthermore of significance in this context that it has to be held in these summary proceedings that a substantial proportion of the spotters are also people involved in uploading (see recital 2.12) and that it can consequently be assumed that this was regularly the case, particularly for movies uploaded under a strange name, as in the case of ‘Komt een Vrouw bij de Dokter’, for example (see recital 2.6). This emphasises that the FTD application helps those uploading the movie and entertainment files in general to reach their envisaged goal, i.e. that the movie or files are found and downloaded and that the application therefore has a stimulating effect on uploading. The court also points out that – even though there is, according to FTD (point 13 of the initiating petition ID and point 47 of the appeal petition), no case of a ‘file-sharing network’ here – the members of counsel of both parties stated in the appeal pleading that there was a sort of reciprocity between the parties uploading in the sense that the uploaders themselves also carry out downloading, so that they ‘can watch movies for free’ (see also point 19, last sentence of the initiating petition and point 40 of the response to the grounds of appeal). In this light, it is all the more true that the convenience provided by the FTD application for downloading constitutes a stimulating factor for uploading. Eyeworks states furthermore (point 41 of the response to the grounds of appeal) that FTD created its platform with the aim of promoting the system of mutual exchange. The court considers this position to be plausible.

6.3  In point 50 of the response to the grounds of appeal, Eyeworks states unchallenged that between 80% and 96% of the ‘entertainment content’ found on Usenet is offered there in an unauthorised and unlawful manner (uploaded). It is evident that FTD knows this and Eyeworks has also stated that FTD is aware of this fact (points 50-52 of the response to the grounds of appeal). FTD has in any case not disputed this (see also point 75, first sentence, appeal petition).

6.4   Illegal uploading, without consent or payment, not only undermines the exclusive authority of the holder of the rights to decide whether and under what circumstances he/she wishes to disclose his/her work to the public (thus also FTD in point 20 of its appeal pleading); he/she also remains devoid of the payment he/she could have insisted on for granting his/her consent to the action of making the work public. The holder of the rights therefore experiences a (serious) disadvantage from such illegal uploading. This is also true for Eyeworks with regard to its movie ‘Komt een Vrouw bij de Dokter’. In point 10 of CvA/CvE-rec, Eyeworks stated unchallenged that more than 40 spots were placed for this movie on 10 May 2010 and that the film was mentioned in FTD’s top 25 nine times. It therefore has to be assumed that this successful cinema film was uploaded and (then) downloaded frequently and that this will cause and has caused Eyeworks to forego earnings from the sale of DVD’s and BluRay’s.

6.5   Eyeworks furthermore submitted that FTD has a substantial financial interest (profit) in the operation of FTD application (point 33 of CvA/CvE-rec and point 38 of the response to the grounds of appeal). Document 2H submitted by Eyeworks shows that advertising by third parties is displayed on the application. Under point 44 of its appeal pleading, FTD commented that it does earn ‘something’ from these advertisements. With this, they have not disputed to a sufficient extent that they are not intent on profit, with the result that it has to be assumed in these summary proceedings that this is the case. The court deems it plausible that, as expressed by Eyeworks in point 33 f CvA/CvE-rec, the possibility to acquire advertising revenue with the FTD application can in the long run be (mainly) attributed to illegal uploading. If no illegal content were posted on Usenet, there would be no, or at least much less need for spots and the FTD application would not have the present number of visitors, on which advertising possibilities depend. FTD therefore benefits once again from the illegal uploading encouraged by it.

6.6  As the FTD application appears to be permanently accessible, the action FTD is accused of has to be labelled as structural/systematic.

6.7   It boils down to FTD operating an application in a structural/systematic way, through which an activity (i.e. illegal uploading) is encouraged, and it consequently knows or should be aware that this results in infringement of the copyright held by Eyeworks as well as (serious) harm to Eyeworks, while it, FTD, itself makes a profit from the activity.

6.8  The court is initially of the opinion that this action is not inconsistent with Article 26d of the Copyright Law. The uploaders, even if they are also spotters, do not need the FTD application in order to be able to upload movies. Nor does the application make the action of uploading in itself any easier. It is therefore not the case that the uploaders make use of the FTD application to commit copyright infringement constituted by the illegal uploading, as required for the applicability of Article 26d of the Copyright Law. The mere encouragement and profiting from copyright infringement is outside the scope of that provision. In this respect, the defence arguments of FTD presented under 6.1 are effective. The alternative application by Eyeworks relating to uploading is therefore not admissible.
6.9  In view of that considered under 6.7, FTD has acted contrary to the due diligence and care that it should observe vis-à-vis Eyeworks. The alternative application by Eyeworks, insofar as it is based on the action of FTD with regard to encouraging uploading, is therefore admissible on the basis of Article 6:162 of the Civil Code. Point 58 of CvA/CvE-rec shows that, with its alternative application, Eyeworks envisaged a ban being imposed on FTD with regard to continuing to have spots related to ‘Komt een Vrouw bij de Dokter’ present via its FTD application. The order to be declared in the pronouncement will be concentrated on this and, furthermore, on the FTD application, as this is described in recitals 2.4 and 2.7 - 2.10.

7. Articles 1019e and 1019h of the Copyright Law

7.1  It follows from the above that the application by Eyeworks is only admissible on the second alternative basis: (exclusively) Article 6:162 of the Civil Code.

7.2  Directive 2004/48/EC of the European Parliament and the Council dated 29 April 2004 on the enforcement of intellectual property rights (Enforcement Directive) came into force on 29 April 2004. Articles 1019-1019i were included in Title 15 of Book 3 of the Code of Civil Procedure for the purpose of implementing this Directive. The court notes the following in this regard. Recital 13 of the Enforcement Directive shows that this does not itself relate to ‘actions that constitute unfair competition’, but that the Member States are at liberty to extend the provisions of the directive for internal purposes to cover such actions. The wording and origin of the implementation legislation do not contain any indication of the Dutch legislator having availed himself of this possibility. This means that the area of application of Title 15 of Book 3 of the Code of Civil Procedure is not broader than that of the Enforcement Directive.

7.3   It can be concluded from point 64 of the response to the grounds of appeal and the formulation of the bases of its application set out in recital 1.3 of this ruling that Eyeworks itself does not deem Article 9, Paragraph 4 in conjunction with the penultimate clause of Paragraph 1a of the Enforcement Directive/Article 1010e of the Code of Civil Procedure (the ‘ex parte’ order) as being applicable to involvement in an infringement by third parties whereby, as in this case, the party claimed against cannot be regarded as an ‘intermediary’. Nor is such involvement in an infringement referred to in Article 9, Paragraph 4 in conjunction with the penultimate clause of Paragraph 1a of the Enforcement Directive. As the (only) admissible application by Eyeworks relates to an order to desist from actions that encourage infringement of an intellectual property rights, the judge hearing the action for interim relief could not issue an ‘ex parte’ order against FTD.

7.4  Eyeworks is of the view in its second alternative application that there is scope for applying Article 14 of the Enforcement Directive/Article 1019h of the Code of Civil Procedure in relation to the order to pay the ‘entire’ costs of the proceedings. Eyeworks has submitted in this regard that the application also has a ‘basis in IP law’ and that this application is also aimed at enforcing its intellectual property, though without this detracting from the infringement of rights itself being committed by third parties.

7.5  FTD disputes that the order to pay the ‘entire’ costs of the proceedings under Article 14 of the Enforcement Directive/Article 1019h of the Code of Civil Procedure can be applied with regard to the second alternative application, whereby it stresses that it does not itself commit any copyright infringement.

7.6  According the court, the second alternative application by Eyeworks, based exclusively on Article 6:162 of the Civil Code, is to be regarded as an application concerning unfair competition as referred to in recital 13 of the Enforcement Directive or at least an application on a par with the context of Article 14 of said directive, with the result that – as considered under 7.2 – this application falls outside the area of application of the directive and Title 15 of Book 3 of the Code of Civil Procedure. It should also be pointed out in this regard that Article 11 of the Enforcement Directive – just like Article 9, Paragraph 4 in conjunction with the penultimate clause of Paragraph 1a (see recital 7.3) – provides exclusively for judicial orders to desist from relevant actions to be issued against the (alleged) infringing party and the intermediary. The provision concerning the order to pay the ‘entire’ costs of the proceedings can consequently not be deemed applicable to the order to be issued in these summary proceedings with regard to desisting from an action that encourages an infringement.

8. Conclusion

8.1  The disputed judgement cannot be upheld and should be set aside. The court shall, in a new adjudication, lift the ‘ex parte’ ban pronounced by the judge hearing the action for interim relief. In addition, after rejection of the primary and alternative applications, the counterclaim presented in the second alternative application by Eyeworks shall be granted.

8.2  As the mainly unsuccessful party, FTD shall be ordered to pay the costs of the proceedings in both instances. In view of that considered under 7.6 above, the costs incurred by Eyeworks shall be estimated on the basis of the tariff scale.

Decision

The court:

-  sets aside the judgement pronounced between the parties by the judge hearing the action for interim relief at the Court of ’s-Gravenhage on 2 June 2010, re-adjudicating as follows:

moreover in the main action

-  lifts the ‘ex parte’ order issued against FTD by the judge hearing the action for interim relief at the Court of ’s-Gravenhage on 11 May 2010 at the request of Eyeworks;

moreover in the counterclaim

-  orders FTD with immediate effect to desist from and continue to desist from having spots present for Eyeworks’ movie entitled ‘Komt een Vrouw bij de Dokter’ via its FTD application (as described in recitals 2.4 and 2.7 - 2.10), and orders FTD to pay a penalty of € 10,000.00 for each day or part thereof that its fails to comply with his order in part or in full;

moreover in the main claim and the counterclaim

-  orders FTD to pay the costs of the proceedings in both instances, estimated up to now on the part of Eyeworks at an amount of € 4,075.00, with € 263.00 for disbursements and € 816.00 for fees in the first instance, as well as € 314.00 for disbursements and € 2,682.00 for fees in the appeal;

-  rejects any additional or other claims by Eyeworks or FTD;

-  declares this judgement to be provisionally enforceable.

This judgement has been pronounced by A.D. Kiers-Becking, C.J. Verduyn and M.Y. Bonneur and declared at the open court hearing on 15 November 2010 in the presence of the clerk of the court.

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