Online copyright jurisdiction in the EU: Is dematerialisation the answer?

By Mark Owen (with grateful thanks to Adam Rendle and Dominik Thompson, respectively of Taylor Wessing’s London and Vienna offices)

A thorny issue which courts around the world have grappled with over the last decade has been the question of Courts’ jurisdiction over online activities, including IP infringements.  These problems have been magnified within the EU where there is free movement of goods and services between different Member States but the laws and enforcement mechanisms differ to some extent from one Member State to another.

When infringing content is made available to users within the EU, which country’s law should apply to that infringement?  The EU Jurisdiction Regulation (44/2001) allows the rights-owner to sue where the infringer is domiciled or where the harmful event occurs.  Recent cases have debated how one determines “where” the harmful event occurs. The most recent contribution to the debate, an Advocate General’s opinion in the Pez Hejduk case (Case C-441/13), suggests that previous approaches have been wrong and the answer in fact lies in the concept of “dematerialisation”.

The Pinckney test

As the most recent decision of the EU Court of Justice on the topic, Pinckney (Case C-170/12) was thought to be the last word on the subject. In that case the CJEU considered which country had jurisdiction when a copyright infringing CD made by a company in Austria was sold by UK companies on a website accessible in France. Could the copyright owner sue the Austrian company in France?  The CJEU said it could: the harmful event may occur in a jurisdiction where it is possible to obtain a reproduction of the copyright work from a website accessible in that jurisdiction. It was up to the local court to decide if there had been infringement there, though it could only rule on damage suffered in France.

Pinckney was regarded as a generous finding for rights-owners as it made it relatively straightforward to establish jurisdiction in any Member State when the alleged copyright infringement took place on or through a generally accessible website.

The background facts

Ms Hedjuk is a professional photographer who specialises in architectural photography and lives in Austria. During her career, she created several photographic works about buildings by the Austrian architect Georg W. Reinberg. In 2004, Mr Reinberg publicly displayed some of these photographic works when giving a lecture at an event organized by EnergieAgentur.NRW GmbH, a German energy think tank. Later on, EnergieAgentur published the same photographs on their own website, which had a German top level domain (.de). While Ms Hejduk had given consent to the use of these photographic works at the lecture, she did not consent to their publication on the Internet.

Ms Hedjuk brought an action against EnergieAgentur.NRW at the Commercial Court of Vienna, seeking compensation. EnergieAgentur.NRW challenged the jurisdiction of the Austrian court, arguing that only a German court could hear the case. The case was referred to the CJEU.

The Advocate General’s Opinion

Advocate General Cruz Villalón (the “AG”) opined that Ms Hejduk must bring the action in Germany, because this is the place where the harmful event occurred. He distinguished online publication of a photograph from the online sale of a physical product (as in Pinckney), saying online publication is fundamentally different because it usually will not be possible to say in which place or places damage done by it materialises. As a result, the damage, in the AG’s words, is “dematerialised”, has become diffuse and can be said to have “shifted” or become “delocalised”.

The AG disagreed with applying the Pinckney approach “automatically” because it was not always possible to determine the place(s) where the damage occurred.  In such a case of “delocalised” damage, the objectives of the Jurisdiction Regulation were best met by resorting to the place where the event occurred which gave rise to the damage. It would be very difficult for the claimant to produce evidence indicating the amount of damage which occurred in the single Member State where she brought the action and it would be unfair for a defendant potentially facing actions in a number of Member States.

Likely impact

The AG’s opinion, if followed by the CJEU, would reduce claimants’ choice as to where to sue for online copyright infringement, compared to the position following Pinckney. If suing in the Member State where the infringer is located is not attractive, claimants would have to go to the source of the infringement. In most cases, these places will be the same, but not always.

In an earlier CJEU ruling on the location of online infringement of the making available right in the database context, it was held that the right is infringed at least in the Member State where the communication is targeted. As the AG did not find such a targeting in this case, he did not consider this question. The opinion may therefore need to be confined to its facts, applying only to circumstances where damage is “delocalised” – the AG himself said that his solution may be distinguished further. It remains to be seen what the CJEU will make of this.