Liability for damages of the file-hosting service

Can a file-hosting service provider, which essentially provides storage space, be held liable for damages for copyright infringement by users of its service? The Regional Court (LG) Munich has expressed itself on this matter.

A film distribution company and exclusive licensee of the film in dispute sued the file-hosting service provider, inter alia, for damages on the grounds that the film was available for download on its file-hosting service without authorization for an extended period of time.

Users were able to upload arbitrary files to the website of the file-hosting service provider, which were saved on its servers. Following the upload, the user was provided with a download link, which the user could post in link collections, so that it was possible to search in the link collections for specific files stored on the servers of the file-hosting service provider and to download them. The file-hosting service provider provided premium accounts and an affiliate programme, whereby registration required only the provision of an e-mail address.

Immediately upon discovery, the licensee objected to the unauthorized use of its film and made precise statements to the file-hosting service provider regarding the specific links and the specific locations in the relevant link collections. However, the film remained available for download. Additional unauthorized copies even appeared by means of new download links.

The licensee demanded damages on the grounds that the file-hosting service provider had failed to take appropriate measures to ensure that the film would no longer be available for download in the future.

The file-hosting service provider argued that it did not obtain knowledge of infringing content either at the time of the upload or during the ongoing publication of the links.

Decision of the Court

The Regional Court (LG) Munich decided in its judgment of 11.07.2014; Az. 21 O 8154/13 against the file-hosting service provider.

It had obtained knowledge of infringing content on the basis of corresponding concrete notifications from the licensee.

From the point of knowledge onwards, it had been obligated as a result of the doctrine of secondary liability (Störerhaftung) incumbent upon it to delete infringing content and to monitor the link collections for new infringing links. Instead, it had repeatedly and over an extended period persistently violated its deletion and monitoring obligations. The court also took into account the fact that the file-hosting service provider had created special incentives for the illegal public making available of copyrighted infringing files through its premium account and its affiliate programme. Furthermore, the service of the file-hosting service provider was characterized by systematic anonymity.

The court therefore assumed that the file-hosting service provider had become an accomplice to the user committing the copyright infringement and was thus liable for compensation for the damage incurred.

Conclusion

The case law on secondary liability (Störerhaftung) is directed at the principle that the secondary liable party/file-hosting service provider must refrain from committing legal violations. From the point of knowledge onwards, it is subject to deletion and monitoring obligations.

The Regional Court (LG) Munich has extended the doctrine of secondary liability (Störerhaftung) in this case to liability for damages. The special circumstances of the specific case must be taken into account. In particular, the file-hosting service provider persistently violated, over an extended period of approximately 3 weeks, the deletion and monitoring obligations incumbent upon it despite precise knowledge of the infringing content and link collections.