New CJEU reference on linking and copyright: is streaming unlawful content an infringement?

Once again [see here for the latest installment], one might have thought that the story with hyperlinks and copyright was over. 

Of course it's not.

This time at issue there are questions such as: Is selling a product that contains hyperlinks to infringing content a copyright infringement? Are those who stream unlawful content infringers?

These, in a nutshell, are the very interesting questions [see here for an English translation] that the Midden-Nederland District Court (The Netherlands) has just referred to the Court of Justice of the European Union (CJEU).

Katfriend Dirk Visser, who represents one of the parties to the background proceedings 

(Dutch anti-piracy organisation BREIN), explains that this case concerns a media player (filmspeler) that an individual, Wullems, offered for sale via the website www.filmspeler.nl. 

The sale of this product was advertised as follows:

“- Never pay for films, series, sport again, watch them directly without commercial breaks or waiting times (no subscription fees, plug&play). This means that Netflix is a thing of the past!
- Watching films, series, sport free of charge? Yes please!
- Never go to the movies again thanks to our optimised XBMC software. Free HD films and series, including films fresh from the cinema, thanks to XBMC.
- Are you looking for a Media player so you can watch your favourite films and series FREE OF CHARGE on any TV in HD Full HD or 3D? Then one of our Android Filmspelers (X5 X7 or X9) is right for you!
- You just connect the Filmspeler to your TV/monitor. Plug and play, easy peasy.
- Everything is plug&play and easy to use. All settings have been optimised. A selection of the installed software: ..."

Apparently Wullems installed open source software XBMC on his product and add-ons. The latter contain hyperlinks to contain hyperlinks, which, when clicked on, re-direct users to streaming websites managed by third parties and allowing one to watch films, TV series and live sports events made available without the relevant rightholders' consent.

BREIN started proceedings against Wullems for copyright infringement, also seeking a declaration that streaming by internet users of copyright works made available without the consent of the relevant rightholders does not qualify as ‘a lawful use’ within the meaning of Section 13a(b) of the Dutch Copyright Act, Section 1(f) of the Dutch Related Rights Act and Article 5(1)(b) of the InfoSoc Directive. 

The Midden-Nederland District Court decided to stay the proceedings and refer two sets of questions to the CJEU:

Shocking: BestWater was not the end

1) Is providing links to unlawful content an act of communication?

"Must Article 3(1) of the InfoSoc Directive be interpreted to mean that “an act of communication to the public” within the meaning of that provision occurs if someone sells a product (ie a media player) on which he has installed add-ons that contain hyperlinks to websites on which direct access is provided to copyright-protected works such as films, series and live broadcasts without the rightholders’ consent? [

Is this different if

- the copyright-protected works have not been previously disclosed to the public online at all or solely via a subscription with the rightholders’ consent?
- the add-ons that contain hyperlinks to websites on which online access is provided to copyright-protected works without the rightholders’ consent are freely available and can also be installed on the media player by the users themselves?
- the websites on which access is provided to copyright-protected works without the rightholders’ consent can also be located and accessed by the public without the media player?"

The Dutch court observed that no unequivocal guidance could be inferred from preceding CJEU case law. In particular, the court observed [contrary to a recent Greek ruling] that, although the BestWater case related to a work that was disclosed to the public without the rightholder’s consent, that decision does not state that no work is communicated to the public (either) if the link leads to the public to a website on which the work has been published without the rightholder’s consent 

Incidentally, in this humble Kat's humble opinion, what the Dutch court said is correct, because in BestWater the CJEU appeared to imply the need for permission of the initial communication: "If and to the extent that [a] work is freely accessible on the website to which the internet link points, the assumption must be that the holders of the copyright have, when they permitted this communication, considered all internet users as the public."

The look of terror:
what if the film George is streaming
was from an unlicensed source?

2) Is streaming unlawful content OK?

"Must Article 5 of the Copyright Directive (Directive 2001/29/EC) be interpreted to mean that there is no “lawful use” within the meaning of the first paragraph at b of that provision, if a temporary reproduction is made by an end user during the streaming of a copyright-protected work from a website of a third party on which this copyright-protected work is offered without the consent of the rightholder(s)?

If the answer to this question is in the negative, is making a temporary reproduction by an end user during the streaming of a copyright-protected work from a website of a third party on which this copyright-protected work is offered without the consent of the rightholder(s) in breach of a the “three-step test” referred to in Article 5(5) of the Copyright Directive (Directive 2001/29/EC)?"

IPKat readers may recall that, among other things, in its decision in FAPL the CJEU held (para 168) that "As is apparent from recital 33 in the preamble to the [InfoSoc] Directive, a use should be considered lawful where it is authorised by the right holder or where it is not restricted by the applicable legislation."

In addition, in ACI Adam [another reference from The Netherlands, commented here and here] the CJEU concluded that the private copying exception within Article 5(2) of the InfoSoc Directive does not encompass reproductions from unlicensed sources.

The Court observed that Article 5(2)(b) does not address expressly the lawful or unlawful nature of the source from which a reproduction may be made. However, when adopting the InfoSoc Directive, one of the objectives of EU legislature was to provide a high level of copyright protection. As a consequence, exceptions and limitations to exclusive rights must be interpreted strictly, and Member States must comply with the three-step test as per Article 5(5) of this directive. In compliance with these principles – notably that of strict interpretation of exceptions and limitations – the private copying exception must be understood as excluding reproductions from unlicensed sources.

This conclusion was also considered in line with what is required by the 3-step test in Article 5(5). To accept that reproductions for private uses may be made from an unlawful source would encourage the circulation of unlicensed works, thus inevitably reducing the volume of sales or of other lawful transactions relating to the protected works. This would conflict with the principle that exceptions and limitations must not conflict with a normal exploitation of the work and must not unreasonably prejudice the legitimate interests of rightholders.