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Streaming pirated content – what does copyright law say?

The ECJ’s ruling in „Filmspeler“

ECJ C-527/15 – Stichting Brein (“Filmspeler”)

The ECJ applies its position on hyperlinking to the sale of devices that are pre-configured for illegal streaming and confirms that this can constitute a copyright infringement. The decision has also implications for users: Streaming pirated content will be considered illegal in most cases.

Background

A Dutch entrepreneur, Jack Frederik Wullems, sold multimedia devices under the name "Filmspeler", including preinstalled software and hyperlinks to websites enabling users to retrieve unauthorised copyrighted content (such as films and tv shows) easily and free of charge, and to view that content on television screens. The streaming devices were also advertised especially for this purpose.

A Dutch foundation representing rightholders, Stichting Brein, asked Wullems to refrain from distributing the relevant equipment and brought an action before the requesting court (District Cout of Midden-Nederland). The Dutch court asked the European Court of Justice (ECJ) for a preliminary ruling on whether the sale of such devices, which were specifically configured and advertised for the playback of copyrighted content without the consent of the rightholders, constituted a copyright infringement, specifically a "communication to the public" within the meaning of the European InfoSoc Directive (2001/29/EC). In addition, the ECJ had to clarify whether the playback of the illegal content as such – due to the copies made temporarily in the multimedia player's access memory – constitutes an unlawful act of reproduction or whether such temporary reproduction is covered by the exemption for temporary and transient or incidental copies.

The ECJ's judgment

Selling preconfigured streaming devices providing access to illegal content may be prohibited by copyright law

In its decision C-527/15, handed down on 26 April 2017, the ECJ makes it clear that the sale of streaming devices, which are preconfigured so that users can easily (with one click) access copyright-protected content and receive unauthorised access to such content, constitutes a copyright infringement:

The decisive factor for the ECJ was that the additional preinstalled software enabled users to have direct access to the protected works made available without the permission of the rightholders. In the view of the ECJ, the sale of such preconfigured streaming players goes beyond the "the mere provision of physical facilities for enabling or making a communication" (for which there is a carve-out in the InfoSoc Directive's recitals),  and thus constitutes an "act of communication" in the sense of Article 3 para 1 of the InfoSoc Directive.

Against the background that the devices were preconfigured in full knowledge of the fact that the linked content was not authorised by the rightholders, the ECJ confirmed, in line with its previous case law on hyperlinking (see C-466/12, Svensson; C-348/13 Best Water International; C-117/15 Reha Training), that the communication is for a "new audience". The ECJ also pointed out that the streaming devices were even advertised especially for accessing illegal content free of charge and thus undoubtedly with the intention of making a profit. If this is the case, it is presumed that the link provider knows (or ought to have known) that providing the linked content is illegal (see ECJ C-160/15, GS Media). Based on these facts, the ECJ declared that the sale of such multimedia players constitutes a 'communication to the public' which rightholders can prohibit.

Based on the ECJ's findings, rightholders can now prohibit the promotion and sale of such streaming devices within the EU, and may request that these devices be withdrawn the from circulation. Providers of these devices must also expect the assertion of damages claims. This concerns not only companies based in the EU, but all companies that offer or sell such devices in the EU.

Broader meaning of the decision with regard to streaming

Secondly, the ECJ declared that the temporary copies generated when streaming illegal content in the (cache) memory of devices do not fall under the mandatory exemption pursuant to Art 5 para 1 InfoSoc Directive, for temporary acts of reproduction. Obtaining unauthorised copyright-protected works by streaming does not satisfy the conditions required to qualify for this exemption, which is intended to provide a carve-out for only transient copies. In particular, as the ECJ pointed out, this exemption does not apply when the sole purpose of the temporary reproduction is not a lawful one. The ECJ stated that Article 5 Para 1 InfoSoc Directive does not apply to cases in which users access copyrighted content without the rightholders' consent by way of streaming devices such as the ones sold by Mr Wullems,  as in such case users are deemed to act voluntarily and with knowledge of the illegality of the streamed content.

The ECJ also declared that the temporary reproduction of illegal content does not satisfy the conditions of the interpretive guidelines set out in the so-called "3 step test" (Art 5 para 5 InfoSoc Directive), under which copyright exemptions may be applied only in certain special cases which do not conflict with a normal exploitation of the work or other subject-matter and do not unreasonably prejudice the legitimate interests of the rightholder. According to the ECJ, the temporary reproduction of illegal content in the course of streaming may affect the normal exploitation of the works in question and potentially prejudice the rightholders legitimate interests, especially by causing a loss of sales.

This has far-reaching implications for users: The consumption of illegal streaming content will now be considered unlawful, provided that the protected unauthorised content is being accessed by the user "voluntarily and in full knowledge of the situation.", We believe that this will likely be the case whenever preconfigured hardware such as the "Filmspeler" is used or content is accessed from well-known or easily recognisable illegal streaming portals.

Users won't be able to benefit from the private copying exemption either: In ACI Adam (C-435/12), the ECJ had already confirmed that the private copying exemption (Article 5 para 2 InfoSoc Directive) does not apply when the copied works are clearly made available  without the rightholders' consent.

Thus, it should be clear now that streaming from illegal sources will, in most cases, constitute a copyright infringement.