Bittorent Loses Again Bittorent Loses Again A Recent Lithuanian BitTorrent Case and What It Means for the Construction of the E-commerce Directive by Rita Matulionytė, Dr., LL.M. (Munich), Deputy Director, Law Institute of Lithuania Mindaugas Lankauskas, Researcher, Law Institute of Lithuania. Abstract: This article first discusses a should be qualified as hosting services under Article recent Lithuanian BitTorrent case, Linkomanija, with 14 of the EU E-commerce Directive (2000/31/EC) and its shortcomings and perspectives. It then compares whether the application of the limited liability stan- the outcomes of the Lithuanian case with recent dard, as developed by the Court of Justice of the Euro- court practice in Scandinavian countries (the Swedish pean Union, would be reasonable for BitTorrent file- Pirate Bay and Finnish Finreactor cases). Finally, it sharing services in general. poses some questions as to whether BitTorrent sites Keywords: BitTorrent, File Sharing, E-commerce Directive, Intermediary Liability, Internet Service Provider, Hosting, Lithuania, Sweden, Finland, Linkomanija, Pirate Bay, Finreactor © 2013 Rita Matulionytė and Mindaugas Lankauskas Everybody may disseminate this article by electronic means and make it available for download under the terms and conditions of the Digital Peer Publishing Licence (DPPL). A copy of the license text may be obtained at http://nbn-resolving. de/urn:nbn:de:0009-dppl-v3-en8. Recommended citation: Rita Matulionytė and Mindaugas Lankauskas, BITTORENT LOSES AGAIN: A Recent Lithuanian BitTorrent Case and What It Means for the Construction of the E-commerce Directive, 4 (2013) JIPITEC 3, 179 A. Introduction: Copyright piracy holders) have been individually consulting and as- sisting members who are trying to protect their on- and enforcement in Lithuania line rights. Most disputes are solved through on- line notification systems and informal negotiation 1 Copyright enforcement in cyberspace (the Inter- procedures; hardly any infringement cases reach net) is an important and difficult-to-tackle problem the courts. The Lithuanian Anti-Piracy Association in Lithuania, as in the rest of the world. There are (LANVA), the association primarily focused on soft- no reliable statistics on copyright violation rates in ware piracy, has been more active and has initi- Lithuania in general. In regard to software, accord- ated several – unsuccessful – court proceedings in ing to the survey conducted by the Business Soft- the field. For example, in 2009 an individual user ware Alliance (BSA), software piracy in Lithuania ac- S. B. was accused of illegally downloading Micro- counted for 54 per cent of all software in 2011 (i.e. soft Windows 7 and making this software publicly more than half of the software has been acquired available on the Internet for non-commercial pur- and used illegally), whereas the commercial value poses using BitTorrent protocol. However, the case of unlicensed software had reached around 44 mil- was dismissed due to procedural violations.3 As an- 1 lion USD. In the regional context, Lithuania is not other example, in 2012 the German company Digi- unique, since the average piracy rate in Central and protect Gesellschaft zum Schutz Digitaler Medien 2 Eastern European countries is 62 per cent. In the mbH requested the main Lithuanian telecommuni- music and audio-visual sectors, online piracy levels cations company TEO to disclose the identities of are likely to be even higher. its customers for the purpose of starting proceed- ings against them for illegal file sharing. After TEO 2 The enforcement of online infringements in Lithu- refused to disclose the information, Digiprotect ap- ania is in its very first stages. The two main collect- proached the court. However, the Vilnius Regional ing societies in Lithuania (LATGA, representing au- Court rejected the request, stating that revealing thors, and AGATA, representing neighbouring rights 3 179 2013 Rita Matulionytė and Mindaugas Lankauskas such data to a private company would be contrary to produce or make copyrighted content publicly the personal data protection laws, and this data can available. However, the defendants allow users to only be collected by pre-trial investigation officers.4 reproduce and share such content without the au- thorization of the right holder: “The defendants’ un- 3 The first successful result in online copyright en- lawful actions consist of the fact that the defendants’ forcement was reached in the Linkomanija case. In file sharing service allows third parties to upload tor- November 2012, the Vilnius Regional Court issued rent files and provides a database of torrent files that a ruling that the company N5 and its manager, K.E., allows third parties to search for and download tor- were fully liable for contributing to copyright in- rent files…”. It was also pointed out that the defen- fringement occurring over the BitTorrent <www. dants support the functional operation of the Link- linkomanija.net> website.5 Although the process is omanija website knowing that users are constantly not over (on 14 January 2013, defendants appealed infringing copyright and neighbouring rights, thus the case to the Court of Appeal), this ruling may be promoting such illegal activity and receiving a direct a sign of a tougher stance towards online copyright commercial benefit from it. Consequently, pursuant protection in Lithuania. to Article 6.246(2) of the Civil Code of the Republic of Lithuania6 and case law of the Supreme Court of 4 This article will provide a more careful look at the Lithuania,7 the court found that the defendants, by weaknesses and perspectives of the Linkomanija case enabling reproduction and dissemination of illegal (part B). We will then briefly discuss what the Link- computer programs, indirectly made them publicly omanija case and other recent European BitTorrent available. That is, the defendants are not accused of cases (the Swedish Pirate Bay and Finnish Finreac- directly committing copyright infringement. Rather, tor cases) mean in a broader European context, and they are responsible for contributing to the infringe- whether the limited liability regime as provided un- ment based on the fact that they knew about the il- der the EU E-commerce Directive should apply to legal activities occurring on their website and en- such cases (part C). couraged them. 7 Generally, the position of the court regarding the B. Linkomanija case: a right defendants’ unlawful conduct looks reasonable. The or wrong solution? “Linkomanija Project” was broadly known in Lith- uanian society as basically designed for the illegal sharing of copyrighted content. On the other hand, 5 The Linkomanija case is a typical example of cases the court’s reasoning is weak (or non-existent) on dealing with BitTorrent file-sharing services. The certain aspects. First of all, it is not clear how con- <www.linkomanija.net>website enables users, with crete the knowledge about illegal activities of us- the help of BitTorrent protocol, to download vari- ers should be. The court does not specify whether ous (mostly illegal) content, including illegal copies general knowledge about continuing violations is of computer programs. The website contains a data- sufficient or whether the defendant must be aware base of torrent files and a search function that gives of concrete infringing cases. Second, although the users the opportunity to connect with each other court notes that the defendant was commercially and exchange content they store on their comput- benefiting from this conduct, it remains unclear ers. Using torrent files and the information of the whether this is a mandatory condition of interme- central station, it is possible to copy and distribute diary liability or a complementary one. Will the In- illegal copies of music, video works or software. Mi- ternet service provider still be considered liable if crosoft Co., the right holder of various computer pro- s/he does not acquire commercial benefit from il- grams illegally shared by users, requested the court legal activities? Third, the content of “promotion” to stop the illegal dissemination of software by clos- of infringing conduct is not revealed either. Does a ing down the <www.linkomanija.net> website; it also mere creation of a virtual platform intended for file requested the operators of the website to pay max- sharing qualify as “promotion” of illegal conduct by imum statutory damages equivalent to 130,000 LTL end users? Or, rather, do more specific acts of pro- (approximately 37,680 EUR). On 10 December 2012, motion need to be proven? Also, there is no explana- after more than three years of trial, the Vilnius Re- tion as to what actions could be deemed “discourag- gional Court decided to fully satisfy the claim. Atten- ing” (as opposed to promotion) of the illegal conduct tion should be drawn to the interpretation of several (warning on liability for sharing of illegal content, important issues in the case. content filtering, disclaimers, etc.). The court’s rea- soning regarding these aspects remains somewhere “between the lines”. At the same time, these issues I. Unlawful activity may be important for future cases of a similar na- ture. Other service providers who may be willing to 6 First, the court examined whether the defendants’ develop legitimate online services are facing a diffi- actions should be considered illegal. The court found culty in understanding what kind of actions should that the defendants themselves do not directly re- (or should