CJEU rules on interpretation of Copyright Directive, IP Enforcement Directive and General Data Protection Regulation in peer-to-peer network context

June 29, 2021

The Court of Justice of the European Union has ruled in Mircom International Content Management & Consulting (MICM) Limited v Telenet BVBA (Case C-597/19) on the interpretation of the Copyright Directive (2001/29/EC), IP Enforcement Directive (2004/48/EC) and GDPR ((EU) 2016/679) in the context of copyright infringement involving peer-to-peer networks.

The case centred on so-called “copyright trolls” who threaten court action so they can collect the names and addresses of infringers to offer them an amicable settlement in return for the payment of a certain sum, usually without actually going ahead with court proceedings. In this instance, the case arose in the context of licences for the communication to the public of films on peer-to-peer networks and internet file-sharing networks, which were held by the claimant Mircom. The licences contracts required Mircom to investigate acts of infringement of the film producers’ exclusive rights committed on the networks and, in its own name, to take legal action against the infringers to get compensation. It had to pass half of that compensation to the film producers.

Mircom sought an order in the Antwerp Companies Court that the ISP Telenet produce the identification data for its customers whose internet connections had been used to share on a peer-to-peer network using the BitTorrent protocol films from the claimant’s catalogue. The Belgian court referred the case to the CJEU for a preliminary ruling on the following questions:

  • Can the downloading of a file via a peer-to-peer network and the simultaneous provision for uploading of parts (‘pieces’) thereof (which may be very fragmentary as compared to the whole) (‘seeding’) be regarded as a communication to the public under Article 3(1) of the Copyright Directive 2001/29, even if the individual pieces as such are unusable?
  • If so, is there a de minimis threshold above which the seeding of those pieces would constitute a communication to the public?
  • Is the fact that seeding can take place automatically (as a result of the torrent client’s settings), and thus without the user’s knowledge, relevant?
  • Can a person who is the contractual holder of the copyright (or related rights), but does not themselves exploit those rights but merely claims damages from alleged infringers — and whose economic business model thus depends on the existence of piracy, not on combating it — enjoy the same rights as those conferred by Chapter II of the Enforcement Directive 2004/48 on authors or licence holders who do exploit copyright in the normal way?
  • How can the licence holder in that case have suffered ‘prejudice’ (under Article 13 of Directive 2004/48) as a result of the infringement?
  • Are the specific circumstances set out in questions 1 and 2 relevant when assessing the correct balance to be struck between the enforcement of intellectual property rights and the rights and freedoms safeguarded by the Charter on Human Rights, such as respect for private life and protection of personal data, particularly in the context of the assessment of proportionality?
  • Is, in all those circumstances, the systematic registration and general further processing of the IP-addresses of a ‘swarm’ of ‘seeders’ (by the licence holder, and by a third party on their behalf) legitimate under Article 6(1) of the GDPR?

In December 2020 Advocate General delivered an opinion in the proceedings.

The Court has now delivered its ruling:

  • Articles 3(1) and (2) of Directive 2001/29/EC mean that the uploading, from the terminal equipment of a user of a peer-to-peer network to such equipment of other users of that network, of pieces, previously downloaded by that user, of a media file containing a protected work, even though those pieces are usable in themselves only as from a certain download rate, constitutes making available to the public under the Directive. It is irrelevant that, due to the configurations of the BitTorrent client sharing software, that uploading is automatically generated by it, when the user, from whose terminal equipment that uploading takes place, has subscribed to that software by giving his or her consent to its application after having been duly informed of its characteristics.
  • Directive 2004/48/EC means that a person who is the contractual holder of certain intellectual property rights, who does not however use them himself or herself, but merely claims damages for alleged infringers, may benefit, in principle, from the measures, procedures and remedies provided for in Chapter II in that Directive, unless it is established, in accordance with Article 3(2) and on the basis of an overall and detailed assessment, that his or her request is abusive. A request for information under Article 8 of the Directive must also be rejected if it is unjustified or disproportionate, and this was for the referring court to decide.
  • The GDPR and the E-Privacy Directive 2002/58/EC preclude in principle, neither the systematic recording, by the holder of intellectual property rights as well as by a third party on his or her behalf, of IP addresses of users of peer-to-peer networks whose internet connections have allegedly been used in infringing activities, nor the communication of the names and of the postal addresses of those users to that rightholder or to a third party to enable it to bring a claim for damages before a civil court for prejudice allegedly caused by those users, provided, however, that the initiatives and requests to that effect of that rightholder or of such a third party are justified, proportionate and not abusive and have their legal basis in a national legislative measure, under Article 15(1) of Directive 2002/58, which limited the scope of the rules in Articles 5 and 6.