Multimedia player sellers and individual streamers beware! Filmspeler broadens scope for copyright infringement in the EU

The Filmspeler judgment specifically addresses the sale of multimedia players with pre-installed add-ons containing hyperlinks to unauthorised content.  The decision means that suppliers of such devices will need to adapt their business models to avoid liability for copyright infringement. Indeed, since the judgement, a number of suppliers of these pre-configured devices have already started offering multimedia players without pre-installed add-ons, promoting them (sarcastically) as “very legal media players“, accompanied with the helpful advice not to install the infringing add-ons at home. It remains to be seen whether this will hold up in court, as the Filmspeler judgment again shows that the CJEU is willing to push the boundaries of copyright protection by making it easier for rights holders to take action, not only against the source of infringing content, but also against parties that facilitate access to illegal content, especially when done in pursuit of profit.

For individual users the judgment could have far-reaching implications as well, as the CJEU made clear that the act of ‘streaming’ can fall within the copyright author’s exclusive right of reproduction. This means that copyright owners are able to take legal action against consumers who stream unauthorised content, especially if it is ‘deliberate’ infringement (in the eyes of the individual user) or with full knowledge of the consequences.

Other stakeholders might also be affected, as the CJEU continues to expand the meaning of “communication to the public”, making parties that (only) facilitate a direct link between users and illegal content – for example, by providing a hyperlink or selling a device – liable as a direct infringer of copyright.

Background to Filmspeler

Jack Frederik Wullems, a Dutch individual, sold various models of internet connected multimedia players under the name Filmspeler (“film player”) via his website www.filmspeler.nl. On the devices, open source software (XBMC / KODI) was installed in addition to “add-ons”, which contained hyperlinks to streaming websites on which films, television series and live sporting events could be watched free of charge (ie by connecting the devices to televisions screens). In some of the add-ons the links led to unauthorised content.

Stichting Brein, a Dutch anti-piracy organisation, asked the Dutch Court for an injunction prohibiting Filmspeler from selling the devices. The Copyright Directive provides authors with the exclusive right to authorise or prohibit any “communication to the public” of their works and Stichting Brein argued that the sale of the Filmspeler media player amounted to such a communication. The District Court of the Central Netherlands, referred several questions to the CJEU before coming to a decision, which can be summarised as follows:

1. Does the sale of a multimedia player with pre-installed add-ons – containing hyperlinks to websites on which copyright-protected works have been made available to the public without the consent of the right holders – amount to a “communication to the public”?
2. Can streaming of a copyright protected work on a multimedia player without the consent of the copyright holder be considered as “a lawful use” and/or is it contrary to the “three-step test”?

Question 1: Does the sale of multimedia device constitute a communication to the public?

In answering the first question, the CJEU summarised its findings from earlier judgments, and restated that the Copyright Directive’s aim is to establish a high level of protection for authors and that the concept of “communication to the public” includes two cumulative criteria; namely an “act of communication” of a work and the communication thereof to a “public”. One of the most interesting parts of the judgment relates to the CJEUs’ findings on the intervention by the user making the “act of communication”.

Indispensable intervention or mere provision of physical facility?

In earlier cases the CJEU emphasised the importance of the “essential” role played by the user. For example, in SCF the CJEU stressed the “indispensable” role of the user. In Rafael Hoteles, the CJEU held that “in the absence of that intervention, its customers, although physically within that area, would not (…) be able to enjoy the broadcast work.” And in the GS Media case the Advocate-General (AG) was of the opinion that “in order to establish an act of communication, the intervention of the ‘hyperlinker’ must be vital or indispensable in order to benefit from or enjoy works.” Since the provision of clickable links to works which are placed on another site – without any access restrictions – is not “indispensable” for internet users to enjoy these works, in the AG’s view, providing hyperlinks to these works couldn’t be classified as an “act of communication”.

However, the CJEU in GS Media disagreed, although it acknowledged that all internet users “could (…) already have access” to the work “even the absence of that intervention“. Reaching a different conclusion than that of the AG, the CJEU first referred to its decision in Svensson and recalled that providing hyperlinks to a protected work which has been made freely available on another website with the consent of a copyright holder does not constitute a “communication to the public”. Next, the CJEU decided that providing hyperlinks to a work illegally placed on the internet does constitute a “communication to the public” if the person providing the hyperlink knew or ought to have known that the hyperlink provides access to a protected work illegally placed on the internet. But in GS Media the CJEU did not really explain why a hyperlink that is not “vital or indispensable” can still be classified as an “act of communication”.

Many hoped that the CJEU would provide more clarity in Filmspeler, but it seems that there are still some questions to be answered. In Filmspeler, the CJEU repeated that one of the most important criteria is the “essential role played by the user“:

“The user makes an act of communication when he intervenes in full knowledge of the consequences of his action to give access to a protected work (…) in particular, where, in the absence of that intervention, his customers would not, in principle, be able to enjoy the broadcast work.” 

The CJEU also acknowledged that – as recital 27 of the Copyright Directive states – the “mere provision of physical facilities for enabling or making a communication does not in itself amount to ‘communication’“. If you follow this reasoning, you’d expect that only if the sale of a multimedia player would be indispensable (i.e. an intervention in absence of which customers would not be able to enjoy the work) could it amount to a communication to the public, and that if the device would be only a physical facility for enabling or making a communication it could not amount to a “communication”. But in applying these criteria, the CJEU took a very flexible approach.

The CJEU compared the sale of a multimedia player with the situation in its earlier Rafael Hoteles judgment: installation of television sets and distribution (transmission) of a signal in a hotel and considered that “in the same way, it must be held that the present case does not concern a situation of the ‘mere’ provision of physical facilities.” This is somewhat remarkable, as in the present case – as opposed to Rafael Hoteles – there is no transmission of a work. A few years ago the European Copyright Society considered the transmission of a signal a pre-requisite for “communication”.

Referring to the opinion of the AG, the CJEU now considers that enabling users to watch works from unauthorised streaming websites on their TVs  – by selling multimedia players with pre-installed add-ons – is “quite different” from the mere provision of physical facilities. Without this “intervention”, the CJEU says it would be “difficult to benefit” from these works, as the streaming websites are “not readily identifiable” by the public and “the majority of them change frequently“.

So in Filmspeler, the CJEU took a very broad view on “essential” intervention, as it considered the intervention by Filmspeler a “communication”, even though this intervention is a physical device which is not vital or indispensable but only makes it easier (or less difficult) for users to access protected works.

Public, knowledge and profit

Because the Filmspeler device has been purchased “by a fairly large number of people” and because the communication “covers all persons who could potentially acquire the media player and have an internet connection” the CJEU concluded that the protected works are indeed communicated to a “public”.

The CJEU also repeated its findings from GS Media: not every “communication” is subject to the authorisation of the rights holder. A hyperlink can only infringe if the hyperlinker knows or should know that a hyperlink provides access to a work placed on the internet without consent of the rights holder or if restrictions are circumvented. When the posting of hyperlinks is carried out for profit, it must be presumed that that posting has occurred with the full knowledge of the protected nature of that work and the possible lack of consent to publication on the internet by the copyright holder.

In Filmspeler, the CJEU found that the multimedia player was sold with a view to making profit as the price for the player was essentially paid to obtain access (via the pre-installed add-ons) to protected works illegally placed on the internet.  The fact that  Filmspeler had full knowledge of the illegal nature of the protected nature of the works and lacked consent, was evidenced by its advertisements which specifically stated that the player made it possible to “watch on a television screen, freely and easily, audio-visual material available on the internet without the consent of the copyright holders.”

Question 2:  lawful streaming?

Filmspeler had argued that the streaming of works from an illegal source (unlike the downloading of such works, see ACI/Adam) was covered by an exception on the right of reproduction, which excludes temporary acts of reproduction if certain conditions are met (art. 5(1) Copyright Directive). As the Commission points out, this second question does not concern the person who sells the multimedia player but the actions of the end user.

The CJEU made clear that the exemption must be: (1) interpreted strictly and: (2) in compliance with the ‘3 step test’, under which (step 1) the exemption is to be applied only in certain special cases which (step 2) do not conflict with a normal exploitation of the work and (step 3) do not unreasonably prejudice the legitimate interests of the right holder.

One of the conditions of the exemption is that the sole purpose of the temporary reproduction is a lawful use of a work. According to the CJEU, this was not the case as the device in question was advertised as making it possible to watch audio-visual material without consent of the copyright holders and because the purchasers of the device deliberately and in full knowledge accessed a free and unauthorised offer of protected works. In addition, the CJEU found that temporary reproductions made on such a multimedia player adversely affected the normal exploitation of those works. It also caused unreasonable prejudice to the legitimate interests of the right holders, mainly because this use resulted in a diminution of lawful transactions.

The Future: Going Dutch… Again!

Filmspeler is the CJEU’s second judgment in a series of Dutch cases relating to the concept of “communication to the public”. Last year, in a case involving unpublished Playboy photos of Dutch TV-personality Britt Dekker (GS Media, MediaWrites Analysis), the CJEU decided that providing hyperlinks can amount to a communication to the public. In Filmspeler, the CJEU made it clear that rights holders can take action against the sale of a multimedia player and against streaming individuals.

Next week – a third ‘Dutch’ Judgment is expected when the CJEU needs to decide if the activities of an operator of an indexing website (The Pirate Bay) amount to a communication to the public (Stichting Brein).  The AG has opined that this is indeed the case, if that operator was aware of the lack of consent of the copyright holders and if it did not take action in order to make access to that work impossible.

In light of Filmspeler, whether the CJEU will follow the AG’s approach and continue to stretch the meaning of “communication to the public” remains to be seen… watch this space!