Dutch Supreme Court: Usenet service provider can rely on hosting exception

On 27 January 2023, the Dutch Supreme Court issued a ruling regarding copyright infringement by a platform for Usenet services. The Dutch Supreme Court provided clarity about the application of the hosting exception of Article 6:196c(4) of the Dutch Civil Code (“DCC”), or, in other words, under which circumstances a platform operator can or cannot invoke the hosting exception. This judgment also elaborates on a claimed order for future resumption of hosting activities.

Proceedings in first instance

The case concerns, on the one hand, Stichting Brein (“Brein”), which acts as representative for owners of intellectual property rights, and on the other hand News-Service Europe B.V. (“NSE”), a worldwide platform operator for Usenet services. A large number of providers supports the Usenet platform.

Brein claimed declaratory decisions stating that NSE was directly liable for infringement of copyrights and  neighbouring rights, by, without permission of the rights holders, documenting (reproductions of) copyright protected works on servers and providing them to third parties. Additionally, Brein claimed an order for NSE to cease and not resume this infringement.

In first instance, the District Court granted the declaratory decisions, because, according to the District Court, NSE infringed copyrights by reproducing the works. NSE tried to invoke Article 13a of the Dutch Copyright Act (“DCA”), which contains an exception for providing services for the technical transmission of information, but the District Court did not follow this argumentation. Even though NSE did not provide an act of communication, NSE still acted illegally and the District Court granted an injunction.

Appeal proceedings

On appeal, NSE tried to invoke the mere conduit and hosting exceptions as laid down in Article 6:196c(1) and (4) DCC. The Court of Appeal ruled that this exception only applies to the transmission of user messages to other Usenet providers by NSE, because this act is considered solely technical, automatic and passive. As NSE did not take the initiative to transfer the information, did not decide who the receiver of the information was, and did not select or change the transferred information, NSE was able to successfully invoke the mere conduit exception of Article 6:196c(1) DCC.

The hosting exception (Article 6:196c(4) DCC) could be applicable to NSE’s acts as to saving messages during the retention period, which included the provision of the messages to the platform users. On this point, the Court of Appeal ruled that NSE can successfully invoke the hosting exception, as NSE’s services were solely technical, automatic, and passive. Brein did not prove that NSE knew that specific content was illegal, as required by Article 6:196c(4)(a) DCC. NSE also fulfilled the criterion of Article 6:196c(4)(b) DCC, because it promptly took down the messages as soon as NSE was acquainted with the illegal character of specific activities or information.

With respect to the claim to cease and not resume any alleged infringing acts, the Court of Appeal decided that this order breaches Article 15 of the Directive on Electronic Commerce (‘No general obligation to monitor’). NSE stated that they can only comply with the order when they filter all received information on the presence of infringing materials, which in fact is monitoring all information.

The Court of Appeal furthermore explained that a party invoking Article 6:196c DCC is not responsible as committer of a wrongful act, solely by facilitating infringements by others. However, the Court of Appeal did not elaborate on the question whether NSE performed an act of communication to the public by which it reproduced the works (as described in Article 13 DCA), and thus could be directly liable for copyright infringement. And that is where the Supreme Court steps in.

Dutch Supreme Court, YouTube and Cyando cases

The Supreme Court asked prejudicial questions about the relationship between the act of communication (laid down in Article 3(1) of the Copyright Directive[1]) and the hosting exception (laid down in the Directive on Electronic Commerce[2]). However, the Court of Justice of the EU (“CJEU”) already provided clarity on this point in the YouTube and Cyando decisions.[3] Therefore, the Supreme Court withdrew its prejudicial questions and handled the matter itself.

Based on the YouTube and Cyando decisions, a platform operator cannot invoke the hosting exception when performing an act of communication of protected works or content. The CJEU also provides for points of reference as per when a platform operator performs such an act of communication, and thus cannot successfully invoke the hosting exception.

In principle, when operators of video sharing platforms or host-and-share platforms solely offer the platform and do not deliberately intervene in order to give users access to a protected work, operators do not perform acts of communication. In this respect, a ‘deliberate’ intervention by a platform means that it intervenes with full knowledge of the consequences of its act.

According to the CJEU, platforms intervene deliberately in the following situations:

• When the operator knows that specific protected content is published illegally on his platform and does not promptly delete this content or make it inaccessible promptly; or
• When the operator, even though he knows or should know that protected content in general is published illegally on his platform by platform users, does not provide for appropriate technical measures that can be expected from a normal, cautious market operator in his situation to combat copyright infringement on his platform in a credible, effective way; or
• When the operator takes part in selecting protected content shared illegally; or
• When the operator provides for assisting equipment on his platform specifically intended to illegally share protected content; or
• When the operator consciously incentivizes illegal sharing of protected content, an example of which is a business model intended to incite users of the platform to illegally share protected content and thus provides notice to the public by an act of communication.

   

From these points of view, we can derive that the operator should play a neutral role and thus perform solely technical, automatic and passive acts. The operator cannot play an active role allowing him to gain knowledge about or have control over the content uploaded on his platform.

Ruling of the Supreme Court in Brein/NSE

Applying this framework, the Supreme Court ruled that NSE’s hosting services cannot be considered an act of communication:

• First of all, the Supreme Court considers NSE’s services to be solely technical, automatic and passive. The arguments that Brein provided (circumstances such as retention period, the use of a spam filter, and the offering of a search function) do not imply that NSE had knowledge of or control over the messages saved by users. NSE saved messages by request of third parties only, did not take part in selecting the protected content, did not provide for assisting equipment on his platform specifically intended to illegally share protected content, and it was not proven that NSE purposely incentivized the publication and sharing of protected content;
• Secondly, Brein did not prove that NSE had knowledge of specific activities or information with an illegal character;
• Thirdly, the Supreme Court found that NSE acted promptly as soon as NSE was acquainted with the illegal character, because of the notice-and-takedown procedure it used. In addition, NSE used a Fast Track-procedure, which even allowed users to takedown message without interference from NSE.

The Supreme Court therefore concluded that NSE did not contribute to illegal sharing of protected materials, and therefore did not intervene deliberately in order to provide users access to protected works.

Conclusion

This judgment applied European (case) law, provided for in the Copyright Directive, the Directive on Electronic Commerce and the YouTube and Cyando cases, to the Dutch equivalent of the hosting exception. Insofar as there were any doubts, it is clear now that a platform operator that is not performing an act of communication can successfully invoke the hosting exception of Article 6:196c(4) DCC. In addition, the Dutch Supreme Court has given guidance on when a platform operator hosting a video sharing platform or a host-and-share platform performs an act of communication under Dutch law.