The panel of judges of the Court of Appeal of Lithuania, having examined the applicant’s Association LATGA, as well as the defendants’ UAB Lietuvos radijo ir televizijos centras, UAB SPLIUS, AB Telia Lietuva, UAB Cgates, UAB Balticum TV, UAB Init and UAB Bitė Lietuva appeals against the decision of the Vilnius Regional Court of 20 November 2017 in the case of Linkomanija, decided that Internet service providers will have to block access to the website linkomanija.net at their own expense.
In this case, the Collective Administration Association of Lithuanian and Foreign Authors and Other Copyright Holders LATGA (hereinafter - LATGA) requested the Vilnius Regional Court to prohibit the defendant, Internet service providers, from providing access to the website linkomanija.net to their customers via electronic communication networks. Vilnius Regional Court upheld the claim by ordering the defendants to block their recipients’ access to the website linkomanija.net across the networks operated by the defendants by technical means of their own choice and at the expense of the applicant LATGA. The applicant disagreed with the part of the decision of the Court of First Instance, which obliges the defendants to block their recipients’ access to the website linkomanija.net at the applicant’s expense. The defendants lodged a total of 7 appeals based on fundamental disagreement with the decision of the Court of First Instance.
Although the panel of judges of the Lithuanian Court of Appeal agreed in principle with the assessment of the circumstances of the case regarding the application of blocking access to the website linkomanija.net and the arguments substantiating it, it did not agree that the costs incurred by the defendants in blocking access to the website should be reimbursed by the applicant. On 15 January 2019, Chamber of Judges of the Lithuanian Court of Appeal passed the decision upholding the applicant’s LATGA appeal and amended the decision of the Court of First Instance by removing from the operative part of the decision the statement that the ban on access to the website linkomanija.net in the networks managed by the defendants must be implemented at applicant's expense.
Commenting on the blocking of access to the relevant website, the Chamber of Judges of the Appellate Court first noted that the measure provided for in Article 78 (1) of the Law on Copyright and Related Rights of the Republic of Lithuania is applicable when: 1) the defendant is an intermediary, i.e. a natural or legal person, including a branch or representative office of a foreign legal person registered in the Republic of Lithuania, providing electronic communications network services consisting of transmission of information provided by third parties via electronic communications networks or provision of access to and / or storage of information provided; 2) the intermediary provides services to third parties; 3) third parties use these services in violation of copyright, related rights or sui generis rights. Furthermore, even if all the above conditions for the blocking of access by the intermediary are established, the European Union law obliges the court hearing the case to verify whether the measure applied for complies with the requirements of the principle of proportionality in a particular case.
Having assessed the case law of the Court of Justice of the European Union (hereinafter - CJEU), the panel noted that the term "intermediary" covers any person who transmits an infringement of a protected work or other subject matter by a third party online. Given that the internet service provider (hereinafter - ISP) is the entity responsible for any online transmission of the infringement to its customers and to a third party, as it enables such transmission by providing access to the network, the ISP allowing its customers to access protected facilities, which were made publicly available on the Internet by a third party, is an intermediary whose services are used in violation of copyright or related rights. There is no requirement for a contractual relationship between the person infringing the copyright or related rights and the intermediary.
The fact that the operation of the website linkomanija.net was based on the peer-to-peer principle of the BitTorrent Protocol Technology was not disputed in the case. In other words, each “client” computer to which a file is downloaded automatically becomes a server where the file is shared with other users. The Chamber noted that the ECJ decision of 14 June 2017 in case No. C-610/15 (Stichting Brein v. Ziggo BV, XS4ALL Internet BV) ruled that the term “communication to the public” includes an online file-sharing platform which, through the indexing and search engine of metadata relating to protected works, enables its users to find those works and share them on a peer-to-peer network, submission and administration. Therefore, the Chamber of Judges agreed with the Court of First Instance that, in the case of websites based on the same principle as linkomanija.net, both website administrators and users of the website should be considered infringing third parties within the meaning of Article 78 (1) of the Law on Copyright and Related Rights of the Republic of Lithuania. All of them, together and individually, commit the act of unlawful communication to the public.
Within the framework of the case, the finding of the Court of First Instance was upheld stating that the measure sought by the applicant could not be regarded as inappropriate because of its ineffectiveness. The Chamber of Judges noted that, according to the ECJ case law, it is not necessary for the protection of intellectual property to be ensured in absolute terms, i.e. that the proposed measure put an end to the infringement of copyright. It is sufficient that it seriously discourages internet users from committing these infringements and that they be difficult to commit. According to the Chamber of Judges of the Appellate Court, in order for the measure sought to be considered effective, it cannot be required that the possibility of infringement be made more difficult or deprived for the majority of users of the site, because even if a small proportion of users can no longer contribute to copyright infringement, the extent of copyright infringement would be reduced, which would mean that such a measure would at least partially achieve the objective of eliminating and preventing copyright infringement.
Although the Chamber upheld the defendants’ argument that bringing an action directly against the operator of linkomanija.net should be considered a priority measure in the light of the principle of proportionality, having regard to the objectives of the legislation providing for the possibility of requiring an intermediary to be barred and the provision set out in the Preamble (59) of the Directive 2001/29/EC, the Chamber concluded that the applicant could not be required to incur excessive, high costs and time-consuming procedures for identifying and claiming the administrator of the infringing website. If the operator of the infringing website does not cooperate, is outside EU jurisdiction or is difficult to identify, the applicant should not be deprived of the right to seek direct redress under Article 78 (1) of the Law on Copyright and Related Rights of the Republic of Lithuania. The Chamber has also ruled that the operators of a website to which it is required to restrict access should not be required to be involved in such third-party litigation. In the Chamber’s view, the administrator of a website who makes his contact details difficult or inaccessible must bear all the risks involved, including the possibility of imposing appropriate injunctions on intermediaries without first hearing the court’s position on the matter. Furthermore, the imposition of a ban on an intermediary by a court decision does not mean that this ban will in the future, in the event of a change in the circumstances which led to the application of the relevant ban, will not be subject to judicial review at the request of interested parties, including the manager of linkomanija.net.
The Court of Appeal upheld the finding of the Court of First Instance that the applicant had provided sufficient evidence in the case that he had exhausted his reasonable efforts to direct his claims to the linkomanija.net manager and that attempting to remedy the copyright infringement in this way was likely to be ineffective and costly in terms of time and expense. The Chamber ruled that blocking access to infringing websites was a more effective remedy than appealing to the hosting provider to close the site, and therefore rejected as unfounded the defendants’ argument that the applicant should have brought an action against the Swedish hosting company of linkomanija.net before bringing the action against them.
The Chamber rejected the applicant’s argument that the publication of at least some copyrighted works on the disputed website was sufficient for the application of the measure provided for in Article 78 of the Law on Copyright and Related Rights of the Republic of Lithuania, since such an assessment would give undue priority to the protection of intellectual property rights without regard to other Charter protected rights. The Chamber stated that in order to recognize that the need to protect the rights of a copyright holder outweighs the right to information and freedom of expression in a particular case, sufficient evidence must be provided to enable the court to rule on the likelihood that copyright the extent of the infringements is large enough to justify blocking. Circumstances such as the nature of the information shared on the dispute website, the principles of operation of the website, the attitude of the operators of that website, etc. may be relevant in this respect. After assessing the full body of evidence in the case, the Chamber upheld the First Instance Court’s finding that linkomanija.net, despite some of its legitimate information, is essentially a pirated website intended for the sharing of infringing information, so that, in assessing the proportionality of the measure sought by the applicant, the need for copyright protection outweighs the right to information of linkomanija.net users. Moreover, most copyrighted works will continue to be freely available to the user through legal distribution sites, i.e. the user's right to information will not be denied at all if the site is blocked.
Commenting on the defendants’ argument that the ban applied only to them violates the freedom of fair competition enshrined in Article 46 of the Constitution of the Republic of Lithuania by creating unequal conditions of competition with those Internet access service providers who were not involved in the case, the Chamber of Judges of the Court of Appeal of Lithuania noted that in accordance with the principle of dispositivity valid in civil proceedings, the person or persons to whom the claim is filed are selected by the plaintiff. The law does not provide for the possibility for a court to reject a claim filed by an applicant on the sole ground that it is not brought against all persons who could respond to such a claim. The Chamber noted that the applicant is not deprived of the right to make a claim against any other internet access provider at any time. In addition, it is likely that other ISPs will voluntarily take measures to restrict access to the linkomanija.net website following the entry into force of the decision in this case, in order to avoid possible litigation against them and to assess the prospects for such litigation if initiated.
The panel of judges, amending the part of the decision under appeal concerning the costs of implementing the blocking measure, stated that internet access providers have an obligation to contribute to the elimination of online infringements, which includes their obligation to bear the proportionate costs involved. The Chamber agreed that passing on the costs of implementing the ban to the right holder could be one of the measures to be considered in order to ensure the proportionality of the ban imposed on the intermediary, but ruled that such a need was not identified in the present case. The Court of First Instance applied an abstract prohibition which did not specify the specific measures to be taken by the defendants to block access to the website linkomanija.net, leaving that choice to the defendants themselves. In this way, defendants have the opportunity to choose the measures that best suit their resources and capabilities, i.e. the defendants’ freedom of establishment is protected from excessive restrictions related to the disproportionate costs of enforcing the ban. At the hearing, the defendants did not show that any of the available measures involve a very high investment requirement; on the contrary, they acknowledged that at least some of the available technologies do not involve high costs and there is therefore no reason to consider that the passing on of the costs of implementing the ban to the applicant in the present case is necessary in order not to deny or severely restrict the defendants' right to conduct business. The Court also found it significant that the applicant in the present case was not a business entity but a non-commercial collective copyright holder administration association and therefore, the costs incurred in enforcing the decision cannot be attributed to natural business costs.