Austrian Supreme Court refers further questions for a preliminary ruling on the InfoSoc Directive

Former GuestKat Peter Ling was recently made aware of two referrals for a preliminary ruling made by the Supreme Court of Austria on the interpretation of Art. 3(1) and Art. 5(2)(b) of the InfoSoc Directive, in particular regarding "communication to the public". The referrals stem from two cases, unrelated to one another except for the underlying legal issues that are the subject of the referrals. Here is his report.

The first case (4 Ob 40/21t – in German) relates to the operation of an online video recording device. The defendant was offering an internet protocol television (“IPTV”) service to business clients (e.g., network operators, hotels and stadiums). The IPTV service included two relevant features: (1) an online videorecorder allowing the clients’ customers to record individual programs; and (2) a replay function allowing the customers to watch television programs for up to seven days on demand, if they chose to activate this function for an individual television channel. The IPTV service included TV programs created and broadcasted by the Claimant.

In the first case, the Austrian Supreme Court has referred the following questions to the CJEU (freely translated and shortened from the German original):

1. Is a national provision compatible with Article 5(2)(b) of the InfoSoc Directive, if it allows the operation of an online video recorder provided by a commercial provider which--

a) does not create an independent copy of the programmed broadcast content for each recording initiated by a user, but merely makes a reference to an already existing copy, if one has already been made by another user;

b) has a replay function, in the context of which the entire television program of all selected stations is recorded around the clock and made available for viewing over a period of seven days, provided the user has activated this function;

c) is made available to the user including possible access to broadcast content without the consent of the rights holders?

2. Is "communication to the public" in Art. 3(1) [of the InfoSoc Directive] carried out by a commercial provider of an IPTV solution that also provides the user with access to content that has not been authorized for online use by the right holder, and the provider--

a) can influence which TV programs can be received by the end user via the service,

b) knows that its service also allows the reception of protected content without the consent of the rights holder,

c) however, does not advertise this possibility of unauthorized use of the service, but rather advises its customers upon conclusion of the contract that they must take care of the granting of rights as a matter of their own responsibility, and

d) does not, through its activities, create special access to broadcast content that otherwise could not be received or could be received only with difficulty?

The first question seeks to distinguish this case from C-265/16 VCAST/RTI (Katpost here) and the second question from C-527/15 Stichting Brein (Filmspeler) (Katpost here). After legal analysis, the referring court indicated that it is inclined to find in favor of the copyright holder on both questions (ie, that the operation of the online video recorder constitutes a communication to the public and thus copyright infringement under the InfoSoc Directive). However, the court was of the view that the case law lacks sufficient clarity to enable it to answer the questions without referral to the CJEU.

The second case (4 Ob 44/21f – in German) relates to an online streaming platform aimed at émigrés from the territory of former Yugoslavia. The defendant operated the platform based on license agreements with TV channel operators. Under these agreements, the defendant was obliged to block the streaming signal for certain shows in certain territories. The claimant is the owner of the copyright in several TV shows broadcast on the relevant TV channels. It claims that circumventing the defendant’s geo-blocking measures is relatively easy, the defendant is aware of customers using its service outside the licensed territory, and it fails to prevent such illicit use.

In the second case, the referred questions (freely translated and shortened from the German original) are the following:

1. Is the term "communication to the public" in Art 3 (1) of the InfoSoc Directive to be interpreted as encompassing the operator of a streaming platform, who a. has sole control over the content and the blocking of TV broadcasts,

b. has the sole administrator rights for the streaming platform,

c. can influence which TV programs can be received by the end user via the service, but without being able to influence the content of the programs,

d. and controls which programs and contents can be seen in which territories,

if in each case

e. the user is given access also to broadcast content for which the right holder has not authorized online use, and

f. the direct operator of the streaming platform knows that its service also enables the reception of content without the consent of the rights holders over VPN services installed by the end-users, however

g. the reception of content that was not authorized by the right holders was actually possible for several weeks even without VPN?

2. If the answer to Question 1 is affirmative, the referring court also asks the CJEU to rule on whether third parties who advertise the service, conclude testsubscriptions with end-customers, operate a customer service and receive payments from end customers, are also liable for communication to the public, given that such third parties do not inform the customers about the non-availability of certain programs in their respective territories proactively, but only if they specifically ask for these programs.

3. Are Art. 2(a) and (e) and Art. 3(1) of the InfoSoc Directive, in connection with Art. 7(2) of the Brussels Regulation (recast), to be interpreted as meaning that, in the case of an assertion of an infringement of copyright and related rights guaranteed by the Member State of the court seised with jurisdiction, that court - because the principle of territoriality, precludes the jurisdiction of domestic courts in respect of foreign acts of infringement - has jurisdiction only to rule on the damage caused in the territory of the Member State to which it belongs, or may or must that court also rule on acts of infringement committed, according to the allegations of the infringed author, outside that territory (worldwide)?

As the referring court explains, questions 1 and 2 essentially seek to clarify the subjective aspect of an act of communication to the public set out in CJEU case law and described by the CJEU as-- "interven[ing], in full knowledge of the consequences of his action, to give access to a protected work to his customers" (see C-527/15 Stichting Brein (Filmspeler), para. 30-31 and C-610/15 Stichting Brein II (Ziggo – The Pirate Bay), para. 25).

The referring court explains that, in addition to the "full knowledge of the consequences of his action", CJEU case law also requires an intentional or purposeful activity related to providing access to copyright protected content. This does not appear to be the case here, as the streaming platform of the defendant is not (explicitly or implicitly) built to allow access to unlicensed content, even though such illicit use is possible.

However, the referring court hints that this understanding may be contrary to the opinion of Advocate General Øe in C-682/18 and C-683/18 YouTube and Cyando (the decision of the CJEU has been handed down in the meantime and is available here; Katpost here).

Whether the questions in this second case have become moot now that YouTube and Cyando has been handed down remains to be seen. The author of these lines does not think this to be the case and he very much looks forward to the AG opinion and the CJEU decision.