File-sharing ruling upheld on appeal

In November 2009 the Asker and Baerum District Court rendered its long-awaited ruling in the Telenor file-sharing case (for further details please see "Court refuses to grant injunction against ISP in illegal file-sharing case"). On 9th February 2010 the Borgarting Court of Appeal dismissed the appeal, however it gave other reasons for reaching the same conclusion as the lower court.

Background
The plaintiffs, a group comprising Norwegian record companies, film distributors and film producers, five US film studios and Norwegian performing rights society TONO, petitioned the Asker and Baerum District Court for a preliminary injunction against Norwegian internet service provider (ISP) Telenor Telecom Solutions. The plaintiffs asked the court to order Telenor to:

• Stop making available to the public via The Pirate Bay website works protected by copyright or neighbouring rights held by the plaintiffs.
• Stop contributing to the making of copies of such works via the same website.
• Take the necessary steps to prevent customers from gaining access to a number of The Pirate Bay internet addresses.

The plaintiffs based their claims on contributory infringement by the ISP. They contended that Telenor was contributing to both The Pirate Bay’s and its own customers’ infringement of copyrights. The district court, while finding that Telenor’s acts were not unlawful, held that although they were caught by the wording of the law, the legislature would not have intended for them to be. The court also noted that the rights holders must have the infringements stopped and that it was necessary to find a solution, but none had been found. As a result, the rights holders were left in a state of lawlessness.

Court of Appeal decision
The appeal court first noted the peculiarity of the fact that while the E-commerce Act expressly exempts ISPs from civil and criminal liability under the Copyright Act in their capacity as providers of transmission and access services, the E-commerce Act also expressly provides that this exemption should not prevent the competent courts and administrative bodies from demanding, on other legal grounds, that a service provider should discontinue a violation or prevent it. However, the appeal court also found that this provision did not in itself constitute such a legal ground for an injunction, and noted that Preamble 59 of the EU Copyright Directive expressly states that “the conditions and modalities relating to such injunctions should be left to the national laws of the Member States”.

The appeal court then applied the following test. If the specific exemption from liability under the Copyright Act had not been in place, then if Telenor’s position as an ISP had been caught by the Copyright Act’s provision on criminal penalties for contributory copyright infringements, the plaintiffs could have a claim against Telenor. The court found that this was not the case since Telenor’s “neutral and technical contribution are too far removed” to be deemed to be illegal and punishable acts, and that Telenor’s activities as a network supplier could not constitute a punishable contribution to the illegal up or downloading of copyrighted materials. The claim that the plaintiffs requested to have secured by an injunction was simply held to be unfounded in Norwegian law.

However, the appeal court went further and, similarly to the district court, stated that even if Telenor’s acts had been caught as a contribution, the fact that the file sharing facilitated by The Pirate Bay could be either legal or illegal, depending on users' choices, meant that Telenor, as the provider of a technical infrastructure, could not be deemed to be acting improperly, unjustifiably or reprehensibly. These criteria are used in a safeguard test to avoid catching cases that, although covered by the meaning of a provision or rule, the legislature could not reasonably have intended to catch.

The Court of Appeal then went on to include in its decision the following obiter dicta:

• The far-reaching consequences of the question of liability for ISPs go against a preliminary decision to secure a claim that is identical to the claim of the petition. 
• As Telenor was not liable for damages, the plaintiffs would have to seek damages from those who illegally carry out the file sharing. The increased losses caused by Telenor not being immediately ordered to block off The Pirate Bay do not constitute a reason for securing the right holders’ alleged claim against Telenor

Comment 

“Member States shall ensure that rightholders are in a position to apply for an injunction against intermediaries whose services are used by a third party to infringe a copyright or related right.”

This may soon change. The Ministry of Cultural Affairs is working on a bill to amend the Copyright Act, in particular to introduce more detailed provisions on the liability for contributing to illegal file sharing. It is hoped that Norway’s compliance with international obligations will also receive attention.

Lastly, it might have been better if the appeal court had not added its obiter dicta. The claim that was to be secured was the copyright owners’ right not to have their rights continuously or regularly infringed. It was not, or at least not primarily, their entitlement to compensation. In addition, the appeal court's dictum regarding the requested injunction not pre-empting with final effect the determination of the right in final proceedings goes beyond the mark. The requested blocking of access to The Pirate Bay is a fully reversible measure.