Marco Bassini is the Managing Editor of MediaLaws, www.medialaws.eu, and a lawyer at Baker & McKenzie LLP’s office in Milan. The re-posting of this analysis is part of a cross-posting collaboration with MediaLaws: Law and Policy of the Media in a Comparative Perspective.

In the decision no. 11/2014 handed down on January 31st, the Audiencia Provincial Civil de Madrid has rejected Telecinco’s appeal against the judgement of the Juzgado de lo Mercantil dated 20th September 2010.

The proceedings concerned a claim for copyright infringement raised by Telecinco as a consequence of the posting of some videos on the YouTube platforms youtube.es and youtube.com.

The Court of First Instance had found that YouTube bore no responsibility for the publication of copyrighted materials, since it acted as hosting provider having no control over the contents posted by users through the use of its services.

The appeal decision establishes itself in the wake of the judicial efforts of EU Member States’ courts to determine upon which conditions ISPs should face the consequences of violations (including copyright infringements) committed by users.

The legislative framework in force in the EU, in fact, constituted by the Directive 2000/31/EC (E-Commerce Directive), contains provisions which are likely to appear dated and, to a certain degree, not consistent with the evolution of the technological scenario.

The Court of Justice of the European Union, in the leading case Google v Louis Vuitton (C-236/08 to C-238/08), has pointed out that the provisions governing ISPs liability must be construed in accordance with the ways operators actually perform their services. A crucial factor to determine whether the liability exemptions set forth in the Directive are enforceable, in the Luxembourg Court’s view, is whether the ISP in question does act in a purely passive way, i.e. as an intermediary.

Moving to the case, the appeal brought by Telecinco against the decision of the Juzgado Mercantil was based on different grounds.

First of all, Telecinco alleged that YouTube did actually operate as a content provider with an editorial control over the website. Then, the point was not whether liability exemptions were applicable or not, since the argument of Telecinco assumed that YouTube bore a direct responsibility, acting as a content provider.

In a nutshell, the attempt of Telecinco was to demonstrate that YouTube fell outside the scope of the service providers and, accordingly, could not avail of the provisions of the E-Commerce Directive.

To support this claim, Telecinco referred to some circumstances that were supposed to reflect the exercise of an editorial control by YouTube. Among others, it was pointed out that (i.) YouTube had obtained from the relevant collecting societies the licenses concerning copyright and related rights over certain contents;  (ii.) YouTube had established a content regulation through the implementation of a policy that must be accepted by users;  (iii.) YouTube had provided particular “Terms and Conditions of Service”; (iv.) YouTube selected the most popular contents and provided a classification of the contents in different categories.

According to the Court of Appeals, none of these circumstances support the assumption that YouTube was operating as a content provider. The fact, for instance, that YouTube had obtained licenses for the use of certain contents or that contents were classified in different categories, does not imply that it is acting in a non-passive way, in the sense required by the Court of Justice to exclude the applicability of the liability exemptions.

The second point raised by Telecinco was that, even if YouTube acted as a service provider, the liability exemption for hosting providers -entrusted to Article 16 of the Law 34/2002 (implementing the E-Commerce Directive)- was inapplicable. In the appellant’s view, even were Telecinco qualified as service provider, it would have nevertheless had actual knowledge of the existence of unlawful activities. Thus, Telecinco could not benefit of the liability exemption.

In this regard, the Court expressly quotes the reasoning of the Tribunal Supremo in a ruling of 2009 regarding the construction of the requirement of “actual knowledge”. In the view of the Spanish Supreme Court, the actual knowledge must be established not only “when a competent authority has declared the unlawful nature of the contents, ordered the removal or the blocking of the same and the provider has been noticed of such decision”. In fact, even the knowledge of the unlawful activities that a provider obtains indirectly or otherwise, regardless of the specific ways, is relevant.

In the case at stake, the Court points out that a notice was given by Telecinco to YouTube that copyrighted contents had been unlawfully uploaded on the website and that Telecinco’s mark was featured on the images of the concerned videos. Making reference to the judgment of the Court of Justice in the case L’Oréal (C-324/09), the Court of Appeals has clarified that the sole communication that a rightholder provides to the owner of a website noting the existence of violation may not suffice to establish the “actual knowledge” requirement. For instance, the notice could be not specific enough in defining the contents that amount to copyright infringements.

In the case at stake, the Court has found that nothing in the notices given to YouTube permitted to identify which contents were infringing Telecinco’s rights. Then, YouTube had no actual knowledge of the parts of the website that must be subject to removal or blocking as result of a copyright violation.

The third and last argument advanced by Telecinco claims for the imposition over YouTube of a system aimed at blocking the access to its services to the users involved in copyright infringements.

As regards this point, the Court of Appeals has referred to some decisions of the Court of Justice (Sabam, C-360/10 and Scarlet C-70/10, in particular) to conclude that such a system would (i.) undermine the protection of other fundamental rights enshrined in the Charter of Fundamental Rights of the European Union, and (ii.) be in contrast with the absence of a general obligation of control over ISPs.

In fact, any order directed to ISPs for the removal of unlawful contents in breach of copyright is not per se prohibited in the EU relevant law, but must respect the conditions set forth under the Directive 2001/29/EC and 2004/48/EC, further to the E-Commerce Directive.

Then, the Court has rejected the appeal and confirmed the decision of the Juzgado Mercantil.

In light of the arguments convincingly used by the Court, it is supposed that there will be no room for different rulings in the case in the future.

[The original posting of this analysis can be found on the blog, MediaLaws: Law and Policy of the Media in a Comparative Perspective.]