Dutch State not liable for incorrect interpretation of private copying exception, says Hague Court of Appeal

The Court of Appeal (CoA) in the Hague recently handed down an interesting decision concerning liability of the Dutch government for statements by officials on the legality of downloading copyright content from illegal sources. The decision can be found here, and overturns a 2018 decision by the District Court [both in Dutch].

Case background

Article 5(2)(b) of Directive 2001/29 (the InfoSoc Directive) provides an optional limitation for "reproductions on any medium made by a natural person for private use and for ends that are neither directly nor indirectly commercial".

As some readers may know, the prevailing view in the Netherlands had long been that the private copying exception applied even to copies made of pirated content. That is, when implementing the InfoSoc Directive in 2004, the Dutch legislator assumed that individuals who downloaded illegal content could not be held liable for copyright infringement: only the distribution of copyright work without the author's consent was considered an act of infringement.

This view was decisively rejected by the Court of Justice of the European Union (CJEU)'s decision in C-435/12 ACI Adam. There, the CJEU held that "national legislation which makes no distinction between private copies made from lawful sources and those made from counterfeited or pirated sources cannot be tolerated." [at 37]. As a result, the Dutch government's position on the private copying exception had to be abandoned.

SEKAM is a Dutch collective management organization that represents the interests of filmmakers. Together with four smaller film studios, it filed suit against the Dutch state, alleging that the government's incorrect interpretation of Article 5(2)(b) InfoSoc Directive had induced infringement of their authors' copyrights and had thus been unlawful.

The Court of Appeal took a closer look and reversed

The official statements by the Dutch government

At first instance, SEKAM had argued that liability of the Dutch state was to be assumed on two grounds: (i) the formal position by the legislature, expressed in the travaux preparatoires of the changes to the Copyright Act implementing the InfoSoc Directive, that Article 5(2)(b) thereof also applied to reproductions of infringing material; and (ii) consequent statements by state officials expressing this view.

The District Court held that qualified immunity would bar any liability of the government on the first ground. It held that statements by the legislator in travaux preparatoires, as well as statements in the context of parliamentary debates, were done in an official capacity. Article 71 of the Dutch Constitution provides immunity to government officials for acts performed in that capacity. This finding was not challenged on appeal.

The case thus focused on a press release from 2010, signed by then-State Secretary Fred Teeven, as well as a statements made by him in an interview of the same day. The press release and interview concern the government's intention to change the Copyright Act to make reproduction of infringing copies by individuals unlawful. In particular, the press release contained the following statement:

In order to incentivize new legal services in the creative sector, rights holders will obtain more possibilities to take civil action against parties that harm the market with illegal content. That is why the downloading of copyright material from evidently illegal sources will henceforth give rise to civil, though not criminal, liability.

The District Court had considered it likely that a statement like this would have induced at least some individuals to download unlawful content. It held the government liable for damage resulting thereof, finding that the purpose of such statements is to provide information to the general public. If that information turns out to be incorrect and damages are incurred as a result of the public's reliance thereof, the state can be held liable for these damages.

The decision of the Court of Appeal

The CoA saw things differently and reversed the District Court's decision.

It started its analysis with the observation that since 2004 – when the InfoSoc Directive was implemented into Dutch law – the government's position on the scope of the private copying exception had consistently been that it also covers private copies from illegal sources. It characterized this position as "having turned out to be incorrect, but defendable at the time" [at 3.9].

The CoA held that it would be difficult to see how statements made in 2010 could induce individuals to infringe authors' rights, when they did no more than recapitulate (in a rather implicit manner) the government's formal position for the past years. It was sceptical that the statements at hand could at all be sufficient to induce anyone to infringe, particularly so where they added nothing novel to existing policy. Certainly the statements did not propagate infringement, according to the CoA; if anything, they must be read as disapproving it, because they announce a proposed legislative change that would make lawful use of copyright works the norm.

It appears from the decision that SEKAM did not argue this point on appeal, having agreed with the State that it would not claim legal costs in case the decision was overturned. This is somewhat unfortunate as it seems that more could be said on the issue: isn't it plausible that at least some users would be triggered by the press release to download pirated content, if only because it announced that doing so would soon become illegal?