Our legal system faces new and complex questions as our societies are digitised. A good example of this is digital copyright infringement. Downloading a film online is easy and may appear to be at no costs, but the action is as serious as street theft. That is why it is important that we combat online thefts as well as physical theft so that we do not get a skewed legal situation online.
NJORD focuses on the difficulties the digitisation poses to our judiciary and legislation. Hopefully, as a law firm, we can help establish a better legal situation and case law over time.
NEW FIGURES UNDERLINE THE SIGNIFICANT SOCIETAL PROBLEM
The latest figures from 2020 show that Danes' use of online streaming services has never been greater. However, although many Danes use legitimate services, the figures show that illegal content is still widely streamed and downloaded. Over the past 12 months, 12 per cent of Danes (about 560,000 people) have downloaded or streamed illegal content.
The number is roughly unchanged since 2018 (a 2 per cent increase in illegal streaming and downloads has been measured from 2019 to 2020). Especially series, films and the like are downloaded illegally, but also music, books, sporting events, etc. are illegally consumed online.
NJORD'S WORK AGAINST ILLEGAL FILE-SHARING
At NJORD, we are experts in the field of intellectual property rights. We assist both large and small film producers in protecting and defending their copyrights against copying and crime.
NJORD represents film rightsholders, including both film producer such as Zentropa, Voltage Pictures, Millennium Film, Highland Film Group and many others, and companies such as Digital Rights, Antipiracy, Mircom, Copyright Management Systems ltd and other European companies that collect and manage the copyrights of film companies.
Back in 2012, work began on limiting illegal file-sharing. In the early years, there were studies and probes among Danish and foreign film producers about how to contact subscribers where copyright infringements had been found at their IP address. Following the experiences from Germany, several rightsholders decided in 2014 to obtain information about subscribers through the courts and to communicate directly with the users of the IP addresses specified by the telecommunications companies where the illegal file-sharing was found. This was done by letter with the factual investigations, questions, and suggestions for resolution. The purpose of the letters was and is to investigate through dialogue the illegal activity found so that a solution can be found, and court proceedings can be avoided. However, some do not respond to the letters, which is why rightsholders have had to bring the cases before the courts. The Danish film producers agreed to this communication from 2016, and in 2017, the letters proved to have an effect on the number of copyright infringements – the numbers decreased.
In 2018, the European Court of Justice sent a clear signal – a subscriber also has a responsibility to provide information on what is her/his Wi-Fi is used for.
In recent years, several file-sharing cases have been brought before the Danish district courts, where the evidence in the individual cases has led to both lost and won cases.
In 2019, a handful of the district court's rulings were appealed to the Eastern High Court. In the spring of 2020, the High Court, therefore, ruled on three specific file-sharing cases. The High Court found that film producer held the copyrights and the right to take legal proceedings against the illegal downloads and file-sharing. However, the High Court did not find that the two licensing agreements governing the three films clearly demonstrated that the film producers had transferred the right to take legal proceedings against the illegal downloads to Copyright Management Systems ltd – thus, the High Court dismissed the cases without considering the subscriber's liability.
Together with the film producers and Copyright Management Systems ltd, which cooperate in litigating the cases on various films, we have since discussed how we should handle the Eastern High Court's ruling on the right to take legal proceedings in the three specific decisions. The conclusion was a decision whereby the respective film companies are ready to take their own action if necessary.
THE LATEST DEVELOPMENTS: THE FILM-PRODUCERS BECOME PARTIES TO THE PROCEEDINGS
Several film producers have decided that in several pending legal proceedings they wish to become parties to the proceedings during 2020 in support of the legal proceedings brought. This is done by a so-called third-party notice procedure in accordance with the rules of the Administration of Justice Act.
The film producers have partnered with Copyright Management Systems ltd to ensure that Copyright Management Systems ltd has the right in the Danish courts to enforce the intellectual property rights in their own name, in particular in the prosecution of copyright infringements. By intervening in the cases, the film producers wish to confirm the cooperation and that Copyright Management Systems ltd has the standing to bring actions in the cases.
The film producers hold the copyrights to the films, but they have licensed the rights to Copyright Management Systems ltd to privately prosecute infringements in Denmark. In exchange, the film producers receive a share of a reasonable fee paid to Copyright Management Systems ltd for the infringement of the rights of film producers.
Press coverage
In NJORD, our view is that we are open about our role in file-sharing cases. We are happy to provide relevant information and explain the cases to the press because we believe that this is an important societal issue that must be taken seriously and clarified for the benefit of the digital legal situation.
At the same time, we are strongly in favour of the principle that the parties to the case must litigate the case before the court and that it is then up to the courts to adjudicate. In these cases, where judgments have been handed down both ways, the courts are the right place to settle the legal issues.
As lawyers, we stand up for our clients, in this case, film producers and rightsholders, even if the headwinds can be severe. We choose to support and continue to work on these cases because we believe that film producers have the right to have their copyrights defended and protected.
The Copyright Act does not permit the sharing or downloading of copyrighted material without the consent of the film producer.
Popcorn Time, BitTorrent, uTorrent and others are all online services that offer films without the consent of rightsholders. Their existence is conditional on users sharing and downloading copyrighted material with each other.
If you are not sure if a site or service is legal, you can take a look at our guide:
NJORD represents several different film companies and producers, which is why the copyright infringements are about many different films.
There have been lawsuits about major Blockbuster films such as “Mechannic Ressurrection” and “London Has Fallen”, Zentropa productions such as “Department Q: A Conspiracy of Faith” and “Salvation”, as well as a small number of adult films.
NJORD represents both film producers and the companies Copyright Management Systems ltd and Mircom. Copyright Management Systems ltd and Mircom are companies that help film producers protect their rights. Thus, they safeguard the rights of several film producers, as this reduces the costs and time spent by the individual film producers. Therefore, it is often Mircom or Copyright Management Systems ltd that are named as the plaintiff in cases about illegal file-sharing.
Copyright Management Systems ltd and MIRCOM are European companies that assist, among other things, film producers in cases about copyright enforcement, including prosecuting illegal download, sharing, and distribution of films. They offer an opportunity for the film producers to work together combatting piracy.
The German company Maverickeye UG has developed and owns the software MaverickMonitor.
There is contact between the companies, but neither joint ownership nor management, just as the companies work independently of each other and cooperate with different film producers, distributors, and other customers.
On 8 April 2020, the Eastern High Court ruled on three appeals concerning file-sharing. In the three appeals, the High Court made concrete interpretations of the evidence submitted concerning licensing agreements between the rightsholders.
In the appeal cases BS-41550/2019-OLR and BS-39423/2019-OLR, the High Court interpreted a license agreement on general authorisation (referred to as "generic services") between Copyright Management Systems ltd and MIRCOM regarding the transfer of rights licensed by film producers to MIRCOM.
In appeal case BS-41559/2019-OLR, the High Court interpreted a licensing agreement between Copyright Management Systems ltd and film producer ME2 Productions, Inc regarding the rights to the film "Mechanic: Resurrection". The High Court notes that it is unclear whether Copyright Management Systems ltd “can bring the claim in its own name or whether, as the appellant claims, there is only an agreement on an authority to accept service of process on behalf of ME2 Production on behalf of the rightsholder."
The High Court made a specific interpretation of the agreement in which the court considered the original licensing agreement of the parties to the agreement, which the High Court noted was "subject to English law and must be interpreted accordingly."
Following an overall assessment, the Eastern High Court found that Copyright Management Systems ltd by the evidence provided, “had not demonstrated that it had the authority to bring this case in its own name."
Copyright Management Systems ltd asked the Appeals Permission Board for permission to appeal the Judgment of the Eastern High Court of 8 April 2020 in Case BS-41559/2019-OLR to the Supreme Court. The Appeals Permission Board ruled on 17 June 2020 that a leave of appeal could not be granted as the case did not concern fundamental legal principles.
These cases continue.
On 8 April 2020, the Eastern High Court handed down three concrete decisions in appeals concerning three different films. The High Court held that the film producers have copyright and the right to prosecute illegal downloading and file-sharing. However, the High Court did not find that two licensing agreements related to the three films had clearly conferred the right to prosecute to Copyright Management Systems ltd. The film producers and Copyright Management Systems ltd have discussed how the right to prosecute can be clarified in the cases and have concluded that the respective film companies are ready to intervene in the cases themselves, to the extent necessary.
The film producers and Copyright Management Systems ltd have also noted that the Eastern High Court did not find any reason to comment on the European Court of Justice's assessment of the subscriber's liability and the evidence. In the summer and with the October 2018 decision, the EU Advocate General and the European Court of Justice issued principal considerations regarding the burden of proof between rightsholders and subscribers. It would have been interesting to hear the High Court’s considerations too – whether the High Court disagreed on the district court’s interpretation of the EU judgment.
Some district courts have interpreted the High Court's ruling in a way where cases concerning the same film and others should also be dismissed. The Appeals Permission Board has permitted that some of these are brought before the Eastern High Court. Here the scope of the High Court's decisions from April 2020 can be heard. However, these decisions are not expected until 2021.
If you have received a letter or a writ of summons but are not aware of the illegal activity detected using your IP address, it is important that you help clarify what may have happened.
As a rule, you are not responsible for others’ use of your Internet connection, but our view is that you as the subscriber are liable to investigate and secure the Internet connection for which you are paying.
However, the actual circumstances will determine if you are liable for your Internet connection being used for illegal activities.
In a decision of 18 October 2018 ("Bastei Lübbe") the European Court of Justice emphasised the importance of the subscriber answering questions from the rightsholder in concrete terms. All cases on this issue are extremely specific and always include a balanced weighting by the courts between the subscriber's ability to use the Internet and the protection of copyright.
It follows from the case-law that the subscriber to a given IP address may be liable for copyright infringement on the Internet following a specific assessment of negligence. This is based on a general assessment of culpability, which includes several specific facts and circumstances.
When a copyrighted film is downloaded without the consent of the rightsholder, a copy is made in violation of the Copyright Act and, when the film is simultaneously shared, a public performance of the film is made, which is also in violation of the Copyright Act.
Downloading, making available, and sharing a copyrighted film without the consent of the rightsholder is, therefore, in violation of the Copyright Act and simple negligence is sufficient to incur liability.
In specific cases, simple negligence may involve many different acts or omissions. For example, you may have disclosed the password to third parties or removed the password from your Wi-Fi, even though a password came with the router when it was received from your Internet service provider.
In Case C-149/17, the European Court of Justice has specified the burden of proof applicable in the field of copyright and established that the presumption of negligence does not exist (reversal of the burden of proof).
As the holder of the IP address where an infringement of rights has occurred, you are the key person in possession of the information about the activity on the Wi-Fi. Therefore, you must cooperate and disclose the information that can elucidate the case.
If your wireless network is not properly secured, it can, in the worst case, lead to the misuse of your Internet connection for criminal acts. Fortunately, in the vast majority of cases, this kind of thing can be avoided if only simple precautions are taken.
We have created a seven-step guide to help you ensure your Wi-Fi is not used for illegal activity:
1. Encrypt your Wi-Fi
Encryption of your Wi-Fi is usually turned on by default on your router. However, it is always a good idea to check that encryption is turned on to be sure.
2. Change the name of your Wi-Fi
Give your Wi-Fi a name that does not reveal which provider you use or what model your router is. If you keep the original name of your network, it will be easier for others to access and abuse your network connection.
3. Create your own unique password
When you set up your wireless network, you will often get a default password. You should change the default password to a private and unique password. Avoid making the password predictable. You should choose a complex password of between 15-20 characters with both upper and lowercase letters, numbers, and special characters. Changing your password regularly is also a good idea.
4. Update your router
You should always check if the manufacturer of the router has posted new updates to your router. If you update your router regularly, any security vulnerabilities will be "patched", and you will reduce the risk of others taking advantage of your network.
5. Firewall
Always make sure you have a firewall protecting your router. This will significantly increase the security of your Wi-Fi.
6. Hide and monitor your Wi-Fi
By hiding the name of your Wi-Fi, you minimise the ability of others to find your network. At the same time, you should regularly check your router's device list, which shows which devices are connected to your Wi-Fi
7. Use the 5GHz network
All newer routers can use 5GHz networks. If your devices using Wi-Fi can use 5GHz networks, you should use this. It has a shorter range and, thus, increases the security of your network.
On behalf of Scandinavian and international film producers, NJORD sends letters to people whose IP addresses have been used to illegally download, stream, or share films. The purpose of the letter is to investigate the illegal activity detected so that a solution can be found through cooperation, and legal action can be avoided.
All cases are concrete and concern individual circumstances that are important to elucidate. That is why we call on all recipients of letters to engage in dialogue so that we can jointly find a solution that considers the circumstances of each case.
We believe that a letter is the best and most peaceful way to do this.
In the case of illegal download/streaming on the web, the subscriber to the IP address is contacted by letter with a few questions requesting a dialogue. Some do not reply to the letters, which are, therefore, followed up with additional letters and a plea to conciliation. If the subscriber does not respond, the rightsholders may have to bring the case before to court.
When a writ of summons is sent, this is considered a last resort. A lawsuit is not in the interests of the subscriber or the rightsholder, as this costs money and time. A writ of summons is the last opportunity to have a dialogue, which is required to resolve the case.
In 60 per cent of cases where the letters have been answered, settlements are reached so that litigation is not necessary.
The IP address locates where the violation occurred. That is our starting point. The IP address is where we start our investigation. The IP address is not necessarily the only evidence in these lawsuits.
MaverickMonitor is a program used by film producers to monitor file-sharing networks. This is done to track the illegal downloading and sharing of the films that the film producers have helped to develop.
MaverickMonitor does not constantly monitor IP addresses but instead takes samples of a short-duration and records when sharing of protected material is detected. The program was developed by the German company MaverickEye UG, and the reliability of the program has been assessed by many independent experts. Several courts (both national and foreign) have found that MaverickMonitor is suitable as evidence of copyright violations, including Norway, Sweden, and Finland, with which Denmark in many contexts shares case law.
Among other things, an expert report prepared by the Norwegian University of Science and Technology (NTNU) in October 2019 found that there was no "(...) reason to question that MM [MaverickMonitor] is capable of a gathering correct data.”
Several Danish reports have come to the same conclusion as NTNU. Among others, Optimero A/S prepared an expert report for a court case before the Court of Frederiksberg in August 2017. The report concluded, after a blind test, that "the MaverickEye program can be used as evidence that a specific IP address participates in the download and sharing of a specific file at a specific time and is, thus, reliable and trustworthy.”
The use of MaverickMonitor does not require that rightsholders or suppliers such as Maverickeye UG make their films available for sharing on the Internet.
Maverickeye UG, the company that developed MaverickMonitor, receives a copy of the film, which is to be tracked on file-sharing networks. The film has a unique hash value calculated mathematically based on the file's data content.
When MaverickMonitor finds that a user shares a file with a hash value identical to the one of the film producer’s film, MaverickMonitor establishes contact with the user and retrieves data from the user (the subscriber). In this context, MaverickMonitor receives data, but MaverickMonitor does not share copyrighted material.
As a law firm, NJORD is subject to both the legal ethics rules and the General Data Protection Regulation (GDPR). All data collected or received will be processed accordingly. Information provided through discovery is deleted continually and in accordance with good practice in the field.
Fortunately, the risk that a subscriber to a telecommunications company has been hacked by a third party for the purpose of illegal file-sharing is not great. This has been established in a thoroughly prepared expert report, which has also been considered by several district courts across the country.
Broadband providers ensure that their subscribers' Internet connection is well protected by built-in firewalls that protect each subscriber from others being able to hack them. Also, the network is encrypted with WPA2-Personal encryption and a password that is almost unbreakable.
The likelihood that the illegal file-sharing took place using the subscriber's IP address because the subscriber has removed the password or has disclosed the password to third parties must be considered greater than hacking. Danes' use of online streaming services has never been greater, and a new report from the Danish Chamber of Commerce shows that 12% of Danes (about 560,000 people) have downloaded or streamed illegal content on the Internet in the past 12 months.
In an order of 7 May 2018, the Eastern High Court ruled on whether the information about a large number of internet subscribers should be disclosed based on evidence of a general scope of violations.
The Eastern High Court did not assess the copyrights regarding the individual subscribers but noted that "serious reasons for the confidentiality of the telecommunications data requested" "must be weighed against the interest in obtaining the information."
As regards the disclosure of the specific subscriber information, the High Court considered, based on an overall assessment, that the consideration of the individual subscribers' claims for secrecy outweighed the consideration of the rightsholders, as the information at the time was only still stored by the telecommunications companies in a database for the purpose of disclosure to the police under the rules of the executive order on logging.
However, the Eastern High Court's order of 7 May 2018 does not affect the rulings on discovery made before the order, as there is a general principle that judgments are not retroactive.
By decision of 10 August 2018, the Appeals Permission Board refused to grant a leave of appeal to appeal the order of the Eastern High Court of 7 May 2018 to the Supreme Court. The case was not considered to concern fundamental legal principles.
The Court of Aarhus ruled on 25 June 2018 that the Eastern High Court's decision of 7 May 2018 had no bearing on an earlier order concerning discovery. On 12 September 2018, the Appeals Permission Board considered that the question raised by the defendant was not of a principled nature and the order could, therefore, not be appealed to the High Court. Therefore, the order is final and has both legal force of law and precedential value.
The Copenhagen City Court also considered the matter in a judgment of 12 December 2019 and concluded that Copyright Management Systems ltd is entitled to use subscriber information:
"When this information was provided by TDC to Copyright Management Systems ltd's lawyer, the order from the Court of Frederiksberg was final and enforceable. [...] The fact that, in another case of 7 May 2018, the Eastern High Court ruled that the Internet service providers in question did not have to disclose subscriber information does not change that."
Under the Copyright Act, an aggrieved party is entitled to claim a reasonable remuneration for the exploitation of a work, i.e., the viewing and sharing of a film.
This refers to the fee to which the aggrieved person would have been entitled, if the exploitation had been carried out with the permission of the rightsholder, and it is not a condition that the aggrieved party has suffered a loss.
The use of BitTorrent involves both downloading and sharing films via the Internet connection, and since agreements are usually not concluded about this type of distribution, the remuneration must be calculated based on a hypothetical licence fee level.
In a 2005 court case before the Western High Court, the defendant had a website from which downloading of illegal films were encouraged. The website contained lists of films that users could exchange with each other. In the case, there was no evidence with exact numbers on how many users the films were shared with. Thus, the court was obliged to make a discretionary determination based on the information about the sharing of the films presented in the case.
When calculating the amount, the decision emphasised that most of the films exchanged were newly released films that would have been sold at full price if they had been sold as DVD films in stores. The court then set the price at DKK 100 per film excl. VAT and stated in the judgment:
"Since this selling price also includes the costs of production and distribution and other operating costs, the reasonable remuneration shall be set at a lower amount corresponding to the gross profit margin." The gross profit margin was then set at DKK 70.00 per film.
The judgment of the Western High Court includes several considerations about the cost of producing, distributing, and selling films, respectively. Based on these, the High Court establishes a model for calculating a reasonable remuneration for films which have been illegally shared. Both the High Court's considerations on prices and the principles of the calculation model can be used to establish a reasonable remuneration in other cases where films have been made available and shared.
The High Court did not require that the exact number of shares be documented. The extent of the shares is determined based on a discretionary assessment, as it is not always possible to determine the exact number of shares. Moreover, this is also the case in determining the number of listeners to illegal radio channels, the number of participants at a concert or film events where works are performed without the permission of the rightsholder.
File-sharing programs work by allowing a user to download a requested file, which is then downloaded from other users of the program who have the file available. Thus, because a user downloads a file or parts thereof, the user is part of the group (referred to as a "swarm") of users who have the file available and from which other users can thereby download the file.
In the field of copyright, file-sharing in peer-to-peer networks means that a user can potentially share with all other users in the network, thus making the files a user shares available in the network to all users. It is not decisive whether the actual number of shares, from a technical point of view, was exactly 200, 250, or 500. The decisive factor in the copyright sense is that it can be established with certainty that the works in the cases have been made available to all users of the file-sharing network since all users had the opportunity to download the film using their internet connections. The technical evidence shows the number in a swarm and documents a short period where the film is found linked to an IP address. Multiple observations within a period can document an entire film over time, just as viewing and sharing part of a film is also in itself usually contrary to copyright (except the right to quote and the like).
The requirement for downloading and sharing of a film is estimated based on a precautionary principle, setting the number of shares to 110 shares.
If the number of shares is used in the cases concerning the sharing of film works, which could be 269, for example, the reasonable remuneration according to the Western High Court 's calculation model is 269 shares x 1 film x DKK 70 per sharing = DKK 18,830.
If, on the other hand, the estimated number determined based on a precautionary principle for the sharing of the film works in the cases is considered, the reasonable remuneration according to the Western High Court 's calculation model is 110 shares x 1 film x DKK 70 per sharing = DKK 7,700.
The claim has been between DKK 5,000 and DKK 7,500.
A dynamic IP address is an IP address that changes continually. A dynamic IP address can change every time your router has been turned off for many hours. This is unlike a static IP address and a fixed IP address that does not change even if the router has been turned off for a long time.
Because the IP address only changes after the router has been turned off for many hours, subscribers with a dynamic IP address may also be assigned the same IP address for several months at a time if the router is not turned off regularly and remains turned off for several hours.
Each case concerns a single specific time when a copyright infringement has been recorded. Therefore, the question of dynamic IP addresses is less relevant to the specific cases. In the specific cases, the Internet service provider has disclosed the identity of the IP address holder and the Internet service provider will always be able to ascertain which IP address is assigned at any given time.
Log information can be used to map patterns about the use of the IP address specifically around the specific time specified for the infringement.