Tuesday, 22 October 2013

Pinckney – the CJEU wields a broad brush

The CJEU’s decision in Pinckney does not improve with closer acquaintance.  Any judgment that sets up the accessibility of a website as a basis on which to assume jurisdiction will ring alarm bells among internet actors, the more so when the defendant did not itself operate the website in question.  Pinckney is also questionable from a more traditional intellectual property and jurisdiction perspective.

The facts of Pinckney assumed by the CJEU were that the Austrian defendant Mediatech pressed a batch of CDs at its plant in Austria. Mediatech did this at the request of a United Kingdom company which marketed them through an internet site. There was no suggestion that Mediatech organised the distribution of the CDs by the UK companies who sold them on their websites or that it had any connection with them whatsoever.  To adopt a publishing analogy, Mediatech were the printer but not the publisher.
Peter Pinckney, the plaintiff, claimed that the CDs were unauthorised and infringed his copyright.  He was able to purchase the CDs at his residence in France from the UK internet sites, which were accessible to the French public.  He commenced proceedings against Mediatech in his local French court. 
Mediatech challenged jurisdiction.  Under Article 5(3) of the Brussels Regulation the French court has jurisdiction if it is a court of the place where the harmful event occurred.  EU caselaw has established that that includes both the place where the damage occurred and the place of the event giving rise to it. 
The CJEU allowed the French court to take jurisdiction on the basis that the harm in France was the availability in France of the UK websites from which the CDs could be purchased.  Its jurisdiction was limited to determining the damage caused in France.  
This result is open to the objection that the claim was against Mediatech, not the UK websites, and that by reproducing CDs in Austria Mediatech had caused no damage in France. Alternatively even if Mediatech's acts of reproduction in Austria could be regarded as indirectly causing damage in France, that should not be sufficient.  Long established EU jurisprudence (Dumez, Marinari) holds that a court taking jurisdiction on the basis of the place of the damage caused by the alleged wrong can do so only on the basis of direct, not indirect, damage. Only if the damage in France could be regarded as directly caused by Mediatech's reproduction of the CDs in in Austria should jurisdiction over Mediatech be available to the French court under Article 5(3).
The CJEU achieved its result in Pinckney by:
(1)   treating the various distinct ways of infringing copyright as if they were a single universal wrong;
(2) glossing over the implications of copyright territoriality;
(3) separating abstract damage from infringement;
(4) thus rendering itself incapable of considering:
(a) whether the damage relied upon was caused by the specific infringement alleged against the defendant and, if so
(b) whether the damage was direct or indirect in relation to the acts of the defendant.
A single universal wrong
Advocate General Raaskinen, whose Opinion the Court did not follow, focused on the fact that it was not clear from the French Cour de Cassation’s reference what substantive infringement claim Pinckney was making in the French courts against Mediatech, and thus what relevance the questions asked of the CJEU might have to the Cour de Cassation’s decision.
The AG’s perplexity is understandable.  By international treaty if copyright exists in one country then corresponding copyrights automatically come into existence in almost all other countries.  However each is still a separate territorial right.  National copyrights may differ in scope from one country to another, even within the EU where copyright has to an extent been harmonised.  
Each national copyright is also itself a bundle of separate rights, governing different activities such as copying, distribution and communication to the public.  In a cross border setting it is therefore dangerous to speak of ‘infringement of copyright’ in a universal sense.  It is more accurate to speak of infringement of the UK distribution right, the French reproduction right and so on.
According to the CJEU, however, no enquiry into the nature of the infringement is necessary once the condition is satisfied that the Member State in which the court is situated protects the copyrights relied on by the plaintiff.  (The Court assumed that that would automatically be the case). The enquiry then moves to the existence of damage within the jurisdiction of the court seised.
Glossing over territoriality
On the facts assumed by the CJEU, Mediatech's allegedly wrongful act was unauthorised reproduction in Austria.  Therefore if Mediatech infringed by copying it can only have infringed the Austrian reproduction right, not the French reproduction right.  While the French distribution right may have been infringed by the sale of CDs into France, that was from UK websites with whom, the CJEU stated, there was no evidence that Mediatech had any connection.
The Advocate General wanted, if the reference was declared admissible, to align the place of the damage more closely with the territoriality of the substantive right.  So the damage for infringement of the reproduction right would occur at the place of reproduction; the damage caused by infringement of the making available right would depend on targeting (as does infringement of the right itself), and so on.
The Court, however, rejected such niceties.  It was sufficient, in order to found the French court’s jurisdiction over a copyright claim against Mediatech, that CDs pressed by Mediatech in Austria were available in France from UK websites.  That constituted the necessary damage in France.  There was no need to consider the nature of the copyright claim against Mediatech.  Indeed it positively should not be considered.
Separating damage from infringement
There is a view that for intellectual property rights there is no distinction under Article 5(3) between the act of infringement and the damage caused by the infringement.  According to that view it would follow that, given the territorial nature of copyright, the only damage caused by an unauthorised act of reproduction in Austria could be in Austria. 
The Court's approach implicitly rejected this view.  The Court appears to have held not only that damage can in some unspecified way be regarded as separate from the infringement, but that damage resulting from a subsequent act of distribution by a UK third party from a UK website into France is sufficient to found jurisdiction in France against the Austrian copier.
The Court said:
“39 ... it is true that copyright … is subject to the principle of territoriality. However, copyrights must be automatically protected… in all Member States, so that they may be infringed in each one in accordance with the applicable substantive law.
40 … the issue as to whether the conditions under which a right protected in the Member State in which the court seised is situated may be regarded as having been infringed and whether that infringement may be attributed to the defendant falls within the scope of the examination of the substance of the action by the court having jurisdiction (see, to that effect, Wintersteiger, paragraph 26).
41      At the stage of examining the jurisdiction of a court to adjudicate on damage caused, the identification of the place where the harmful event giving rise to that damage occurred for the purposes of Article 5(3) of the Regulation cannot depend on criteria which are specific to the examination of the substance and which do not appear in that provision. Article 5(3) lays down, as the sole condition, that a harmful event has occurred or may occur. …”
43      It follows that, as regards the alleged infringement of a copyright, jurisdiction to hear an action in tort, delict or quasi-delict is already established in favour of the court seised if the Member State in which that court is situated protects the copyrights relied on by the plaintiff and that the harmful event alleged may occur within the jurisdiction of the court seised.
44      In circumstances such as those at issue in the main proceedings that likelihood arises, in particular, from the possibility of obtaining a reproduction of the work to which the rights relied on by the defendant pertain from an internet site accessible within the jurisdiction of the court seised.”
  And in the operative part the Court held that:
“Article 5(3) … must be interpreted as meaning that, in the event of alleged infringement of copyrights protected by the Member State of the court seised, 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 and which has, in the latter State, reproduced that work on a material support which is subsequently sold by companies established in a third Member State through an internet site also accessible with the jurisdiction of the court seised. That court has jurisdiction only to determine the damage caused in the Member State within which it is situated.”
So although the operative part of the judgment referred to the specific case of reproduction in the defendant’s own Member State, the supporting reasoning was that the nature of the alleged copyright infringement was irrelevant for Article 5(3) purposes. 
Causation and directness of damage
In Dumez and Marinari the CJEU established that only direct, not indirect, damage can be relied upon as the basis for jurisdiction under Article 5(3).  It is difficult to see how the directness or indirectness of the damage relied upon can be assessed unless the wrong alleged against the defendant is properly identified.  Only then can the degree of connection of the damage with the wrong be evaluated. 
While there may be merit in treating Article 5(3) as a uniform self-standing rule, that should not mean treating damage as an entirely abstract concept, unrelated to the nature of the wrongful act of the defendant that allegedly gives rise to it. 
The operative part of Pinckney mentions 'the damage caused'. But it does not in terms state which wrongful act is said to have caused the jurisdictionally relevant damage.  It was apparently sufficient for causation and directness of damage that Mediatech had reproduced CDs in Austria and that some of those CDs had turned up on a UK website accessible in France.
Similarly the excerpts from the reasoning quoted above make no mention of any need for a direct causal link between the wrongful act by the defendant (not someone else’s wrongful act) and the damage relied upon. 
Elsewhere in the judgment the Court mentioned, but did not discuss: “the damage resulting from an alleged copyright infringement” (para 30, emphasis added). 
Nowhere did the Court address the Dumez and Marinari requirement for damage under Article 5(3) to be direct. 
These omissions are perhaps inevitable, given the Court's refusal in its reasoning to focus on the nature of the substantive infringement alleged against the defendant.
On the facts of Pinckney, it appears strongly arguable that the damage alleged in France was at best indirect as against an Austrian defendant who pressed CDs in Austria, who thereby infringed (if anything) Austrian copyright, and against whom according to the CJEU there was no evidence of connection with the UK distributing websites. 
It might be said against this that in Shevill, a defamation case brought against a newspaper publisher, the damage was held to occur in any country in which the publication was distributed and where the plaintiff had a reputation.  The ECJ was not concerned to enquire as to the length of the distribution chain that led to copies circulating in the UK through independent distributors. 
However Shevill illustrates the difficulty.  Pinckney is as if Ms Shevill had sued not the publisher of the newspaper, Presse Alliance, but instead the printer.  While it may be reasonable to regard the publisher as causing direct damage in countries in which circulation occurs, can the same be said of the printer?  The approach of the CJEU in Pinckney, taking a generic approach to copyright infringement, precludes any such enquiry.
Court best able to determine the issues
The CJEU in Pinckney emphasised that the object of identifying the place of damage is to lead to the court best able to determine the issues (for instance on grounds of proximity and ease of taking evidence).  This holds true only if the alleged wrong is properly identified. The more remote the damage from the wrong, the less likely it is to be the case.  
Relevance of internet jurisdiction caselaw
The CJEU cited recent CJEU caselaw concerning the place of the harmful event where the allegations were of infringements committed via the internet and which might, as a result, produce their effects in numerous places (Wintersteiger, eDate/Martinez) (Pinckney, para 31). 
However the relevance of these cases is unclear.  In Pinckney, while the distribution of the CDs by third parties occurred online, the allegation against Mediatech was of reproduction at its pressing plant in Austria – an alleged infringement committed neither online nor in the country of the court asked to assume jurisdiction.
The CJEU’s refusal to regard as relevant to jurisdiction the exact nature of the infringement alleged against Mediatech appears to have led it to equate the effects of infringing online with those of physical reproduction, while avoiding any substantive comparison between the two.
This refusal is puzzling when, at the level of the nature of protection, the CJEU is content to adopt different meanings of Article 5(3) for, for instance, personality rights and trade marks (Wintersteiger, eDate/Martinez).
Effect on other decisions
Pinckney does not change previous decisions about the targeting condition for trade mark infringement (L'Oreal v eBay) or for making available to the public for copyright or database right (Sportradar).  Pinckney concerns jurisdiction criteria, whereas those decisions concerned the territorial scope of substantive rights. 
A historical footnote
The CJEU’s treatment of copyright infringement as a universal wrong rather than a bundle of discrete rights brings to mind the famously outspoken English 19th century barrister William Danckwerts KC, no respecter of judges, who sitting at the back of court one day heard Lord Alverstone say of the three prerogative writs that they were all “much the same thing”. 
Danckwerts could then be heard intoning:
Mandamus, a writ in the King’s name commanding a specified act to be done.  Quo warranto, a writ against a person or corporation that usurps a franchise.  Prohibition, a writ to forbid any court to proceed.  And the Lord Chief Justice of England thinks that all these remedies are much the same thing.  Oh Lord!”*
Oh Lord! indeed.  Even a broad brush should be wielded with precision. 

*This story is recounted in ‘The Oxford Book of Legal Anecdotes’ by Michael Gilbert, at p. 90.

3 comments:

  1. Thank you, Mr. Smith for this summary. This article precisely expresses what bothers me about the decision.

    You mention that "there is a view that for intellectual property rights there is no distinction under Article 5(3) between the act of infringement and the damage caused by the infringement." This is an interesting approach. Could you maybe write me some references to case law or literature, where I could read more?
    Thank you.

    Martin Sramek

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    1. Hi Martin, take a look at Fawcett and Torremans 'Intellectual Property and Private International Law' (OUP, 2nd ed) para 5.39 et sq, especially the discussion of Molnycke v Procter & Gamble at 5.46. A similar approach was taken for passing off in Mecklermedia (Fawcett and Torremans para 9.44). The approach is essentially that for infringement the damage is to the IP right itself, so that the location of the harmful event is necessarily the place of infringement.

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  2. and I think Annette Kur has also something on this in her commentary on CLIP;

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