German Court determines the limits of private copying

Legal Kat copy

The IPKat is delighted to receive and publish the following guest post by former GuestKat Mirko Brüß on a recent German decision on private copying and ... radio stream ripping.

Here's what Mirko writes:

"After 14 years of legal quarrel around the scope of Germany’s private copying exception, there still is no end in sight for copyright owners and businesses trying to make a profit from it. On January 17th, 2019 the Higher Regional Court of Hamburg added another piece to the puzzle, finding the “radio stream ripping” service ZEEZEE liable for copyright infringement (case No 5 U 18/17). 

At the centre of the more than a dozen German cases regarding stream ripping is the reproduction right, as granted to (amongst others) film and phonogram producers by Art. 2 of the InfoSoc Directive (2001/29/EC). Member States may provide exceptions and limitation to this exclusive right in the cases listed in Art. 5 of the directive. Germany has chosen to do so and implemented limitations in section 53 of the German Copyright Act (§ 53 UrhG). The relevant parts state that 

it shall be permissible for a natural person to make single copies of a work for private use on any medium, insofar as they neither directly nor indirectly serve commercial purposes, as long as no obviously unlawfully-produced model or a model which has been unlawfully made available to the public is used for copying. A person authorised to make copies may also cause such copies to be made by another person if no payment is received therefore, or if it involves copies on paper or a similar medium which have been effected by the use of any kind of photomechanical technique or by some other process having similar effects. 

ZEEZEE’s business model depends on the interpretation of this exception, and the service may have to make dramatic changes or shut down, if the new decision is confirmed by the FCJ (it is currently unknown if ZEEZEE has chosen to appeal the decision). ZEEZEE offers a subscription that enables users to add songs to a “wish list”. According to ZEEZEE, this activates an automatic process which first searches hundreds of web radios for the requested title, then records the song and stores the copy into the user’s online “locker”, from where it can later be downloaded, only by this specific user. 

The plaintiff in this case did not believe that the service operates this way, but instead alleged that the company keeps “master copies” of the songs on its servers and enables users to access these copies after they were requested. To substantiate this claim, the plaintiff demonstrated that a number of test downloads always produced the complete songs from beginning to end and never had any ads or voice-over announcements, suggesting that they were not recorded from web-radios. Furthermore, on several occasions the plaintiff had obtained MP3s with identical hash-values (= identical files), even though the songs were requested from different user accounts at different times. According to the plaintiff, this would be technically impossible to obtain identical files when recording a song from a web radio on different occasions. 

The court found that if this alleged mode of operation was true, ZEEZEE would indeed make illegal reproductions of the songs. Such copies would neither be single copies made by a natural person for private use, nor would they represent copies for which no payment is received. Therefore, the private copying exception would not apply and, lacking a licence, ZEEZEE would be liable for copyright infringement. 

Interestingly, the court did not rely on this alleged ‘modus operandi’ but instead examined the facts alleged by the defendant, ultimately coming to the same conclusion that the private copy exception does not apply to the copies in question. 

Kat enjoying some music

To get there, the court focused on the question who actually “makes” the copy, because only (private) copies made by a natural person are privileged under section 53 of the German Copyright Act. If the copies are made by a third party, this party may not receive any payment for doing so in order for the exception to apply. 

Past decisions focused on who “pushed the button” and found that when a completely automated process is initiated by the user, then the user has to be considered as the “maker” of the copy (FCJ, case No I ZR 216/06 ­­– Internet Videorecorder). Now, the Hamburg judges applied a broader and more differentiated view, highlighting that ZEEZEE’s users do in fact “push the button”, but that ZEEZEE business model goes beyond providing a mere technical tool to have the copies made. Instead, an important function of ZEEZEE is to find a legal source for the requested tracks from which the copy could be made. This would go beyond the intent of the private copy exception and leave ZEEZEE as the “maker” of the copy, by actively involving itself in the recording, the court found, citing the CJEU’s recent VCAST decision (see Katpost here). 

The court further pointed out that here, the user had no control over the time and the source of the recording. In cases where a certain song was available in different recordings, the user would not even know which version would be recorded, demonstrating that not the user was responsible for the copy, but ZEEZEE. The fact that ZEEZEE had set up its business in a way that all the steps happened automatically, without human interference once a user has made a request, would not result in a different assessment, since the control over what was recorded from where and when remained with ZEEZEE. 

Having established that the reproductions were made by ZEEZEE and not by the user, the court consequently denied a legal “private copy”, since it was undisputed that ZEEZEE did receive payment for its services, thus precluding the exception of Section 53(I)2. 

While the judgment only concerns the songs from a single album, it is clear that its implications affect the whole business model of ZEEZEE and other “stream ripping” services that operate in a similar manner. In fact, in November 2018, the Higher Regional Court of Munich found a competitor of ZEEZEE, MusicMonster.FM, liable for copyright infringement on very similar grounds (case No.29 U 3619/17). 

It is very likely that one or both cases will continue to the Federal Court of Justice. This GuestKat will keep you informed on any developments!"