Sunday, 25 January 2015

Latest score in the jurisdiction game: Internet 0, EU Court of Justice 2

The CJEU in Pez Hejduk (22 January 2015) has plumped for mere accessibility as the threshold for online copyright jurisdiction under Article 5(3) of the EU Jurisdiction Regulation.

Mere accessibility is problematic for the internet. Exposing a website to the jurisdiction (or a fortiori the laws) of any country from which it can be accessed is, David Post has argued, not a reasonable outcome. (Some, epitomised by the Gutnick-inspired English defamation cases, may consider it quite reasonable since anyone posting to the internet knows the worldwide reach of the medium).  From a broader perspective mere accessibility chills cross-border freedom of expression, encourages geo-blocking of websites and impedes the free flow of information across borders.  Pez Hejduk is another bad day for the internet.

The CJEU headed down this road in October 2013 with Pinckney, a copyright infringement case against a German CD pressing company. The litigation was brought in France on the basis that the CDs could be purchased in France from a UK website unconnected with the German company. That was said to amount to damage in France.

For a tort such as copyright infringement Article 5(3) allows the plaintiff to sue in the place of the damage.  Article 5(3) is an exception to the primary rule that proceedings have to be brought in an EU defendant’s home country. Article 5(3) is the kind of effects-based rule that, unless it is kept within bounds, has the potential to create jurisdictional overreach. 

That potential is magnified with the inherently cross-border nature of the internet.
In Pinckney the court agreed with the plaintiff that damage was shown by the ability to purchase the CDs in France. It was irrelevant what kind of copyright infringement (reproduction? distribution? making available to the public?) was alleged against the German pressing company. Copyright infringement was to be treated as a general concept. Harm could apparently be relied upon however remote might be the causal relationship between the actual infringement alleged (reproduction in Germany?) and the harm relied upon (availability of CDs in France via an unconnected UK website).

So like the smile on the Cheshire Cat, jurisdictional harm seemed to float free, decoupled from any specific territorial infringement alleged against the defendant. That was not a promising start for keeping damage-based jurisdiction on the internet within sensible bounds.

Pez Hedjuk concerned photographs published on a German .de website. The copyright owner sued in Austria.  Again the precise basis of the infringement allegations is not entirely clear from the CJEU judgment.  It seems likely that the claim was for making available to the public in Austria from the German website, thus infringing Austrian copyright.

In Pez Hejduk causation was less tenuous than in Pinckney.  The Court identified a specific causal event as giving rise to the alleged damage: “the activation of the process for the technical display of the photographs on that website”. Even so the CJEU could have gone on to find that, for the purpose of jurisdiction under Article 5(3), a website operator does not cause damage in Member States that it has not targeted.  But it did not do so.

The CJEU held that the mere fact that the .de website was accessible in Austria was sufficient to establish damage under Article 5(3), where (as would inevitably be the case) the photographs were protected by copyright in Austria as well as in Germany. There was no basis in Article 5(3) for limiting jurisdiction to cases where the German site had targeted Austria.

Article 5(3) is supposed to be a strictly limited special derogation from the general rule under the Regulation that a plaintiff must sue in the defendant’s Member State. But for the internet mere accessibility comes close to turning the exception into the rule. Unless the site or content is geo-blocked a plaintiff can, based on mere accessibility of the site, sue in parallel in any number of Member States (albeit limited in each case to damage caused within the Member State in which it sues).

The twin prongs of mere accessibility and Pinckney’s broad causation brush are a recipe for jurisdictional overreach.

The Pinckney approach is odd when one considers that a plaintiff relying on Article 5(3) can sue only for damage caused within that Member State. How can the existence or likelihood of relevant damage (a jurisdictional issue) be evaluated if no attention is paid to the causal link between the specific infringement alleged and the harm relied upon?

The unwillingness of the Court in both Pinckney and Pez Hejduk (in each case rejecting the recommendations of the Advocate General) to align Article 5(3) more closely with the scope of the substantive right by way of targeting is difficult to understand, given that it has already gone down the path of interpreting Article 5(3) differently for different rights:

“the meaning of [Article 5(3)] may vary according to the nature of the right allegedly infringed…” (para 29).

eDate/Martinez (defamation/privacy), Wintersteiger (trade mark) and Pinckney (copyright) are all examples of this.  The Court may be making an implicit distinction between the nature of the right (which it allows can affect the interpretation of Article 5(3)) and its substance (which cannot). Whether the two are separable is open to question. Can the nature of a right be characterised without regard to its substance? What is the basis for distinguishing between relevant and irrelevant aspects of a right?

The Court in Pez Hejduk also relied on the lack of mention of targeting in Article 5(3):

“It is clear from [Pinckney] that, unlike Article 15(1)(c) … Article 5(3) does not require, in particular, that the activity concerned be ‘directed to’ the Member State in which the court seised is situated ...”.

It is true that unlike Article 15(1)(c), Article 5(3) makes no mention of directing activities. But nor does it mention mere accessibility; nature of the right versus substance; centre of interests of the plaintiff (edate/Martinez); limitation of damage to that caused in the Member State; country of registration of the trade mark (Wintersteiger); or any of the other glosses that the CJEU has placed on Article 5(3).

Perhaps the most persuasive reason relied upon by the Court in Pez Hejduk is that the Member State court best placed to exercise jurisdiction is the one that will apply its own law:

“The courts of other Member States in principle retain jurisdiction, in the light of Article 5(3) … and the principle of territoriality, to rule on the damage to copyright or rights related to copyright caused in their respective Member States, given that they are best placed, first, to ascertain whether those rights guaranteed by the Member State concerned have in fact been infringed and, secondly, to determine the nature of the damage caused …”.

However where the claim is copyright infringement by the presence of content on a website the most likely basis of a cross border claim will be making available to the public. As a matter of substantive EU copyright law (applying Sportradar to copyright) there can be no infringement and so no damage caused by a tort if the site is not targeted to that Member State. That will be the same throughout the EU. In those circumstances it is hard to see what practical purpose is served by allowing mere accessibility rather than targeting to be the jurisdictional threshold.

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