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CJEU rules on enforcement of IP rights by 'copyright trolls'

Posted on 27 July 2021

The European Court of Justice (CJEU) recently delivered its ruling in Mircom International Content Management & Consulting (M.I.C.M.) Limited v Telenet BVBA and others clarifying the basis upon which so-called 'copyright trolls' can seek to enforce IP rights, and obtain information about alleged infringers in order to enforce those rights. The case concerned Mircom, a business that holds licences for certain rights in pornographic films, which sought the personal data of individuals that were alleged infringers of IP rights in those films through unauthorised file sharing on peer-to-peer networks.

The CJEU concluded that, whilst 'copyright trolls' are entitled to benefit from EU protection of their IP rights, this will not be the case if their claim is an abusive one. The decision also provided clarification in relation to infringement of copyright through sharing files on peer-to-peer networks, and in relation to the interplay with the General Data Protection Regulation.

Background

Cypriot-based Mircom holds licences for certain rights in pornographic films. Under the agreements with the producers of the pornographic films, Mircom obtained the right to communicate to the public the films on peer-to-peer networks in Europe. Under its licence agreements with the producers, Mircom is required to take legal action against infringers of the producers’ copyright in order to obtain compensation, 50% of which Mircom is entitled to keep, and 50% of which it is obliged to provide to the producers.

In effect, therefore, Mircom is a 'copyright troll', i.e., a contractual holder of a copyright, who does not itself exploit the copyright. Instead, its aim typically is to seek damages from alleged infringers of copyright works, with the objective of retrieving settlement pay outs as the alleged infringer does not feel able to defend a potential claim.

In order to pursue individual alleged infringers, Mircom sought disclosure from Belgian ISP Telenet of customer details linked to IP addresses, which it alleged had been used to share films from its catalogue on a peer-to-peer network using Bit Torrent technology. These IP addresses had been collected by a company on Mircom's behalf. After Telenet refused to provide the information, Mircom issued proceedings in the Belgian courts.

The Belgian Court sought guidance from the CJEU as to whether Mircom was entitled to obtain this information when its conduct could fit the definition of a 'copyright troll'. It also sought clarification of whether the sharing of the files on the peer-to-peer network using Bit Torrent technology consisted of an infringing communication to the public made by individual users. Finally it sought clarification of whether the manner in which the IP addresses were collected by Mircom was lawful, and whether it would be lawful for Telenet to provide Mircom with the personal data of its customers.  

CJEU decision

First, the CJEU held that the uploading of pieces of a media file by users onto a peer-to-peer network constitutes making the copyright material available to the public within the meaning of EU law (Article 3 of the InfoSoc Directive). It did not matter that the smaller file chunks were not in themselves useable or that the process of uploading the downloaded content was automated, as the alleged infringers had subscribed to Bit Torrent software and had therefore consented to the way that it worked. The CJEU concluded that what mattered was whether protected content had been made available in such a way that the persons comprising the public may access it, and here it had been.

Secondly, the CJEU ruled that 'copyright trolls' who bring an action as an assignee (and which are a contractual holder of the relevant rights) may be granted the benefit of the measures, procedures and remedies provided for by EU law (by the IP Enforcement Directive), notwithstanding the fact that they do not use those rights. The CJEU noted that, if a holder of intellectual property rights chooses to outsource the recovery of damages to a specialised undertaking by assigning claims, it should not suffer less favourable treatment than another owner of such rights who would choose to assert them personally.

Whilst it is for the Belgian court to determine whether Mircom's request was abusive, the CJEU provided guidance as to potentially relevant factors including an analysis of its operating method, whether it offers amicable solutions to alleged infringers and whether it actually brings legal proceedings in the event of a refusal to reach an amicable solution. It could also examine whether the facts point to Mircom attempting to extract pay-outs from users in a peer-to-peer network under the pretence of seeking amicable solutions, without seeking to combat copyright infringement.

Finally, the CJEU ruled that, the process of collecting the IP addresses of users and the communication of their names and postal addresses (consisting of personal information under the EU GDPR), to IP holders such as Mircom to enable them to bring an action for damages was permissible. However, the request for information must be justified, proportionate and non-abusive. 

Comment

As the CJEU's decision comes after the end of the Brexit transition period, it is not binding on the UK courts, though they may take it into account when assessing similar claims relating to copyright infringement by peer-to-peer sharing, as well as requests for individuals' contact details by 'IP trolls'.

It is worth highlighting the outcome in a UK case a few years ago also concerning Mircom (Mircom v Virgin Media) where it was unsuccessful in obtaining the names and addresses of 'tens of thousands' of Virgin Media customers that it alleged were infringing its IP rights. The court in that case refused to grant the orders sought due to defects in the factual and expert evidence, but noted that the general approach was as set out in the earlier Goldeneye litigation, where one key question was whether the applicant is genuinely intending to vindicate its IP rights. In essence, the current position in UK law appears to be that the evidence must show that the requested information will genuinely be used to obtain redress for infringement.

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