CJEU rules that linking can be restricted by contract, though only by using effective technological measures

Can a rightholder restrict linking by contract, eg by imposing the adoption of technological measures? 

This, in a nutshell, is the core issue at the heart of the referral to the Grand Chamber of the Court of Justice of the European Union (CJEU) in VG Bild-Kunst, C-392/19, which was decided this morning. The Court answered in the affirmative.

The referred question was:

Does the embedding of a work – which is available on a freely accessible website with the consent of the rightholder – in the website of a third party by way of framing constitute communication to the public of that work within the meaning of Article 3(1) of [the InfoSoc] Directive 2001/29/EC where it occurs through circumvention of protection measures against framing taken or instigated by the rightholder?

The ruling is important because it addresses an issue that was left outstanding after a string of CJEU decisions, starting as early as the 2014 ruling in Svensson and then continuing with BestWater, GS Media, Filmspeler and Ziggo. 

Until VG Bild-Kunst, the attention – and, thus, the analysis – of the Court had been focused on (1) the status of the subject matter linked to (authorized/unauthorized publication on the third-party website) and on (2) whether the link at issue would circumvent technical restrictions on access.

The question whether also contractual, and not also merely technical, restrictions on access could be imposed was not explicitly addressed, though – in my view – it has implicitly featured in the understanding of the Court as early as Svensson.

The Court has consistently stated that there is an act of communication to the public under Article 3 of the InfoSoc Directive when a link communicates protected subject matter to a new public, by that meaning a public not taken into account when the rightholder authorized the initial publication of their work/protected subject matter. It seems logical to think that the public that the rightholder has in mind can be defined and identified either by adopting technical restrictions (e.g., a paywall) or by envisaging contractual restrictions on linking, or both.

This morning the CJEU finally provided explicit guidance.

Background

The background proceedings relate to a dispute arisen in Germany between collecting society VG Bild-Kunst and SPK, the latter being the operator of digital library devoted to culture and knowledge DDB.

The DDB website displays links to digitized content stored on the internet portals of participating institutions. In itself, DDB only stores – with the authorization of relevant rightholders – thumbnails of the original images, which can be however enlarged by the user upon clicking on them. That website also contains links redirecting users to the website of the institution in possession of the original object.

The licensing agreement between VG Bild-Kunst and SPK included a clause, which required the latter to apply effective technological measures against the framing by third parties of the thumbnails displayed on the DDB website.

According to SPK, such clause would be unreasonable. Hence, it decided to seek a judicial declaration that the collecting society would be required to grant the licence in question without such a clause.

Further to mixed outcomes at the level of lower courts, the dispute reached Germany’s Federal Court of Justice, which decided to refer the question above to the CJEU.

The AG Opinion

In his Opinion last Autumn, Advocate General (AG) Szpunar proposed to answer the referred question by distinguishing between ‘automatic’ and ‘clickable’ links:

• If the embedding of protected content, which is lawfully and freely available on the internet, is such that such content is automatically displayed on the link provider’s page as soon as it is opened (through inline linking or hotlinking technique), without the need for any further action, then there is a communication to a new public;
• If, instead, the embedding is such that the viewer needs to click on the link to view the framed content, then there is no communication to a new public.

To reach this conclusion, what was key was a re-assessment and -calibration of what ‘public’ and ‘new public’ mean. Notably, the public taken into account by the rightholder when they authorize the publication of their work online is not and should not be the generality of internet users, but rather “the public, including the potential public, of the website on which the work was initially made available.” (at [84]).

As it frequently happens with AG Szpunar, his Opinion is a very thoughtful one, which meaningfully elaborates on existing case law. It also serves to break a(n ideological) taboo in EU copyright law, that is that all links should be treated the same.

In his view, the answer to the referred question could only in part be inferred from existing case law on linking. It would be thus necessary to look at other case law, notably Renckhoff [Katpost here].

In any case, the AG stated – based on existing CJEU case law on linking – that questions may arise in relation to 3 issues:

1. The classification of links as ‘acts of communication’ [this being something which, eg, AG Wathelet firmly objected to in his Opinion in GS Media, on which see Katpost here];
2. The consideration of subjective criteria (knowledge, but also profit-making intention); and
3. The application to the internet of the ‘new public’ criterion [on the use of the ‘new public’, see also this].

Would this contractual restriction
satisfy the CJEU judges?

In relation to 1., the AG stated that it may not be “self-evident” that a link qualifies as an act of communication, though he rejected the view that an act of communication requires (re-)transmission of a work. He concluded that it is the “technological capability of giving direct access to a work specified by its URL address (or the address of the webpage containing that work) which justifies … the classification of hyperlinks as ‘acts of communication’ within the meaning of Article 3(1) of Directive 2001/29.” (at [51])

Turning to 2., the AG acknowledged that the treatment of linking to unlicensed content in CJEU case law might be “unorthodox from the point of view of general copyright rules” (at [54]), but is necessary to preserve the balance between copyright protection and third-party rights and interests.

Finally, as regards 3., the AG noted that – when it comes to the internet – the ‘new public’ is based on a “legal fiction”, ie that (at [56])

a work, as soon as it is made freely available to the public on the World Wide Web, can be viewed by any internet users and that all those users must therefore be regarded as having been taken into account by the copyright holder as a public when the work was initially made available. I call this a legal fiction because that assertion, while true in theory, overlooks the fact that the cyberspace formed by the World Wide Web is quite simply too vast for anyone to be able to know about, let alone access, all its resources.

Not only is this assumption “based on an artificially constructed and fictitious premiss but, taken to its logical conclusion, results in exhaustion of the right of communication to the public” (at [57]). Nonetheless, its role in linking case law has been that of leading, like 2., to “a reduction of liability” (at [61]-[63]).

Today’s judgment

Yoko is also getting ready
to study the ruling
(photo by Magda Voltolini)

In its 56-paragraph judgment, the Grand Chamber recalled its own case law on Article 3(1) of the InfoSoc Directive, notably by referring to the preventive character thereof and the need to establish a high level of protection for authors, as well as the prohibition of exhaustion as per Article 3(3) of that directive. The Court also noted the need for an individualized assessment of whether the doing a certain act qualifies as communication to the public, by taking into account non-autonomous, interdependent criteria.

The Court did not adopt the differential treatment of links, as proposed by AG Szpunar, nor did it offer any re-calibration of the 'new public' criterion. To reach its conclusion, the CJEU focused not on what a link does, but rather on what the rightholder did:

• if the rightholder did authorize the publication of their work explicitly and without reservations or without otherwise resorting to technological measures limiting access/use of their work, then a link to such work would not fall under Article 3 of the InfoSoc Directive;
• if, instead, the rightholder imposed or set up technological measures restricting access to/use of their work, a link that circumvents such measures would fall within the scope of application of Article 3.

The latter would be the situation in the background proceedings: the rightholder consented to the communication of their works, subject to implementing certain technological measures. A link, in a situation like this, would be a separate, self-standing communication to the public, subject to separate authorization.

In any case (at [46]):

in order to ensure legal certainty and the smooth functioning of the internet, the copyright holder cannot be allowed to limit his or her consent by means other than effective technological measures, within the meaning of Article 6(1) and (3) of Directive 2001/29 (see, in that regard, judgment of 23 January 2014, Nintendo and Others, C‑355/12, EU:C:2014:25, paragraphs 24, 25 and 27). In the absence of such measures, it might prove difficult, particularly for individual users, to ascertain whether that right holder intended to oppose the framing of his or her works. To do so might prove even more difficult when that work is subject to sub-licences

Comment

Today’s ruling is an important one that substantially adds to the construction of the (not-always-idyllic) relationship between linking and the right of communication to the public.

The CJEU endorsed the AG’s recommendation to revisit existing case law and focus on the prohibition of exhaustion under Article 3(3) of the directive. However, it did not adopt his proposed differential treatment between different types of links, nor did it offer to revisit the 'new public' criterion. After today, it appears - first of all - that different links might have to be (still) treated alike. Whilst this may serve to avoid the risk of technological obsolescence of CJEU case law, it may also lead to outcomes that are not necessarily balanced. Secondly, the 'new public' will likely continue raising interpretative doubts and very concrete questions of application.

The key aspect of the ruling is the conditions at which contractual restrictions to linking can be imposed. The CJEU was explicit in saying that consent can be only limited by adopting technological measures. This is functional to ensuring legal certainty and the proper functioning of the internet. One may however wonder whether a potential conflict could subsist with the no formalities rule of the Berne Convention. 

This part of the judgment is important also from a broader perspective: for instance: Article 4 of the DSM Directive allows rightholders to reserve the doing of text and data mining activities in relation to their content. The VG Bild-Kunst judgment may serve to clarify further, beyond the language of that directive, how such reservation is to be done.