Prof. Jane C. Ginsburg, Columbia University School of Law*
August 6, 2012

My last column, “Host Service Provider Liability for User-Posted Content: A View from the EU,” discussed two first-instance decisions from France and Germany concerning host service provider liability for “user-generated content” that infringes copyright.  In both cases, the courts confronted the EU norm dispensing host service providers from a general duty to monitor their sites proactively to prevent infringements.

The Hamburg district court ruled that once the copyright owners (there, GEMA, the collective management society for musical compositions) sent an initial take-down notice to the host service provider (there, YouTube) identifying the infringing content, the burden shifted to the service to prevent subsequent postings of the same content (identified on a list provided by the collecting society) by the same or other users.  According to the court, the service provider’s obligation would have been “general” had it not been preceded by an individualized notice-and-take-down; once the host was notified regarding specific content, however, the copyright owner’s provision of a “stay down” list underpinned a specific, rather than a general, monitoring duty.

By contrast, the Paris district court held that the plaintiff broadcasters were obliged to notify YouTube each time they identified infringing postings; preventative blocking of user postings, even following specific take-down notices respecting the same content, would constitute an impermissible general obligation to monitor.  In describing the Paris court’s decision, I suggested it was in some tension with court of appeals decisions which had imposed a duty of preventative blocking once the service had been made aware of the infringement through an initial take-down notice.  The Court de cassation, France’s highest civil law court, has now rejected those court of appeals decisions.1

On July 12, 2012, in an action brought by a documentary filmmaker against Google Video for hosting user-generated postings of the documentary (about French government corruption) the High Court ruled that:

the anticipatory action the court of appeals imposed on Google to prevent all new postings of infringing videos, without Google’s having been advised by another proper notification, which is nonetheless required so that Google has effective knowledge of its illicit character and of its location on the site and thereby become bound to act promptly to withdraw the work or disable access to it, amounts to subjecting Google … to a general obligation to monitor….

At first blush, the ruling would appear a devastating loss for copyright owners, who would be obliged to resume “whack-a-mole” serial notifications to host service providers every time content taken down pursuant to one notice reappears, reposted by other users.  In fact, however, in France, as in the United States, content owners and host services are reaching contractual agreements to filter out identified content before it reaches the UGC website.  Host providers have two motivations to engage in proactive filtering.  First, while it may be expensive for content owners to identify and notify every time infringing content appears, it is not costless for service providers to block or remove that content on a one-by-one basis.  Advance clearance may save both parties’ expenses.  Second, and more significantly, proactive filtering allows the host provider to monetize the content by adjusting advertising rates in accordance with the value of the content (and sharing the revenue with the copyright owners when they authorize the posting of their works).  Without an accord with copyright owners, the hosts could not maximize the value of the user-generated postings of third-party copyrighted works because neither the U.S. nor the EU ISP immunity regimes would cover the host provider once it profits directly from specific content.

Copyright owners, at least large entities with bargaining power, be they major media companies or collecting societies (in Europe, unlike the United States, collecting societies acquire exclusive rights from the authors, and thus are copyright owners; because of antitrust constraints, the U.S. societies, ASCAP and BMI, hold only non-exclusive licenses), thus may have lost a legal battle, and thereby weakened their negotiating position, but in the long run the French High Court’s decision may not significantly alter the trend toward contractual agreements to filter content in advance of its posting to the website.  The more likely losers appear to be the small copyright owners, including the plaintiff documentary filmmakers, who may not, on an individual basis, be as well-situated to obtain the service providers’ cooperation to filter pro-actively.  Service provider amenability to anticipatory filtering may turn on who bears the cost of preparing the electronic “fingerprints” that the service provider’s (or third-party) filter would compare with the user-posted material.  If individual creators are to shoulder those costs, then their practical ability to benefit from anticipatory filtering will depend on what those costs are.

In addition to the take down/stay down controversy, the French High Court’s decision addressed an issue that may have significantly greater practical implications, and regarding which the High Court ruled in the authors’ favor.  U.S. copyright aficionados will recall the Ninth Circuit’s decision Perfect10 v. Amazon,2 in which the court held that Google’s framing of third-party websites reproducing images that allegedly infringed Perfect10’s “adult” photographs did not violate Perfect10’s exclusive right to publicly display its copyrighted photographs.  In that controversy, when a user employed the Google search engine to locate photographs, Google would display thumbnail images that responded to the search query.  If the user clicked on one of those images, he would be directed to the website on which the photograph was stored, but would perceive the full-size image (in the context of the webpage on which it appeared) through the frame of the Google website.  As a result of this “in-line framing” the user experienced the display as if it were emanating from Google, but in fact the image was residing on a third-party computer.  The Ninth Circuit, endorsing the “server theory” of public display, held that Google publicly displayed the thumbnails, which were stored on Google’s servers, but not the full-size images, which were stored on other computers.3  Thus, although Google derived the economic benefit of placing its advertising next to the framed third-party website content, only the source websites committed a copyright-implicating act, be it reproduction or public display.

In the French controversy, Google Video both hosted content uploaded by users and deep-linked and framed content on third-party websites.  The documentary filmmakers complained that users could access unauthorized copies of their film through links provided by Google Video.  The High Court confirmed the Paris Court of Appeals ruling that had held that:

Google offers users the possibility, through linking to other sites, to view the film on its own Google Video France site, and that as a result Google implements an active function which allows it to appropriate the content stored on third party sites in order to exhibit it directly from its pages for the benefit of its own clients.  Under this reasoning, the court of appeals, which had held that Google thus reproduced the film on its Google Video France site without the authorization of the rightholders of the film, an act which constitutes infringement, legally justified its ruling that Google thus exceeded the implementation of a simple technical function.

The High Court further held that the court of appeals was “not obliged to conduct an inquiry which would not have excluded the imputation to Google of acts of unlawful public performance.”  The High Court’s murky formulation (no clearer in the original French) seems to mean that, were the issue to be pressed, Google would have been found to have infringed not only the reproduction right, but also the right of public performance.

Two aspects of this part of the High Court decision warrant emphasis, particularly in comparison with the Ninth Circuit caselaw.  First, the French court did not credit the “server theory.”  Rather, it treated Google’s deep-linking and framing as an act of reproduction, and implicitly of public performance, even though it recognized that the content was stored on the third-party sites.  Unlike the Ninth Circuit, the French court appears to perceive Google’s acts as would the end-user who clicks on the Google-supplied link but – thanks to the frame and the link that by-passes the source website’s home page to go directly to the requested content – views the film as if she were still watching from Google Video’s website.

Second, Google’s appropriation of the third-party website content through its deep-linking and framing disqualifies it from the service provider liability limitations because those acts exceed the “simple technical function” that the EU eCommerce Directive and its transposition into French law were intended to immunize.  French and EU caselaw have emphasized that the liability limitations apply to “neutral” service providers; provision of “simple technical functions” maintains a degree of attenuation between the content and the service provider’s conduct.  Google’s appropriations put it in the same position as the direct supplier of the illicit content.  Another judgment of the French High Court concerning Google and rendered the same day4 underscores the importance of remaining aloof from the referenced or stored content.  In that case the High Court overturned an appellate court judgment that had applied the service provider liability limitation to the “Google Suggestions” search term function.  The association of record producers charged that Google’s “suggestions” of the keywords “Megaupload,” “Rapidshare,” and “Torrent” in response to user searches for song or album titles or performer names facilitated infringement.  Google refused to remove the suggested keywords on the grounds that their provision was completely automatic and that the users could have found the infringing sites (not all of whose content is infringing in any event) without the keywords, and therefore their suppression would not completely eliminate infringement.  The court of appeals adopted Google’s reasoning.  In reversing, the High Court held:

Google systematically oriented its users, through the provision of key words that it suggested based on the number of requests, toward sites containing recordings made available to the public without the authorization of the recording artists or producers, in such a way that Google provided the means to violate copyright or performers’ rights.   By complying with the the measures that the plaintiffs requested to avoid or bring an end to those violations by eliminating the automatic association of the key words with the requested search terms, Google could have contributed to remedying the infringements by making the finding of infringing sites more difficult, even though such measures would not totally have eliminated the violations.

The “systematic” orientation of users toward predominantly infringing sites, even if achieved through an “automatic” algorithm, thus implicated Google too closely in the infringements that its suggested keywords facilitated.  In declining to equate “automated” with “neutral,” the French High Court determined that its “suggestions” made Google an active partner in the ensuing infringements and thus deprived it of the requisite neutrality.

In sum, until the Court of Justice for the European Union rules, take down/stay down may no longer be a judicially imposed remedy in France (though the same result may be achieved by contract), but we have not seen the last of court-ordered pro-active measures to prevent infringement, at least when those measures remedy service provider conduct that courts deem insufficiently neutral with respect to infringing content that the services reference or store.