Wed, Aug. 08, 2018

Republishing an Internet Photo Without License

CK - Washington. Under German law, a photographer authorized a travel website to publish one of his photos. A student copied the photo and integrated it into a school paper. The school published the paper with the photo on the internet. The photo­gra­pher sued the state for damages under copyright law. On August 7, 2018, the Euro­pe­an Court of Justice in Luxembourg as the final appeal decided the matter under Ger­man law and the E.U. copyright harmonization regulations.

The court found in favor of the plaintiff after the German Federal Supreme Court for Civil Matters in Karlsruhe had referred the matter to it. The fact that the travel website does not restrict visitors will not reduce the right of the copyright owner to control which permissions to attach to his copyrighted work. The republication by the state-run school is unau­tho­ri­zed because every website addresses a new audience. A copyright owner may have a particular audience in mind when granting a license; publication to another audience requires a new license -- at the owner's discretion.

The court distinguished the republication from linking to the original publication. It states that linking is an essential fea­tu­re of the the world wide web. Linking is a fea­tu­re that supports the essential purpose in harmony with copyright law, while co­py­ing and republishing frustrates that harmony, see (a) Press Release Land Nordrhein-Westfalen / Dirk Renckhoff (b) Application and Decision ECLI:EU:C:2018:634.

Sun, Mar. 04, 2018

Invoicing Germany: AirMail or EMail?

CK - Washington. Bills used to be mailed, and airmail would take four days. With the onset of scannable invoices and the increasing acceptability of electronic mail, email became the more efficient mo­de of transmission. However, some recipients believe scans to be incompatible with tax and accounting requirements and insist on a mailed original invoice. A German court re­cent­ly held an original unnecessary: An emailed scan is acceptable under the tax rules it usefully cites.

A customer had claimed a right of retention based on the alleged insufficiency of an emailed scan of an invoice, arguing that only the original could render the invoice due and payable. The Aachen District Court disagreed and on January 9, 2018 issued its de­cision under docket number 41 O 44/17, available in German from the North-Rhine-West­fa­lia justice portal. The court lists the applicable tax regulations as well as court de­ci­si­ons including a 2017 ruling by the Supreme Court for Tax Matters.

Fri, Feb. 23, 2018

Recognition of Judgment with Statutory DMCA Damages

CK - Washington. Statutory damages under the Digital Millennium Copyright Act can have a punitive effect, resulting in a denial of recognition in a foreign court where the legal system finds punitive elements incompatible and grossly violative of civil action principles, a German court decided in response to a petition to freeze assets of a Ger­man company in favor of a U.S. company that had obtained a default judgment for some $8 million in California under the DMCA.

The Leipzig district court explained on February 19, 2018 in docket number 05 O 3052/17 -- presumably, per defendant's counsel, Marian Härtel, Blizzard En­ter­tain­ment Inc. v. Bossland GmbH -- that a recognition matter does not allow the Ger­man court to replace its judgment with that of the foreign court. It would need to re­spect the international principles on recognition which include public order/ordre pub­lic con­si­de­rations. In this case, the default judgment lacked any explanation of the as­sess­ment of statutory damages; the plaintiff had opted under the DMCA to forego ac­tu­al damages; the number of alleged violations was a mere estimate; and the total of ag­gre­ga­ted da­ma­ges reached an extreme with punitive character.

The court considered American analyses of compensatory damages law as well as of pu­ni­tive, exemplary and statutory damages law, concluding that statutory DMCA da­ma­ges can, and in this case do, contain a degree of punitiveness which bars recognition as an incompatible form of damages. Noting that the U.S. default judgment stated that the damages award­ed we­re not punitive, the court analyzed that statement with a result di­stinguishing the elements of a punitive nature in Germany from that in the United Sta­tes.

Tue, Dec. 26, 2017

German Law Firms Fear Compromised IT Systems

CK - Washington.   For years, the federal legislator and the mandatory federal bar prepared German lawyers for the unified digital day: On January 1, 2018, they are supposed to use a new e-filing system with courts and agencies. BEA, the special attorneys digital mailbox, was planned to be super-safe and secure.

Many attorneys had misgivings over the quality of the JAVA-based software, the user interface, the sufficiency of supporting central server systems for the onslaught in January, and the lack of features enabling multi-attorney firms to efficiently work with the system.

The day before Christmas Eve, all dreams were shattered when news circulated widely that the Bar as administrator of the system had not only retracted security certificates under false pretenses but also instructed all lawyers to install a new security certificate which includes both the public and the private keys, thus rendering vulnerable all systems with the diligently-installed new certificate.

Over the holidays, the news spread even wider, and by now, any decently-qualified hacker will know how to infiltrate the IT systems of many German lawyers. The Bar has limited its response to turning off the system for maintenance and issuing a misleading press release. Whether and how many law firms have suffered attacks or losses as a result of the incredible failure of the Bar is presently unknown.

Thu, Sep. 28, 2017

Privacy: Data Collection, Storage, Use, Sharing and Loss

CK - Washington. The continued Equifax data breaches that by now affect half the Ame­ri­can population puzzle consumers who do not know if their financial and per­so­nal da­ta are lost. By contrast, Germans and most Europeans benefit from data trans­pa­ren­cy laws designed to protect their privacy and guide all who commercially collect, sto­re, massage and share data. A new European data directive, effective May 25, 2018, go­verns rights and obligations relating comprehensively to such data activities.

Consumers will receive detailed information on the intended activities when granting companies access to their data. They will receive additional disclosures after a com­pa­ny stores data and intends to use it for other than the original purposes. Dis­clo­su­res to con­su­mers must be clear and intellible for a lay person. Technical or le­gal jar­gon in­com­pre­hensible to average consumers will be outlawed: The binding re­gu­la­ti­on even sug­gests 15 words per sentence, separated by not more than one com­ma. Information must be provided free of charge to the person who owns it. That alo­ne is a far cry from the practices of some American data hoarders who persistently ig­no­re what a Secret Ser­vi­ce director advised more than a decade ago: Don't hoard data be­cau­se they leave you and all Americans vulnerable.

Regulation (EU) 2016/679 on the protection of natural persons with regard to the pro­cessing of personal data and on the free movement of such data, known in German as Datenschutz-Grundverordnung, lists information and reporting requirements and may increase burdens on entities that process personal data in any way. The above dis­clo­sure requirements may be more difficult than some of the other obligations, but en­ti­ties with prior exposure to the data protection directive 95/46/DC which will ex­pi­re can build on their experience.

Art. 21 defines a consumer right to object meaningfully to the collection of data, and Art. 35 requires the notification of consumers following a risk-intensive data breach. A key objective is the assurance of disclosures at the earliest possible time and by active con­duct of the data collector and processor.

In addition to active disclosures, consumers have a right to passive or responsive ac­ti­on by the data holders. The latter must respond to consumer inquiries about data held or transferred as well as requests to transfer data.

The European Union expects to achieve additional transparency and compliance by esta­bli­shing reporting requirements. Beneficiaries may be government agencies but third par­ties may also benefit, such as under the right-to-forget rules in Art. 17(2) about expunging published data.

The regulation may be implemented differently in the various E.U. member states. What­ever the national implementation, companies involved in the collection, sto­ra­ge, processing and dissemination of consumer data need to consider the fun­da­men­tal-right statement at the beginning of the new regulation:
The protection of natural persons in relation to the processing of personal da­ta is a fundamental right. Article 8(1) of the Charter of Fundamental Rights of the European Union … and Article 16(1) of the Treaty on the Func­tioning of the European Union … provide that everyone has the right to the pro­tec­ti­on of personal data concerning him or her.
Germany has some of the strictest substantive and procedural data protection sys­tems, and the E.U. update will likely enhance the comprehensive consumer data sche­me. This summer, German law journal Kommunikation & Recht published some articles from a conference on data protection on the regulation, including Transparenz als Her­aus­for­de­rung: Die Informations- und Meldepflichten der DSGVO aus Unternehmens­sicht by attorneys Michael Kamps and Florian Schneider.

Sun, Sep. 24, 2017

Privacy: Lawyers to Outsource Cloud, Office Services

CK - Washington.   Beyond the confines of privacy laws, criminal law and professional codes constrain the disclosure of data by lawyers and other professionals. In light of §203 of the Criminal Code, professionals may be prosecuted for outsourcing janitorial work, secretarial help and certainly uploading client data to cloud services.

On September 22, 2017, the second chamber in the German parliamentary system, Bun­des­rat,composed of representatives of the 16 states, consented to a change al­rea­dy passed in the Federal Diet, Bundestag, in Berlin. The long title of the new statute, Ge­setz zur Neuregelung des Schutzes von Geheimnissen bei der Mitwirkung Dritter an der Berufsausübung schweigepflichtiger Personen, is descriptive: Statute to up­da­te the protection of secrets with the participation of third parties in the exercise of the pro­fes­si­on by per­sons bound to secrecy.

The statute amends §203 and guides access to data by employees and third parties who assist professionals. Such persons will be subject to the same constraints as the professions that engage them, for disclosures of protected information learned in pro­vi­ding their services. In addition, the statute imposes on the professionals certain ob­li­ga­tions to safeguard the information in relation to their help.

Sat, Sep. 23, 2017

No Copyright Infringement in Image Search

LB - Washington.   Displaying third-party thumbnail-size images on a website does not result in a copyright infringement when a search engine displays them, the Ger­man Su­pre­me Court for Civil Matters in Karlsruhe decided in Perfect 10 v. AOL Deutsch­land on September 21, 2017.

The defendant offered a free image research feature and linked its website to the Go­og­le search engine. Visitors would click on the defendant's URL and use the search in­put field. Google had found some images on freely accessible websites and displayed them as thumbnails, and the defendant AOL showed these on its site. Some images found by Google had been downloaded illegally by plaintiff's clients who uploaded them to dif­fe­rent unrestricted sites.

The plaintiff alleged that the defendant infringed its copyright by displaying images it found on such sites and argued that §15(2) of the German Copyright Act af­fords the co­py­right holder an exclusive right to reproduce images in public. Whether or not the works were freely accessible should not be determinative.

The court rejected these arguments, explaining that §15(2) of the German Copyright Act implements Art. 3(1) of the European Guideline 2001/29/EG. The European Court of Justice had decided that a pub­lic reproduction assumes knowledge or that a pub­li­sher must have known of an illegal publication. The German court based its de­ci­si­on on freedom of speech grounds, informational concepts and the need for reliable links as important elements of the exchange of information on the internet. These con­si­de­ra­ti­ons apply also to links which provide access to search engines. The plaintiff had fai­led to prove that the defendant had to know of the illegality. The standard refutab­le pre­sump­tion of scienter would not apply to search engines and to links to them. Search engines are too important for the functionality of the internet. Their providers cannot be ex­pec­ted to examine the legality of all results within an automated search process, the court reasoned.

The decision may affect a new Google feature. Since 2017, it displays not only thumb­nails but also full-sizes images. The Court issued a press release, and the full decision should follow within a few months.

The German American Law Journal previously reported about similar decisions and le­gal issues in the United States, see Kochinke, Texte aus Webseite schürfen: Fair Use?, Mit­telstädt Verstößt die Bildersuche von Google im Internet gegen Urheber­recht?, and Kochinke Google liefert Kode, nicht Bilder.

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