Communicating to the public after VG Bild-Kunst and TuneIn

Author

Xuyang Zhu

Partner

London

VG Bild-Kunst

This is an important case both from:

A European copyright law perspective: it is the first case in which the CJEU specifically acknowledged the possibility of rightsholders limiting the "initial" public by contract, rather than by technical measures to restrict access (although it concluded the possibility is limited), and it is part of the 25 – and counting – CJEU cases on communication to the public. If a rightsholder can limit the initial public, it could be easier for them to argue that what a subsequent user (eg someone who posts a link) has done is to communicate their works to a new public.
A UK copyright law perspective: despite being decided after the end of the Brexit transition period. Although the judgment is not part of EU retained law, UK courts can still "have regard" to it and that is exactly what the Court of Appeal did in TuneIn. Lord Justice Arnold considered the case to be "highly persuasive". That assessment of the relevance of CJEU judgments is likely to be very relevant to future English cases.

Context

This was a dispute between a German visual arts copyright collecting society (VG Bild-Kunst) and a cultural digital library operator (SPK) that operates the Deutsche Digitale Bibliotek (DDB).

VG Bild-Kunst refused to enter into a licence agreement with SPK for DDB to use its catalogue works as thumbnails unless SPK agreed to undertake to implement effective technological measures to prevent third parties from embedding them on other websites. SPK brought proceedings in the German courts for a declaration that VG Bild-Kunst had to grant the licence without imposing any requirement for SPK to implement anti-framing technical measures.

The question answered by the CJEU

The question was whether the embedding of a work – which is freely accessible on a website with the consent of the rightsholder – constitutes a communication to the public where it occurs through circumvention of protection measures taken, or imposed on a licensee, by the rightsholder. This question was important to the parties because, if the answer was yes, then VG Bild-Kunst, as a collecting society, would be able to insist that SPK implement such measures.

It is well established that, where a rightsholder makes a work available online, it can limit the "initial" public to whom the work is communicated by implementing technical measures to restrict access to the work only to a limited subset of people (rather than all internet users at large). In this case the CJEU considered for the first time whether a rightsholder can limit the "initial" public not through implementing technical measures itself but by requiring a licensee to implement measures as a condition to the licence –ie by contract.

The answer the CJEU gave was 'yes'.

We explain the outcome and consequences of the judgment and then comment on its reasoning.

Outcome and consequences

The CJEU in VG Bild-Kunst found that the embedding – by means of the technique of framing in a third party website – of copyright protected works that are freely accessible to the public with the authorisation of the rightsholder on another website, where that embedding circumvents measures adopted or imposed by that rightsholder to protect from framing, constitutes a communication to the public.

The position in relation to linking and framing after VG Bild-Kunst is as follows:

Where a rightsholder gives prior, explicit and unqualified authorisation to the making available of their works on an authorised website – without making use of technological measures restricting access from other websites – that rightsholder may be regarded as having authorised the communication to all internet users using the same technical means (this was established in the Svensson case (C-466/12)).
If linking or framing makes it possible to circumvent any technical access restrictions (such as encryption, scrambling or implementation of a copy control mechanism) put in place on the authorised website, then the link is an intervention without which link-enabled users would not be able to access the work. The linking or framing therefore amounts to a communication to a new public and therefore to an infringing act.
Previously, these circumstances arose in the case law where a work was subsequently taken down from the authorised website and where it was available on the authorised website only to a restricted public. What this case demonstrates is another example, namely, when the rightsholder (VG Bild-Kunst) imposes on third parties (SPK) licence terms to implement anti-framing technical measures on the would-be authorised website (DDB). In this way, the CJEU recognises that the rightsholder does have a contractual mechanism through which they can define the scope of the initial public and when subsequent communications will be to a new public.

The case therefore largely follows established principles of CJEU case law. Although it acknowledges a means by which rightsholders can define the scope of the initial public by contract, this is limited only to the imposition of a requirement for licensees to apply technical measures to restrict access.

The reasoning of the case does, however, bring to the fore a number of principles relevant to the question of whether rightsholders should be able to restrict the initial public by contract more broadly, and whether a court (including in the UK) may find in a future case that they are able to do so.

The reasoning

In its reasoning, the CJEU appears to give weight to the outcome in GS Media (C‑160/15) that linking/framing to protected works which were made freely available on another website without the consent of the rightsholder can amount to a communication to the public. The decision in GS Media reflects the fact that there is no initial authorisation by the rightsholder in these circumstances. The CJEU's conclusion in the present case could have been justifiably reached by reference to Svensson and the concept of a "new public" alone. The fact that the CJEU also reasoned by reference to a decision where there was no authorisation by the rightsholder at all does, however, make sense. If a licensee's licence were conditioned on their putting in place technological measures (or indeed on other requirements imposed by the rightsholder), their failure to do so would render the licensee's initial making available of a work unauthorised and suggest that a subsequent transmission would require authorisation in the same manner as contemplated in GS Media.
In GS Media, the CJEU expressed a concern that individual users may not have means of knowing whether the rightsholder has authorised a particular initial transmission of a work. Similarly, in the present case, the CJEU notes that it may be difficult for users to ascertain whether the rightsholder intends to oppose the framing of their works. In the present case, the CJEU solves this problem – and its related concern to ensure legal certainty and the smooth functioning of the internet – by finding that the rightsholder cannot be allowed to limit its consent to an initial transmission other than by effective technological measures within the meaning of article 6(1) and (3) of Directive 2001/29. However, as an alternative, the concern could have been, but wasn't, addressed in the same way that it was in GS Media – namely, by reference to whether the person carrying out the linking or framing had a requisite degree of knowledge that the rightsholder intended to limit its consent to linking and framing.
The CJEU accepted that an approach where rightsholders are deemed – even if they have introduced measures to restrict framing – to have consented to any act of communication to the public for the benefit of all internet users would be incompatible with their exclusive and inexhaustible right to authorise or prohibit any communication to the public. In other words, rightsholders cannot be faced with the choice of tolerating unauthorised use of their work by a third party or surrendering the use of their work (sometimes by means of a licence agreement). However, the CJEU considered that the decision it had reached struck an adequate balance between the interest of rightsholders in the protection of their intellectual property on one hand and the fundamental rights of users and the public interest on the other.
As a result, the CJEU recognised that rightsholders can successfully limit the initial public to which their works are communicated by requiring their licensees to impose technical restrictions. However, the CJEU left it open whether it is only by those restrictions actually being implemented that this will be possible.

How did this reasoning influence the UK Court of Appeal's decision in Warner Music v TuneIn?

TuneIn

In the UK, the issue of whether rightsholders can restrict the initial public, to prevent subsequent acts of linking or framing to works made freely available online, using contract rather than technical measures, has been considered in Warner Music v TuneIn.

This case involved consideration of whether radio stream aggregator TuneIn committed infringing acts of communication to the public by providing access by means of hyperlinks to radio streams made freely available online. Some of these streams were licensed by the appropriate music rightsholders in the UK, some were licensed only outside the UK and some were not licensed at all.

Consideration of how contract may (or may not) be used to define the initial public pre-VG Bild Kunst

In the High Court the case was decided following established principles of CJEU case law. As a result, following the principles in Svensson, it was held that TuneIn did not infringe copyright in the music contained in radio streams by linking to streams that were licensed by the relevant music rightsholders in the UK and freely available online. The judge considered that this analysis would not change even if there were contractual clauses "buried" in the agreement by which the rightsholder consented to the initial making available of the streams online, in which the rightsholder purported not to consent to any linking.

This makes sense in view of the concern expressed by the CJEU in its case law (including VG Bild-Kunst) that users should not be in a position where they cannot ascertain whether rightsholders intend to oppose the framing of works made freely available with their consent.

The judgment did not address the question of whether any user-facing contractual language (for example in an RSS feed or website terms and conditions), which made clear that the rightsholder does not consent to linking or framing, could be effective in rendering any linking or framing a copyright infringing act.

Application of VG Bild-Kunst in the Court of Appeal

The point discussed above was not expressly re-visited in the Court of Appeal. However, the application of VG Bild-Kunst by Arnold LJ appears to leave open the possibility that contractual language that is apparent to the user could be effective in preventing linking and framing.

Specifically, Arnold LJ noted that the CJEU's decision that rightsholders can only define the initial public by applying, or imposing a requirement for licensees to apply, technical measures to restrict access arose in the context of a dispute over whether a rightsholder was entitled to impose such a contractual requirement. The decision should not be extrapolated beyond this context. Instead, Arnold LJ noted the observations of the CJEU in VG Bild-Kunst regarding the inexhaustible nature of the communication to the public right, and the fact that rightsholders cannot be faced with the choice of either tolerating unauthorised use of their work or surrendering the use of their work. He appeared to contemplate that circumstances might exist in which a rightsholder's public can be defined other than by technical measures and that, in any given case, an individualised assessment would be necessary.

The Court of Appeal's decision in TuneIn is also notable for its consideration of whether to depart from CJEU case law. The Court declined to depart from the CJEU's jurisprudence on communication to the public, and (on TuneIn's alternative case) from GS Media alone. We discuss the reasons given in more detail here.

Upcoming developments

We now impatiently await the 26th communication to the public decision – YouTube/Cyando (Case C-683/18) – in June 2021. The case will address whether YouTube carries out acts of communication to the public in relation to user generated content. Depending on the outcome, the case could have significant implications for UGC services operating in the EU and – on the basis that the case may, like VG Bild-Kunst, be considered "highly persuasive" – in the UK.