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European judges make it easier to exploit materials online

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Hamburg Partner Philipp Plog was recently interviewed by Germany's leading economic daily, the Frankfurter Allgemeine Zeitung on European Court decisions surrounding 'framing' and 'embedding' of...

Hamburg Partner Philipp Plog was recently interviewed by Germany's leading economic daily, the Frankfurter Allgemeine Zeitung on European Court decisions surrounding 'framing' and 'embedding' of third party content (including the recent "Bestwater" case).

The following article was first featured in Frankfurter Allgemeine Zeitung on 3 December 2014, p. 16.

European judges make it easier to exploit materials online

For some months, media operators had been waiting eagerly for the “Bestwater” decision of the European Court of Justice. Would the Luxembourg judges seize the opportunity and correct the stance which they had expressed in the highly criticized “Svensson” decision? The answer is: No. Thus, the decision in the “Bestwater” case will likely leave right holders and users in perplexity once again (F.A.Z. of 5 November; case no. C-348/13).

At the centre of the debate lies the question whether the so-called framing or embedding requires the consent of the right holder.  This concerns making visible contents on one`s website which were published on a third party website. With this technology, the third party's website virtually acts like a window to the original page.  Accordingly, the embedding party is not storing or – to use the term of copyright law – reproducing the contents. Frequently, however, it is not evident to the user that the contents are not contents owned by the website operator, but are merely embedded. Thus, the end provider may economically exploit the interest, e.g. with advertisements.

The European judges had already held in the "Svensson" case that it is irrelevant whether a link leads the user from the offer of the linking party to the target page – or whether the contents of the linked page are embedded (F.A.Z. of March 12; case no. C-466/12). As the original content had been published for all internet users, the linking did not reach any new audience. And as long as this was not the case, the copyright would not be infringed. In other words: anything that is generally available online may be used for one's own purposes as long as it is technically “embedded”.

The “Bestwater” case did not prompt the Court to rethink this case law – even though here, the embedded YouTube video itself constitutes an unlawful publication. Because the video clip had originally been published by Bestwater International, a manufacturer of water filters, on its own company web pages and later uploaded onto the video platform without its consent. The defendants – two distribution agents of a competitor of Bestwater – had then embedded this publication into their own websites and used it for advertising.

The consequences of the decision could be far-reaching. The right holder must accordingly limit access technically in order to be able to prevent embedding. As a result, they are thus forced to use paywalls and other barriers. This can hardly be reconciled with the basic idea of the internet. In addition, it conflicts with the basic principle of copyright law: accordingly, any commercial use of content always requires a licence of the right holder, even if the latter did not implement any technical safeguards.

The massive concerns of the Federal Court, which had referred the case to Luxembourg, are swept aside by the ECJ on just under three pages. The highest German civil court was motivated by concern about a reasonable compensation of the right holders. Thus, it pointed out that the linking party was saving money by embedding – as it did not have to provide any original work; this would require the consent of the right holder. This “central role in procuring the work” thus requires consent and compensation, according to the Federal Court.

The European judges considered these arguments just as irrelevant as the fact that the embedding party also shifts the costs of traffic to the source – while at the same time stripping it of possibilities of refinancing, as the related ads placed on the source page can no longer be seen. They seem to consider the internet as a medium rather than as a transmission technology. And accordingly, anything that is already available on the internet is also available for embedding by others without royalties. It remains to be seen how German courts will implement this decision.

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