Jurisdiction in a case of online copyright infringement

With decision of last 3 October in case C-170/12, the European Court of Justice (“ECJ”) ruled on jurisdiction in a copyright infringement case. The issue originated from a claim for damages by the musician Peter Pinckney (“Plaintiff”) against the Austrian company KDG Mediatech AG (“Mediatech”). The Plaintiff claimed to be the author, composer and performer of 12 songs recorded on a vinyl record and then reproduced on CDs pressed in Austria without the author’s consent. Afterwards, the CDs  were distributed by two British companies through web sites accessible, among others, from the Plaintiff/author’s residence in Toulouse, France.

For these reasons, the Plaintiff brought an action against Mediatech before the Tribunal de grande instance de Toulouse which dismissed Mediatech’s plea of lack of jurisdiction. The Tribunal de grande instance noted that the Plaintiff had been able to purchase the CDs at his residence in France from an internet site accessible to the French public. Therefore the French Court stated that this fact was sufficient to establish “a substantial connection between the facts and the alleged damage, justifying the jurisdiction of the court seised”.

Mediatech appealed against that judgment before the Cour d’Appel de Toulouse who overturned the first-instance decision. The second-instance Court considered in fact that the jurisdiction was incorrectly chosen “on the ground that the defendant is domiciled in Austria and the place where the damage occurred cannot be situated in France, and that there was no need to examine the liability of Mediatech and of [the British companies selling the CDs online] in absence of any allegation of collusion between them and Mediatech”.

In light of such verdict, the Plaintiff brought an appeal before the Cour de Cassation, relying on Article 5(3) of Regulation (EC) no. 44/2001 on jurisdiction in civil and commercial matters (the “Regulation”), according to which “a person domiciled in a member state may, in another Member State, be sued (…) in matters relating to tort, delict or quasi-delict, in the courts for the place where the harmful event occurred or may occur”. The French Court of Cassation – which was asked to decide on this point – suspended the proceedings and referred two questions to the ECJ for a preliminary ruling. The ECJ reformulated the questions as follows: “whether Article 5(3) of the Regulation must be interpreted as meaning that where there is an alleged infringement of a copyright which is protected by the Member State of the court seised, that court has jurisdiction to hear an action to establish liability brought by the author of a work against a company established in another Member State, which has in the latter State reproduced that  work on a material support which is subsequently marketed by companies established in a third member State through an internet site which is also accessible in the Member State of the Court seised”.

The Court firstly recalls that the principle attributing jurisdiction to the courts of the defendant’s domicile (Article 2(1) of the Regulation) is derogated, among others, by the special jurisdiction rule – as such to be construed restrictively – laid down in Article 5(3) of the Regulation. However, in light of Melzer case which is recalled on the point, the judges remind that the expression “place where the harmful event occurred or may occur” used in the provision in issue is intended to cover both the place where the damage occurred and the place of the event giving rise to it, so that the defendant may be sued in the courts for either of those places. In addition, the Court points out that the exception laid down in Article 5(3) only applies if there is “a particularly close connection factor between the dispute and the courts of the place where the harmful event occurred or may occur”, so that “the only court before which an action may properly be brought is the court within whose jurisdiction the relevant connecting factor is to be found”. In light of that, in this case it was to be verified if the French court seised had jurisdiction based on the place where the damage effectively occurred, it being needed to this aim to “specifically set out the circumstances in which (…) the damage (…) occurred or may occur in a Member State other than that in which the defendant reproduced the author’s work onto a material support which is then sold via an internet site which is also accessible within the jurisdiction of the court seised”.

The Court secondly recalls the following consistent principles of case law with respect to infringements committed via the internet which may, as a result, produce their effects in numerous places: i) the place where the damage occurred within the meaning of the provision in issue may vary according to the nature of the right allegedly infringed; ii) the likelihood of the damage occurring in a particular Member State is subject to the requirement that the right in respect of which infringement is alleged is protected in that Member State; iii) in order to attribute jurisdiction to a court, the identification of the place where the damage occurred also depends on which court is best placed to determine whether the alleged infringement is well founded. In previous cases, the Court applied such principles to determine the place where the damage committed via the internet occurred both in case of infringement of personality rights and of IP rights, distinguishing between the two kinds of infringement. In the present case, however, the Court was asked to take a decision regarding copyright infringement.

On this point, the Court firstly states that such right is subject to the principle of territoriality (i.e. the right is automatically protected in all Member States where it may be infringed in accordance with the applicable substantial law). Moreover, Article 5(3) does not require that the activity concerned is “directed to” the Member State in which the court seised is situated. Consequently, according to the judges, as regards the infringement in issue “jurisdiction to hear an action in tort, delict or quasi-delict is already established in favour of the court seised if the Member State in which that court is situated protects the copyrights relied on by the plaintiff and that the harmful event alleged may occur within the jurisdiction of the court seised”. In particular, in the present case, the Court considers that “that likelihood arises (…) from the possibility of obtaining a reproduction of the work to which the right relied on by the defendant pertain from an internet site accessible within the jurisdiction of the court seised”. The Court therefore finally states that “in the event of alleged infringement of copyrights protected by the Member State of the court seised, the latter has jurisdiction to hear an action to establish liability brought by the author of a work against a company established in another Member State and which has, in the latter State, reproduced that work on a material support which is subsequently sold by companies established in a third Member State through an internet site also accessible with the jurisdiction of the court seised”. However, the Court clarifies that “that court has jurisdiction only to determine the damage caused in the Member State within which it is situated” and cannot substitute itself for the courts of other Member States which, in turn, are best placed to ascertain whether the copyrights protected in such States have been infringed and to determine the nature of the harm caused.