Handelsgericht gives surprise YouTube judgment

There has been much debate in recent years as to whether websites that host user-submitted content should be liable for intellectual property infringements committed by the display of that content. Rights holders (perhaps unsurprisingly) favour an approach where a website is liable, but the websites themselves (and their advocates) argue that such an approach would stifle content availability irrespective of whether IP rights were threatened.

EU law is clear on the matter. By Article 14 of the e-Commerce Directive 2000/31/EC, a website that offers a technical function in storing data of other parties (for example Facebook, Pinterest, Tumblr etc.), the website shall not be liable for the breaches provided that it does not have actual knowledge of the illegal activity, and upon obtaining such knowledge the website acts expeditiously to remove or disable access to the content.

In a ruling this week, however, the Austrian commercial court, Handelsgericht, has held that YouTube is not a "neutral host", and that it must prevent third parties from uploading copyright infringing material proactively. The case was brought by Austrian TV channel Puls 4, after content from its shows was uploaded to the platform.

YouTube has argued that it provides the technical service required to fall under Article 14, and therefore benefits from the so called "Safe Harbour" rule. The court has decided that YouTube does not provide a technical function, but that its activity in "sorting, filtering and linking" content aids in determining the behaviour of users and directs them to particular content.

The decision is preliminary, and will only become legally binding if upheld. If it is upheld we can expect to see a swift and robust appeal, as the consequence of this ruling becoming binding would lead YouTube (and other sites) to have to proactively scan all videos for copyrighted materials not belonging to the uploader before publication on the site.

We will be keeping an eye on the outcome of this case, as it could have far reaching ramifications and cause a significant disparity between US and EU law.

If you have any questions on the above, please do not hesitate to contact the team at McDaniel & Co. on 0191 281 4000 or legal@mcdanielslaw.com.