Scandal on Twitter, fakes on eBay: So who's liable?

Legal Eye: The liabilities of internet companies is growing clearer...

...on a case currently before it, Football DataCo vs Sportradar, that copyright infringement via internet transmission takes place where the infringer's servers are, rather than where the end user is.

We have had European legislation aimed at dealing with this difficult balance since as long ago as 2002. The basic approach is that:

  • Intermediaries that are merely conduits of, or merely host or cache, data will not be liable in respect of information transmitted via their service, and do not have to monitor content actively.
  • But intermediaries that merely host or cache can be liable, in certain situations, if notified of illegal content which they fail to remove.
  • In addition, intermediaries with actual knowledge of infringement can be ordered to take measures to stop their service being used to infringe copyright.

The main exemption from liability applies both to IP rights and other forms of liability. So for example, this legislation would potentially provide a defence for Twitter, in that it was a mere conduit for the tweets about certain celebrities that breached the recent UK privacy super-injunctions.

Online marketplaces

In defending a claim brought by L'Oréal, eBay argued it was a host and so not liable for counterfeit goods sold by users of its website. The CJEU held on 12 July that where an online marketplace operator has provided assistance to the seller of counterfeit goods - for example, by promoting them through the use of Google AdWords - it will be considered not to have taken a "neutral position... but to have played an active role". In such situations, eBay could be liable for acts of trademark infringement brought about by the users of its site.

The CJEU also found that national courts may impose injunctions on intermediaries such as eBay not only to stop existing infringements, but also to prevent further infringements occurring. So an intermediary could be ordered to identify its users, or deny an infringing user further access to its site. The CJEU stated that such injunctions must be "effective, proportionate and dissuasive, and must not create barriers to legitimate trade".

Blocking access to a file-sharing site

On 28 July, the Motion Picture Association of America (MPAA), representing the major Hollywood studios, successfully obtained the first ever order from a UK court requiring an ISP - in this case, BT - to block access by UK users to a file-sharing site.

In so doing, the judge heard and rejected numerous arguments run by the ISP on such grounds as proportionality, the fact that the claimants did not own all of the copyright being infringed on the site, and the fundamental human rights of internet users to freedom of expression.

The judge importantly found that the knowledge requirement for this injunction procedure to apply was that the ISP had "actual knowledge of one or more persons using its service to infringe copyright". It was not, as BT argued, necessary to prove actual knowledge of a particular infringement of a particular copyright work by a particular individual.

The MPAA is jubilant and plans to force all the other major UK ISPs to adopt the same blocking measures.

This case - which follows similar recent applications in respect of file-sharing sites in seven other EU countries, mostly in respect of the infamous Pirate Bay site - provides a clear blueprint for other rights owners.

While the hurdles to obtaining such a court order are not insignificant, and each case will turn on its facts, this example is sure to encourage at least some to follow suit.

John Wilks is an associate at law firm DLA Piper.