European Court of Justice Provides Narrow Answer to Question of Jurisdiction for Internet-based Copyright Infringement

European Court of Justice Provides Narrow Answer to Question of Jurisdiction for Internet-based Copyright Infringement

Let’s assume you’re a French musician part of a hip British indie-rock band. 30 years later, you discover that an Austrian company has been making unauthorized CDs and a UK-based outfit has been selling them online.  Can your home court in France hear your action against the Austrian CD manufacturer?  According to a recent preliminary ruling by the European Court of Justice, the answer appears to be yes.

A.      “Dude, Where Are We?” - A Quick Review of The European Court of Justice

The European Court of Justice (Court of Justice) is the highest court in the European Union on matters involving European Union law (“Union law”). It is responsible for interpreting Union Law and ensuring that it is equally applied across all EU member states. While the Court of Justice is the supreme guardian of Union legality, many provisions of Treaties signed by Member States directly confer individual rights on nationals of Member States, which national courts are bound to uphold. Thus, national courts can be thought of as “the first guarantors” of Union law.

To ensure the effective and uniform application of Union legislation and to prevent divergent interpretations, national courts may turn to the Court of Justice and ask for clarification on a point concerning the interpretation of Union law. Those national courts that receive replies are bound by the interpretation given by the Court of Justice. Other national courts facing problems of the same nature are also bound by the decision. Although requests for references may only be raised by a national court, all the parties involved may take part in proceedings before the Court of Justice.

B.      Peter Pinckney’s Problem: Keeping his Fight in France

Aubrey Small was a British rock band that enjoyed short-lived success in the 1970s. Peter Pinckney is the author, composer and performer of 12 songs recorded by that group. In the early 2000s, he discovered that his songs had been reproduced without his authority on CDs in Austria by Mediatech and marketed by the UK company Crusoe.

In 2006, Pinckney brought an action against Mediatech (para 10) for copyright infringement in the Toulouse Regional Court. Mediatech challenged the jurisdiction of the French courts on this matter. The Regional Court of Toulouse dismissed the Austrian jurisdictional challenge on the grounds that Mr. Pinckney had been able to purchase the infringing records from a website that was widely accessible to the French public. This, the Court ruled, was sufficient to establish the substantial connection between the facts and the alleged damage to grant jurisdiction to the French courts.

The Toulouse Court of Appeal reversed this decision (para 13), ruling that the French court had no jurisdiction since the defendant was domiciled in Austria and because there was no way damage to Pinckney could have occurred in France given that the CDs were marketed in the UK.

C.      Pinckney’s Appeal and the French Court’s Request for a Ruling on Article 5(3)

Pinckney brought an appeal in cassation (para 14) against the Toulouse judgment, relying on Article 5(3) of the Brussels I Regulation which states that:

“A person domiciled in a Member State may, in another Member state, be sued:
(3) In matters relating to tort*, delict or quasi-delict, in the courts for the place where the harmful event occurred or may occur.”

In light of Pinckney’s appeal, the French court of cassation decided to stay its proceedings and refer to the Court of Justice for a preliminary ruling on the correct interpretation of 5(3).

D.      Court of Justice’s Ruling: Reiterated Melzer, Applied eDate and Wintersteiger

The Court of Justice responded to the Pinckney question by restating the interpretation of Article 5(3) it outlined in Melzer v MF Global (Melzer), eDate Advertising v Martinez (eDate) and Wintersteiger v Products 4u Sondermaschinebau GmbH (Wintersteiger).

In Melzer, the Court of Justice established that Article 5(3) should be interpreted to mean that a defendant may be sued in the place where the damage occurred (locus damni) and, if different, where the action or inaction leading to that damage occurred (locus delicti commissi).  The Court of Justice conceded however that one limitation of Melzer was that it did not cover the possibility of suing an alleged perpetrator of the alleged damage before the court seised on the basis that it is the place of the event giving rise to the damage.

In this case, it was common ground that the allegedly infringing action did not take place within France.  The question at hand was whether or not the court had jurisdiction, given that it was the location where the alleged damage occurred. 

In eDate and Wintersteiger, the Court of Justice developed three principles for the interpretation of Article 5(3) when applied to allegations of infringement committed via the internet.  These were:

(1)   That the place where the alleged damage occurred within the meaning of that provision may vary according to the nature of the right allegedly infringed (Wintersteiger, paras 21 to 24);

(2)   That the likelihood of the damage occurring in a particular Member State is subject to the requirement that the right in respect of which infringement is alleged is protected in that Member State (Wintersteiger at para 25); and

(3)   In order to attribute jurisdiction to a court to hear an allegation of infringement in matters of tort, the identification of the place where the alleged damage occurred also depends on which court is in the best position to determine whether the alleged infringement is well founded (eDate at para 48 and Wintersteiger at para 27).

To identify the place where damage caused by actions on the internet occurred, the Court of Justice applied these principles.  Consequently it distinguished between the infringement of personality rights and the infringement of intellectual and industrial property rights.

The Court then reiterated that victims of personality right infringement (protected in all EU Member States) may bring his or her action in the court of the Member State where the harmful event occurred.  Moreover, if the offending work has been placed online he or she may bring an action in the territory of any Member State where the action is accessible. However, those courts only have jurisdiction with respect to the damages caused in the territory of the court seised (eDate at para 52).

The Court of Justice further specified that the allegation of an infringement of an intellectual and industrial property right (which is typically vests through registration) is limited to the territory of the Member State of registration and may only be brought before the court of that State.  This is because the Court of Justice has deemed that these are the courts best placed to ascertain whether the right at issue has been infringed (Wintersteiger at paras 25 to 28).

Based on these principles, the Court of Justice ruled that,

In the event of alleged infringement of copyrights protected by the Member State of the court seised [in this case France], the latter has jurisdiction to hear an action to establish liability brought by the author of a work against a company established in another Member State [in this case Austria] and which has, in the latter State, reproduced that work on a material support [in this case by pressing CDs] which is subsequently sold by companies established in a third Member State [in this case the UK] through an internet site also accessible with the jurisdiction of the court seised [in this case France]. However that court has jurisdiction only to determine the damage caused in the Member State within which it is situated [in this case France].

In other words, the Court of Justice constructed a very narrow interpretation of article 5(3) to allow the Toulouse Court to hear Pinckney’s suit against Mediatech while restricting its assessment of damages to those damages that would have occurred in France.

E.       An Unresolved Matter: Did Mediatech Actually Violate Copyright?

Of course, the question left hanging by the Court of Justice is whether or not a company in another Member State making CDs for a second Member State is in fact a violation of French copyright law.  This question will now be for the French courts to determine.

F.       Significance of this Decision? 

This particular ruling would appear to only be of use to a copyright holder who (1) is seeking jurisdiction in his or her home state that is (2) an EU Member state which has (3) copyright protection and (4) has had his/her copyrights violated in another EU Member state (5) wherein the alleged violation involved the reproduction of the work "on a material support" (6) and was then sold by parties in another EU Member state (7) through an internet site (8) wherein that site was accessible from the author's home state.

The extremely narrow interpretation provided by the Court of Justice is understandable, given that  in Europe, like most places in the world, copyright vests without the requirement of formal registration (Berne Convention, article 5.2).  A broad interpretation of article 5(3) fling national court doors open to artists clamoring for damages against actors in other states on the broad grounds of the violation of personality rights. However, given the European Court of Justice's tenuous relationship with some of the national courts in the Union, the Court of Justice was likely mindful of creating too wide of a doorway when crafting this decision.

As a small technical point, one could argue that the European Court of Justice relied too heavily on a trademarks case (Wintersteiger) in crafting its decision with respect to copyright.  In so doing, it could be argued that the Court of Justice misapplied a set of principles originally crafted for a formality-based regime to a formality-free question.  However, in light of the broader policy concerns outlined above, it is not likely that this would compel any future proceeding before the Court of Justice.

This decision then is a somewhat uninteresting legal end to an otherwise exciting news story. Still, for non-European practitioners, this decision provides some insight into copyright protection in the European Union.

Beatrice Sze is an IPilogue Editor and a JD Candidate at Osgoode Hall Law School.