"Copyright owners better off in a regime that allows downloading from illegal sources"

This striking headline comes from a note received from Vivien Rörsch (De Brauw), on two recent and equally striking Dutch decisions handed down last week by the Court of Appeal of The Hague: in the two separate cases the court ruled that, since downloading from illegal sources for private use was permitted under Dutch law, this was to the copyright owner's advantage. Viven explains this paradoxical position as follows:

"In ACI et al. v Stichting de Thuiskopie the question was how the Dutch private copy levy (the “thuiskopievergoeding”) on blank CDs and DVDs should be calculated. Contrary to the decision of the District Court, the Court of Appeal ruled that downloading from illegal sources is permitted and should therefore be taken into account when determining the level of the levy: that should also compensate for loss of income due to downloading from illegal sources.

The Court of Appeal stated that the private copying exemption in the Dutch Copyright Act does not differentiate between copies made from legal or illegal sources. With reference to statements made by the Minister of Justice, the Court argued that the legitimate interest of the right holders is more adequately protected in a regime that allows downloading from illegal sources. In view of the Dutch government’s statements, such a levy system better ensures that compensation is due to right holders for the use of their work. Thus, interpreting the Dutch Copyright Act in light of the three-step test of Article 5(5) of the Copyright Directive that could limit the Dutch private copying exemption would be contra legem, according to the Court.

This decision provides strong support for expanding the existing levy system that currently does not impose levies on equipment most used for downloading, such as MP3 players, USB sticks, smart phones and other hardware devices.

The same Court also ruled on the appeal against a judgment in preliminary proceedings in FTD v. Eyeworks. In this case Eyeworks filed an ex parte injunction against FTD that provides a service through which users can report and find content on Usenet. Contrary to the decision of the preliminary relief judge, the Court of Appeal held that FTD does not infringing copyright and therefore annulled the ex parte injunction. Also here the Court considered that in the Netherlands downloading for private use, even from an illegal source, is legal. It then decided that offering a site that facilitates downloading of copyright content does not constitute a copyright infringement. This makes the judgment remarkable in that it is inconsistent with decisions in other European countries.

Nevertheless, this ruling does not create a safe haven for parties facilitating copyright infringements. The Court of Appeal also ruled that FTD committed a tort by structurally, systematically and deliberately maintaining an application that encourages an activity (unauthorised uploading of copyright content) while FTD knew, or reasonably should know, that this constitutes copyright infringement and causes (serious) harm to the rights holder while FTD itself profits from that activity. The Court issued an injunction against FTD.

Whether this decision is correct under European law is questionable, especially in light of the Copyright Directive and the Directive on the Enforcement of Intellectual Property Rights".

An earlier note on The 1709 Blog on FTD v Eyeworks, in the context of preliminary proceedings, can be read here. See also the decision of Mr Justice Kitchin in Twentieth Century Fox v Newzbin here.