Europe's Top Court Rules Linking Can Infringe Copyright If Done For Profit

Europe continues, in its anger, frustration and panic over its inability to compete technologically with the US and China (as well as its frantic obsession with Google), to pursue Luddite-ish policies which are unlikely to provide either short-term surcease or long-term solutions to the region's innovation needs. JL

Natasha Lomas reports in Tech Crunch:

The hyperlink (i)s “the basis of the open Internet”. The question is what are the obligations of content platforms and how much do you really force them to check everything before it is finally uploaded? What does that mean for free speech? “Do you really want platforms to be the gatekeeper that make the decision of whether something falls under a parody exemption or it doesn’t?"
Europe’s top court has ruled that knowingly posting links to copyrighted material can be an infringement of rights holders’ rights — even though the copyrighted material in question is being hosted elsewhere. People posting links in a for-profit scenario also have an obligation to have checked they are not infringing copyright, in the court’s view.
The ruling pertains to a specific case involving a Dutch news website, GeenStijl, which repeatedly posted links to Playboy photos of a local TV presenter. The photos at the centre of this dispute were being hosted on various other websites without the consent of the rights holder, and GeenStijl had apparently ignored requests by the rights holder to stop linking to the copyrighted material. Although the case dates back to 2011, an appeals court in the Netherlands sought a preliminary ruling from the CJEU on the hyperlinks copyright point and that’s now been issued today.
While the CJEU ruling notes the importance of the flow of information between individuals online for fundamental rights such as freedom of speech and expression, it also emphasizes the need to maintain what it dubs a “fair balance” between the interests of rights holders and the fundamental rights of users of protected objects. It’s that ‘balance’ the ruling seeks to achieve by creating a distinction between knowingly posting a link to copyrighted material vs doing so unaware and with no intention of seeking financial gain.
In its announcement of the ruling, the CJEU writes (emphasis mine):

…the Court holds that, for the purposes of the individualised assessment of the existence of a ‘communication to the public’, it is necessary, when the posting of a hyperlink to a work freely available on another website is carried out by a person who, in so doing, does not pursue a profit, to take account of the fact that that person does not know and cannot reasonably know that that work had been published on the internet without the consent of the copyright holder. Indeed, such a person, does not, as a general rule, intervene in full knowledge of the consequences of his conduct in order to give customers access to a work illegally posted on the internet.
In contrast, where it is established that such a person knew or ought to have known that the hyperlink he posted provides access to a work illegally published, for example owing to the fact that he was notified thereof by the copyright holders, the provision of that link constitutes a ‘communication to the public’. The same applies if that link allows users to circumvent the restrictive measures taken by the site where the protected work is posted in order to restrict the public’s access to its own subscribers.
Furthermore, when hyperlinks are posted for profit, it may be expected that the person who posted such a link should carry out the checks necessary to ensure that the work concerned is not illegally published. Therefore, it must be presumed that that posting has been done with the full knowledge of the protected nature of the work and of the possible lack of the copyright holder’s consent to publication on the internet. In such circumstances, and in so far as that presumption is not rebutted, the act of posting a clickable link to a work illegally published on the internet constitutes a ‘communication to the public’

As Fortune notes, the ruling is unusual in that it goes against the earlier opinion of the court’s advocate-general who back in April recommended that links to copyrighted material should not be considered a copyright breach themselves. AG opinions are usually highly influential on the CJEU — but in this instance the court has sought a third way, ruling that linking when unaware of copyright infringement and in a not-for-profit context is fine but adding a set of exceptions where a hyperlink could be considered a copyright breach in and of itself. It’s a ruling that threatens to complicate how copyright operates online in Europe by adding another lay of complexity.
Most obviously the ruling could have substantial implications for search engine Google, whose core business involves hyperlinking to content hosted elsewhere. (In Europe the search engine has a more than 90 per cent share of the search engine market.) But the impact could potentially stretch to any for-profit online publisher which hyperlinks to others’ content. Although it remains to be seen how broadly courts in EU Member State interpret the notion of posting a link for financial gain.
Google publishes a Transparency Report providing an ongoing tally of search result links that it has removed at the request of rights holders. This shows that in the past year it removed 832 million links to content on 342,000 websites. And while that’s already a very large number, all those instances involve Google responding to a takedown notice from a rights holder. By contrast the CJEU ruling appears to imply that for-profit entities such as Google might have a pre-emptive responsibility to check the legality of the content they are linking to before serving a hyperlink to a user — rather than waiting to receive a takedown notice. Which would be a huge shift.
On the flip-side the ruling suggests that individuals who post links to pirated content online without knowing the content they are linking to is copyrighted and without doing so for their own financial gain would not be infringing copyright — with the court noting “it may prove difficult, in particular for individuals who wish to post such links, to ascertain whether the works involved are protected and, if necessary, whether the copyright holders of those works have consented to their publication on the internet”.
As it happens, the EU is also in the midst of reworking the region’s copyright law — with a proposed reform package due to be published later this month, on September 21.
Late last month a leaked version of the EC’s copyright reform document suggested the Commission is planning to extend copyright protections to publishers — taking a similar approach to the German government which, back in 2014, backed a so-called ancillary copyright law designed to cover the news snippets displayed in Google News. A similar law was enacted in Spain — without a publisher opt-out and with a mandatory fee for displaying publisher snippets — leading to Mountain View to pull the plug on its Google News service in Spain.
It remains to be seen how or whether the CJEU hyperlink copyright ruling impacts Google’s business — as well as how or whether any EU-wide expansion of ancillary copyright for publishers might play out. We’ve reached out to Google for comment and will update this post with any response.
Expressing concerns about the EC’s copyright reform process late last month, Mozilla’s chief innovation officer Katharina Borchert described the hyperlink as “the basis of the open Internet”. The organization is actively campaigning for EU copyright law to better reflect the reality of how web users share content online.
Discussing concerns that the Commission intends to support the expansion of copyright for publishers last month, Borchert also touched on some of the key concerns that are likely to follow today’s CJEU ruling, telling TechCrunch: “The question is what are the obligations of content platforms and how much do you really force them to check everything before it is finally uploaded? What does that mean for free speech?
“Do you really want platforms to be the gatekeeper that make the decision of whether something still falls under a parody exemption or it doesn’t? Those are really difficult questions where in the past the balance really hasn’t been struck right.”