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Copyright Liability for Streaming Box Distributors: A Comparative EU-US Perspective

“Loaded” Kodi set-top boxes are back in the copyright news again this week. (If you’re wondering what Kodi boxes are, and what they have to do with copyrights, here’s a backgrounder.) The CJEU has decided BREIN v. Wullems, a case involving the rights of communication to the public and reproduction. The plaintiff, BREIN, is a Dutch trade association representing copyright holders including the film and recording industries. The defendant, Jack Wullems, built and sold a multimedia streaming device called the Filmspeler. Wullems loaded Filmspeler boxes with third-party add-ons to Kodi that enabled users to easily access websites streaming copyrighted programming without authorization from right holders. Wullems advertised the Filmspeler as providing free and easy access to copyrighted content.    

The primary question in the case was whether the sale of the Filmspeler was a “communication to the public” of the copyrighted works streamed illegally through the box. The court’s opinion opens with a description of the Filmspeler as “a device which acts as a medium between…a source of visual and/or sound data and...a television screen.” Some of that “data,” according to the court, was provided with authorization from copyright holders, and some wasn’t—making the Filmspeler a dual-use device.

To a reader of the CJEU’s opinion who is familiar with the US cases on copyright liability for device distributors, the description of the Filmspeler as a dual-use technology suggests that the appropriate doctrinal framework for legal analysis is that of secondary liability. The relevant US Supreme court cases are Sony v. Universal and MGM v. Grokster. In those cases, plaintiffs pursued claims of contributory and vicarious infringement against device distributors based on alleged acts of direct infringement by users.

That, however, is not how the CJEU approached the analysis of Wullems’s liability—a point of divergence between EU and US copyright law that makes for an interesting comparative analysis. (In a post on the case over at IPKat, Eleonora Rosati reminds readers that secondary liability has not been formally harmonized at the EU level and that not all EU Member States recognize it.) The CJEU approached the question of communication to the public as one of direct infringement, where the putatively infringing act was the sale of the Filmspeler to the public:

Must Article 3(1) of Directive 2001/29 be interpreted as meaning that there is “a communication to the public” within the meaning of that provision, when someone sells a product (multimedia player) in which he has installed add-ons containing hyperlinks to websites on which copyright-protected works, such as films, series and live broadcasts are made directly accessible, without the authorisation of the right holders?

The court answered this question in the affirmative, explaining that “’communication to the public’ must be interpreted broadly” in light of the objectives of the EU InfoSoc Directive. In reaching its conclusion, the court pointed out that Wullems did more than merely provide consumers with equipment—“physical facilities for enabling or making a communication”—which would not be considered “communication” within the meaning of the Directive.

Mr Wullems, with full knowledge of the consequences of his conduct, pre-installs onto the ‘filmspeler’ multimedia player that he markets add-ons that specifically enable purchasers to have access to protected works published—without the consent of the copyright holders of those works—on streaming websites and enable those purchasers to watch those works on their television screens…. That intervention enabling a direct link to be established between websites broadcasting counterfeit works and purchasers of the multimedia player, without which the purchasers would find it difficult to benefit from those protected works, is quite different from the mere provision of physical facilities.

The court went on to conclude that the communication in question was “to the public” as that requirement has been interpreted in previous CJEU case law.

Had this case been decided under US copyright law, Sony and Grokster would have guided the analysis. Under US law, the sale of a dual-use device cannot on its own give rise to liability, because, as the Supreme Court wrote in Grokster, Sony “absolves the equivocal conduct of selling an item with substantial lawful as well as unlawful uses, and limits liability to instances of more acute fault than the mere understanding that some of one’s products will be misused.” Clarifying what “more acute fault” could entail, the Supreme Court held in Grokster that “one who distributes a device with the object of promoting its use to infringe copyright, as shown by clear expression or other affirmative steps taken to foster infringement, is liable for the resulting acts of infringement by third parties.” With this rule, the Supreme Court imported patent law’s inducement theory of secondary liability into copyright law.

Under Sony and Grokster, the sale of the Filmspeler on its own would not give rise to liability. However, Wullems’s marketing efforts for the Filmspeler, which apparently highlighted access to infringing material as a selling point, would likely meet the Grokster standard for inducement to infringe. For there to be inducement liability, however, there must be an underlying direct infringement that the defendant’s conduct induced. The interesting question in this case is whose direct infringement Wullems can be said to have induced. The potential direct infringers in this case are the Filmspeler’s users and the operators of the websites to which the Filmspeler’s Kodi add-ons provided access. Arguably, the former are not infringers at all, and the latter were not induced by Wullems to infringe.

Are Filmspeler users direct infringers? The CJEU held in this case that a user’s reception of an infringing program stream violates the right of reproduction under the InfoSoc Directive. It’s not clear to me, however, that applying US law on the right of reproduction would yield the same result. For a temporary, buffer copy of a work to implicate the right of reproduction under US law, the copy must satisfy both embodiment and duration requirements. (See Cartoon Networks v. CSC Holdings.) I’m not sure whether Kodi’s streaming architecture creates sufficiently persistent copies of streamed programs to satisfy the duration requirement. That’s a technical and factual question that the CJEU’s decision doesn’t provide enough detail to answer.

Are the linked website operators direct infringers? The answer to this question under US law is almost surely yes. The unauthorized delivery of a copyrighted program stream infringes the right holder’s public performance right. (See ABC v. Aereo.) The problem here for BREIN under US law would be that Wullems didn’t really induce the site operators to infringe. They would be doing what they do with or without Wullems providing links to their sites through Kodi add-ons in the Filmspeler.

It could be, then, that inducement is the obvious but wrong secondary liability theory in this case—because the induced were most likely not infringers, and the infringers were most likely not induced. Good old-fashioned contributory infringement may be a better fit. If Wullems knew that copyrights in specific programs were being infringed by the site operators to which the Kodi add-ons linked—for example, if he advertised that specific copyrighted programs could be viewed using the Filmspeler—and if he materially assisted “pirate site” operators by building the Filmspeler to channel users to their sites, then he would be contributorily liable under US law for the site operators’ direct infringements.

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