Supreme Court ruling on Chomikuj.pl. What does this mean for service providers?

The Supreme Court has recently drafted a justification of the judgment in the famous case against Chomikuj.pl. What does this judgment mean for the service itself as well as other service providers? What can we learn about the obligations of service providers from the justification?

In May 2022 The Supreme Court issued a verdict in the case against Chomikuj.pl which has been pending for many years. The Polish Filmmakers Association, together with other plaintiffs, claimed compensation for infringement of property copyright in the films ‘Dzień Świra’ directed by Marek Koterski, ‘Katyń’ by Andrzej Wajda and ‘Venice’ directed and based on a screenplay by Jan Jakub Kolski. The plaintiffs demanded to block access to these videos once the platform had credible knowledge of the infringement. In the judgment, the Supreme Court held the service directly liable for copyright infringement. The ruling thus confirmed the earlier position of the Court of Appeal in Krakow.

A reminder of how Chomikuj.pl works

Probably most people have come across Chomikuj.pl whose activity consists in the mechanism that allows users place any files on the website and these files may be stored and made available to any number of people. As for files up to 1 MB, they can be downloaded by users without charge. For larger capacities, a user wishing to download a file must pay for it. In this case, he or she either has a paid account or has to send a text message. Thus, the video files that were the basis of the dispute were made available on the site on such a basis. The users who uploaded them there had no rights to them. The rightsholders demanded the removal of the files before the lawsuit was filed, but the service did not take action to counteract the copyright infringement.

What do service providers need to bear in mind?

First and foremost, service providers should bear in mind the Act on the Provision of Electronic Services, which was cited by the Supreme Court in the justification of the judgment, and which was an implementation of Directive 2000/31/EC. According to the Act, the service provider will not be held liable for information stored in the system at the request of the service recipient if it does not know of its unlawful nature and, if it receives reliable knowledge of this fact, will prevent access to this information. The knowledge of the service provider as to the unlawful nature of the information is therefore crucial. If it has knowledge, it cannot then invoke a disclaimer. However, under the Directive, service providers do not have a general duty to monitor content or a general duty to look for facts and circumstances indicating that the information is unlawful.

In its reasoning, the Supreme Court also referred to a number of CJEU rulings, including the judgment in YouTube and Cyando (C-682/18), where the CJEU indicated that a platform operator makes a “public communication” of content in breach of copyright, for example (1) when operator has credible knowledge of unlawful infringement and does not promptly remove or block that content; (2) when operator knows or ought to know of numerous infringements by users and thus fails to implement appropriate technical solutions to counter the infringements; (3) when operator participates in the selection of content that is then unlawfully made available; or (4) when operator provides the tools that enable such unlawful making available (adopting, for example, a business model that encourages it).

Accordingly, it is sufficient that the rights holder informs the service provider of the infringement, and at that point certain legal obligations arise on the part of the service provider to remove the content or block access to it and to take measures to prevent further infringements.

The Supreme Court has also taken the view that the mere profit-making nature of a service provider’s activity does not justify claims about the intentional nature of its involvement in the unlawful provision of protected content.

How does this relate to Chomikuj.pl?

In the judgment, the Supreme Court agreed with the plaintiffs indicating that they informed the portal about the infringement of their author’s economic rights while Chomikuj.pl did not take any actions to prevent further rights’ infringements even when technical means to eliminate them existed. The Supreme Court also pointed out that the very manner of the service’s operation consists in the fact that the service itself engages in and participates in making files available, including unlawful ones – as in the case of transfers exceeding 1MB, it is the service which decides about uploading the file. First the user who wants to download the file pays a fee and only then can the file be downloaded. Thus, such a person has to conclude an agreement with Chomikuj.pl and the portal undertakes to provide access and to allow making of copies in exchange for remuneration.

Liability of indirect infringers

In the course of its deliberations, the Supreme Court referred to Article 79 of the Act on Copyright and Related Rights, clarifying the issue of liability for damage and thus prejudging the application of the provision not only to the direct infringer but also to ‘indirect infringers’. It is extremely important that in this judgment the Supreme Court qualified the activity of ‘Chomikuj.pl’ not only as aiding and abetting in infringement of author’s economic rights (an aiding and abetting person is the one who did not prevent the act causing damage despite the obligation to do so), but as direct co-perpetration. The Supreme Court justified this on the grounds that the portal knew about the infringement of the plaintiffs’ copyrights and nevertheless concluded agreements with persons who wanted to illegally download a file for remuneration. In addition, it pointed out the admissibility of a preventive claim against service providers under Article 439 of the Civil Code, which is aimed at preventing future damage, i.e. when the damage has not yet occurred but is highly likely to occur. The Supreme Court indicated that it was also possible to invoke this provision in this case, as the portal did not take any action to prevent further infringements during the period of the proceedings, which confirms the real threat of infringement of these rights in the future.

How will the ruling affect the activities of similar services?

The Supreme Court ruling confirms that if a copyright holder notifies a service provider of an infringement, the service provider is not only obliged to immediately remove the content or block access to it, but also to take appropriate measures to prevent further infringements. Consequently, liability for copyright infringement will be incurred not only by the user who makes the content illegally available, but also by the owner of the service where the content was made available. Only the fulfilment of the obligations stipulated by law allows service providers to invoke the exemptions of Article 14 of the Electronic Services Act.

Sources:
Supreme Court judgment of 27th May 2022, ref: II CSKP 3/22.