The IP world has long been familiar with the phenomenon of arguably abusive patent litigation by non-practicing entities (NPEs), known as “patent trolls”. This activity has now extended to the copyright realm, frustrating both copyright holders and users alike. Similarly to patent trolling, a monetary settlement reached outside the court is the main stimulus for such copyright enforcement.
|Beware of trolls|
As such, many such settlements are subject to confidentiality undertakings and hence the scope of such activity is difficult to quantify. That said, there are distinctive features of copyright trolling. Consider the ongoing activity driven by a Linux kernel contributor in Germany.
German procedural law
Why there? German preliminary injunction procedure is particularly designed to prevent infringing activity as soon as possible and its mechanism is set up to achieve this goal. The injunction proceedings are low cost and fast. According to by Hogan Lovells, to file a preliminary injunction action, the claimant must provide prima facie evidence, which is entirely based on an affidavit, supporting (i) its entitlement to the claim; and (ii) urgency of the claim. In most cases, the court decides on an ex parte basis.
As a result, an injunction in Germany may be granted even within hours and it becomes immediately enforceable without suspension during the appeal proceedings. To say the least, such injunctive procedure can indeed be very favourable to a rightsholder bringing an infringement claim.
McHardy’s business model and Geniatech case
Patrick McHardy, a German, is a former contributor to the Linux , which is licensed under a (GPL). In seeking to enforce his copyright, if any, McHardy employs the same enforcement method as does the free software community, e.g. , , , but his goal is personal monetary gain rather than licence compliance and software freedom.
McHardy’s strategy is to approach commercial entities for minor GPL violations, such as attribution deficiencies, lack or inadequacy of a written offer, or a EULA conflicting with the GPL, for the sole purpose of obtaining an undertaking to cease and desist (any) infringing activity, including a clause imposing a contractual penalty per violation for any future infringement.
McHardy’s demands are modest at the outset, which makes them an attractive alternative to a lawsuit. However, once McHardy has secured a contractual remedy available to him, he moves on to allege another violation by the same entity, claim the penalty and sign a new agreement with an increased penalty. He comes back to the same companies multiple times, addressing one violation at a time. Since a cease and desist declaration may likely contain a non-disclosure requirement, this makes it difficult for defendants to join forces.
One of the most known is the McHardy v Geniatech case. The dispute focused on GPL infringements relating to consumer electronics devices - satellite TV receivers - which included a Netfilter component. McHardy alleged that Geniatech’s product infringed the GPL (and his copyright), because no source code (or a written offer thereof) had been provided within the distributable. Despite defendant’s arguments that McHardy had no legal standing as required by German copyright law, the Regional Court of Cologne granted to McHardy, in September 2017, an injunction covering the entire Linux kernel. In March 2018, the Higher Regional Court of Cologne reversed this decision (unpublished decision, but a summary is available ).
The court reasoned that McHardy’s contributions to the Netfilter project did not amount to joint authorship and the plaintiff did not sufficiently show what exactly his contributions were and how they constitute a work protected by copyright. The court noted that McHardy acted in a systematic manner to satisfy his monetary goals; his primary motivation was not to achieve licence compliance. McHardy was assessed with bearing all the legal costs for both sides.
The Geniatech case affected McHardy’s strategy, who continues to be active but tries to stay out of court. It is that over a five-year period, McHardy has approached over 80 companies and received several million euros in payment of "damages". His primary focus is on consumer products, which are more accessible for McHardy than, say, B2B offerings, for him to carry out his technical analysis in search of infringements.
It is easy for one to violate the terms of the GPL, especially when companies embed third party software into their products without having full knowledge of what components and licences are at play. Still, it is important to recognise “profiteers” ( your guide) and not to cooperate with them. A signed cease and desist declaration subjects companies to non-GPL obligations and penalties and contractual claims are often much easier to enforce, typically being more straight forward than the complexity of copyright and GPL compliance issues.
Copyright Trolling: Abusive Litigation Based on a GPL Compliance Reviewed by Ieva Giedrimaite on Sunday, February 24, 2019 Rating: