France: Radioblog condemned to damages for over €1 million

The French Supreme Court (“Cour de Cassation”) has upheld, in a ruling of 25 September 2012, a judgment of the Court of Appeal of Paris condemning Radioblog and its managing directors to the payment of damages amounting to over €1 million, in addition to a suspended prison sentence of nine months and a €10,000 fine.

The case is interesting for two reasons: the gigantic amount of damages and the application, for the first time, of new provisions of the French Intellectual Property Code condemning the provision of software applications intended to be used for infringing copyright.

The facts are the following: the website Radioblog provided a software called ‘RadioBlogClub’ to Internet users that enabled them to create a music player on an Internet page and to broadcast musical files in the form of playlists accessible to anyone (via streaming). This system did not however allow the Internet users to download the musical files. Moreover, the device enabled the Internet users to research music by title or by artist from a database available on the website radioblog.fr.

Software manifestly intended to communicate unauthorised works to the public

The Court of Appeal of Paris, in its decision dated 22 March 2011, condemned Radioblog and its managing directors, not only (very classically) for communicating protected recordings to the public in violation of Article L. 335-4 of the Intellectual Property Code, but also on the grounds of Article L. 335-2-1 of the same code, which punishes anyone who “publishes, makes available or communicates to the public, knowingly and in any form whatsoever, software manifestly intended to communicate unauthorised works or protected objects to the public” with up to 3 years imprisonment and a fine of up to €300,000.

The Supreme Court upholds the ruling of the Court of Appeal Paris, which had considered that these provisions were applicable in this case, since the website offered to Internet users the possibility of listening to recordings, most of which were protected by intellectual property” and since “the accused, who are professionals in a very specialised field, could not ignore the obligation to ensure compliance with the rights of the right owners, before allowing the public to broadcast the works”.

Punitive damages

The ruling of the French Supreme Court is also very interesting in that it upholds the judgement of the Court of Appeal, which awarded over €1 million in damages to the two unions representing French record producers, which took action against Radioblog (SCPPand SPPF). This amount of damages is based on the amount of profits that were made by the websites through publicity. The Court of Appeal based its decision on paragraph 1 of Article L. 331-1-3 of the Intellectual Property Code which provides that “To award damages, the court takes into account the negative economic consequences, including lost profits suffered by the injured party, the profits made by the infringer and the moral prejudice caused to the holder of these rights because of the infringement”.

The Cour de Cassation upheld the Court of Appeal’s judgment, ruling that the assessment of damages is left to the discretion of the lower courts. This is however questionable. Even though the Supreme Court is not the judge of the facts, the way in which the Court of Appeal of Paris assessed the prejudice of the plaintiffs should be considered as breaching the law, since the French judges are not supposed to indemnify beyond the actual prejudice. Indeed, the Court of Appeal did not define the prejudice actually suffered by the plaintiffs. The two French above-mentioned unions certainly do not represent the entire musical production, as well as the authors, publishers, performing artists, etc. In a way, the Court of Appeal of Paris applied serious punitive damages (see Axel Saint Martin, Radioblog – Peine privée pour contrefaçon, RLDI 2009, 53), and the Supreme Court approved the Court of Appeal in the negative, by simply ruling that it is not the judge of the facts.

YS Avocats, Law Firm

Football Dataco II: ‘Re-utilisation’ must be interpreted broadly

European Court of Justice, 18 October 2012, Football Dataco and others v. Sportradar, C-173/11

On 18 October 2012, the European Court of Justice (ECJ) rendered its judgment in Football Dataco II (C-173/11), in which it ruled that data is re-utilised in a Member State, the meaning of Article 7 of the Directive 96/9, if there is evidence that the alleged infringer intended to target members of the public in that territory.

The Court of Appeal of England and Wales made a reference for a preliminary ruling concerning the interpretation of Article 7 of the Directive 96/9/EC on the legal protection of databases, in the proceedings opposing Football Dataco Ltd, Scottish Football League and PA Sport UK Ltd (hereafter ‘Football Dataco’) and Sportradar (Sportradar GmbH and Sportradar AG).

Football Dataco organises football competitions in England and Scotland, and manages the creation and exploitation of the data and intellectual property relating to these competitions. Football Dataco claims to have, under UK law, a sui generis right in its database, which is a compilation of data about football matches in progress (goals, yellow and red cards, etc.).

Sportradar provides results and statistics relating to English league matches live on the Internet. It enters into agreements with betting companies that provide betting services aimed at the UK market. The websites of these betting companies contain a link to Sportrador’s website (betradar.com), which allows the internet users to access the data.

Football Dataco brought a case against Sportrador before the High Court of Justice of England and Wales, on the grounds of the infringement of its sui generis right, arguing that the defendants had copied data from its database in order to compile data for its own services. Sportrador challenged the High Court’s jurisdiction, which nevertheless declared that it had jurisdiction in a judgment dated 17 November 2010.

The parties both appealed the decision in the Court of Appeal of England and Wales, which decided to refer the following question to the ECJ:

‘Where a party uploads data from a database protected by the sui generis right under Directive 96/9/EC … onto that party’s web server located in Member State A and in response to requests from a user in another Member State B the web server sends such data to the user’s computer so that the data is stored in the memory of that computer and displayed on its screen:

is the act of sending the data an act of “extraction” or “re-utilisation” by that party?

does any act of extraction and/or re-utilisation by that party occur

in A only,

in B only; or
in both A and B?’

‘Re-utilisation’ must be interpreted broadly

Article 7(1) of the Directive provides that the sui generis right is the right for the maker of a database “to prevent extraction and/or re-utilisation of the whole or a substantive part” of the contents of that database. And Article 7(2)(b) provides that ‘re-utilisation’ means “any form of making available to the public all or a substantial part of the contents of a database by the distribution of copies, renting, by online or other forms of transmission”.

In its judgement, ECJ refers to The British Horseracing Board and Others (case C-203/02) to state that the concept of ‘re-utilisation’ must “be understood broadly, as extending to any act, not authorised by the maker of the database protected by the sui generis right, of distribution to the public of the whole or a part of the contents of the database”. The Court observes that the nature and form of the process are of no relevance in this respect.

The ECJ then rules that ‘re-utilisation’ must “be interpreted as meaning that the sending by one person, by means of a web server located in Member State A, of data previously uploaded by that person from a database protected by the sui generis right under that directive to the computer of another person located in Member State B, at that person’s request, for the purpose of storage in that computer’s memory and display on its screen, constitutes an act of ‘re-utilisation’ of the data by the person sending it.”

In our case, the betting companies entered into agreements with Sportradar to have access to its web server, and in turn they made that server accessible to their own customers. This is an act of distribution under Article 7 of the Directive.

Location of the re-utilisation: ECJ refuses ‘infringement forum shopping’

Sportradar argued that an act of re-utilisation within the meaning of Article 7 of Directive 96/9 must be regarded as located exclusively in the territory of the Member State in which the web server from which the data is sent is located (the ‘emission theory’). Thus, Sportradar considers that the English courts do not have jurisdiction. The ECJ explains that if it were to follow such an interpretation, it would mean that an operator who proceeds to re-utilise online the data of a database, targeting the public of a Member State, would escape the application of the national law of that State because its server is located outside the territory of the State in question. And infringers could even escape the application of the European sui generis right by simply locating their servers outside of the EU!

On the other hand, the Advocate General, in his opinion delivered on 21 June 2012, interpreted broadly Article 7(2)(b) of Directive 96/9 and concluded that the act of re-utilisation occurs “as a result of a sequence of actions in a number of Member States and must be regarded as having taken place in each and everyone of them”.

The ECJ does not go as far as the Advocate General, and observes that given the ubiquitous nature of the content of a website, the mere fact that the website is accessible in a national territory is not sufficient to consider that the operator of that site is performing an act of re-utilisation caught by the national law. If not, it would be possible to conclude that there is an act of re-utilisation in any Member State where an internet user can technically access the website containing the data, that is to say virtually any Member State.

The ECJ refers to the case law it developed in trade mark law (case C-324/09 L’Oréal and Others, para. 64, but also joined cases C-585/08 and C-144/09 Pammer and Hotel Alpenhof, para. 69) to rule that the localisation of an act of re-utilisation depends on there being evidence that the act of re-utilisation discloses an intention to target persons in that territory. The ECJ adds that such intention must be assessed by the national courts.

The ECJ gives a few examples of the type of evidence of such intention to target members of the public of a Member State:

- The fact that Sportradar entered into agreements with companies that offered betting services to UK clients. The fact that the agreements take into consideration the amount business in the UK to fix the remuneration would constitute additional evidence of Sportradar’s knowledge of the destination of the data.

- The fact that the data was accessible in English to UK Internet users (who were clients of the companies in question), whereas English is not commonly used in the Member States from which Sportradar pursues its activities.

By applying its trade mark case law relating to jurisdiction, the ECJ refuses two types ‘infringement forum shopping’:

- The companies that re-utilise data protected in a EU Member State by a sui generis right, without authorisation, cannot rely on the emission theory and locate the servers in another Member State or (even worse) outside of the EU, in order to escape infringement proceedings in that State.

- The makers of databases cannot rely on the mere accessibility of a website re-utilising data protected by a sui generis right to bring an infringement case before the courts of any State where the website can be accessed, without there being evidence that the alleged infringer targeted the public of that State.

Read the ruling: C-173/11

YS Avocats, Law Firm