UK: Home Or Away: The CJEU Confirms That Foreign Online Infringers Can Be Sued In Your Local Court

Your copyright is being infringed by an online company based outside the UK and you want to take action. Your first reaction may be to ask for local lawyer recommendations in the jurisdiction where the company is based, but is there an easier way?

The recent CJEU ruling in Case C-441/13, Pez Hejduk v EnergieAgentur.nrw Gmbh, may mean that there is.

Historically, the question of jurisdiction has always been a tricky one. The Brussels I Regulation (44/2001) (the Regulation) enshrines the key principle behind the issue: jurisdiction is usually based on the defendant's domicile, save in a few well-defined situations. This has often forced potential claimants to weigh up whether litigation in a foreign, unknown jurisdiction is worth the time and money. However, last month's decision by the CJEU held that a member state court has jurisdiction to hear an infringement action, due simply to the fact that the infringing copyright work is accessible online in that country. So such unattractive foreign proceedings may no longer be needed.

Background to Pez Hejduk v EnergieAgentur.nrw Gmbh The claimant, Ms Hejduk, an Austrian national and professional photographer, authorised the use of some of her photographs for a conference in 2004 organised by the defendant, EnergieAgentur (Energie), a German company.

Following the conference, Energie continued to use Ms Hejduk's photographs without consent and without providing a statement of authorship. The photographs were uploaded in Germany, but available to view and download from Energie's website.

Ms Hejduk decided to take action in the Austrian courts, demanding damages in the sum of EUR 4,050. Energie objected to the Austrian court's jurisdiction on the grounds that it is a German company, with a website directed at a German audience and, in addition, the act of uploading the photographs took place in Germany. The Austrian court referred the question of jurisdiction to the CJEU for a preliminary ruling.

Question referred to the CJEU In essence, the local court asked whether the Regulation can be interpreted as providing jurisdiction to a member state court, where a claim is brought for infringement of copyright by virtue of the fact that the infringing photographs were accessible online in its territorial jurisdiction.

Judgment of the CJEU In its judgment, the court stressed that the Regulation's key principle that jurisdiction is based on the defendant's domicile should be autonomously and strictly interpreted. However, Section 2 of Chapter II of the Regulation allows for certain intellectual property cases to be brought in "the place where the harmful event occurred or may occur".

Relying on the previous case of Coty Germany1 , the court determined that this exception, set out at Article 5(3), provides jurisdiction to a court on both the basis of (i) the place where the damage occurred and (ii) the place of the event giving rise to it. It is therefore up to the claimant to elect in which of these jurisdictions to bring its action.

While the court accepted that the causal event of the damage (i.e., the uploading of the photographs) took place in Germany, it considered that this was not relevant in determining jurisdiction. Furthermore, based on previous case law including Pammer and Hotel Alpenhof2 and Pinckney3, the court considered that the Regulation does not require the website, which had a .de country code domain name, to be "directed to" an Austrian audience. On this basis, the court determined that the mere accessibility of the copyright works in Austria meant that the Austrian courts did have jurisdiction to hear Ms Hejduk's claim for copyright infringement.

Crucially, the court did impose one major limiting factor on this jurisdictional basis. It determined that although a national court is best placed to judge whether the rights guaranteed in that country had been infringed in accordance with the national implementation of the Information Society Directive4, it could only rule on and award damages in respect of infringement which took place within that territory.

Implications of the judgment On first inspection the judgment looks to be a positive one for copyright holders. Indeed, while this case concerned photographs, it is thought that its principles will be applicable to all kinds of unauthorised postings online of copyright works and indeed of other unregistered intellectual property rights. However, the flexibility that the decision provides to rights holders to choose in which jurisdiction to bring a claim is significantly undermined by the fact that recovery is limited to damages for infringement within that jurisdiction alone. Local actions may be appealing on the basis of familiarity and relative predictability but, unless the defendant is domiciled in that member state, this ruling does not offer a pan-European resolution.

Given the limitation of damages, rights holders will have to think carefully about where to commence litigation. One foreseeable issue is that without information on the quantum of damages in any member states where infringement has occurred, potential claimants will find it hard to weigh up where it would be most advantageous to bring a claim.

In addition, while some rights holders may be satisfied with a local court victory for a limited sum of damages, a rights holder may then have to face the frustration and added cost of trying to enforce that decision in the domestic court of the defendant.

In spite of its limitations, it is foreseeable that the decision may encourage some forum shopping in this area. However, our advice to such shoppers has to be, caveat emptor!

Footnotes

1.Case C-360/12.

2.Case C-585/08.

3.Case C-170/12.

4.Directive 2001/29/EC.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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