Online marketplace liable for Manhattan Bridge image copyright infringement

Frankfurt-based Dr Nils Rauer of Pinsent Masons, a specialist in copyright law in the digital world, was commenting after the business behind the ‘R2’ online marketplace in Germany was found liable for infringing copyright subsisting in a photograph of the Manhattan Bridge in New York, which had displayed on the platform as a product illustration for portable televisions sold by a third-party retailer.

Rauer said it is the first time a German appeal court has determined that an online marketplace can be held liable for copyright infringement on the basis of case law developed by the Court of Justice of the EU (CJEU) – the EU’s highest court – in 2021, which emerged from copyright claims raised in Germany against video-sharing platform YouTube and file-hosting and -sharing platform Cyando.

In its judgment, the CJEU said that a platform can be liable if it fails to put in place "the appropriate technological measures that can be expected from a reasonably diligent operator in its situation in order to counter credibly and effectively copyright infringements on that platform".

The EU law considered by the CJEU in that case has since been supplemented by a new Digital Single Market (DSM) copyright directive, which contains specific provisions governing platform liability.

Article 17 of the DSM directive states that platforms which allow users to upload digital content can be held liable if that content infringes copyright. To avoid liability, Article 17 requires the platforms to make “best efforts” to either obtain a license for the material or block unauthorised content. They must also act expeditiously once appropriately notified by a rightsholder to remove or disable unauthorised content and use "best efforts" to prevent future uploads. Measures to block illegal content may include ‘upload filters’ - software which uses an algorithm to filter the content.

Rauer said what is noteworthy about the new ruling by the Nuremberg Higher Regional Court is that it has confirmed that the principles of liability that were established by the CJEU in respect of content published by users of video- and file-sharing platforms apply equally to online marketplaces in respect of content made available to the public by retailers.

Rauer said: “In this case, the operator of the online marketplace received a warning letter that explained that the image was being displayed without the authorisation of the copyright owner. The operator was therefore made aware of the infringing action of the merchant. However, the operator failed to take any action. Because of its inaction, the operator was considered to assume liability for the act of making available to the public the copyright-infringing image.”

“The court did not rely on the new German copyright law implementing Article 17 of the DSM directive as that law was not enacted at the time the relevant acts to this case took place. However, the court did apply the principles set out in the CJEU decision of 2021 and thereby reaches the conclusion that the operator of the online marketplace is liable – along with the merchant,” he said.

“The decision is not surprising, but it will have an impact on what online marketplaces need to do in order to avoid liability. They need to implement mechanisms to ensure that content may be removed if complaints or warning letters come in. This requires the terms and conditions for using the platform to be drafted in a way that permits the operator of the online marketplace to perform such take-downs in respect of content published by the merchant, as well as the implementation of technical processes that enable such take-downs to be performed expeditiously,” Rauer said.