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Napster.no - Links to illegal MP3-Files

 

Transcripts of the Court of Appeals

 

The Circuit of Eidsivating

 

 

Judgement of March 3rd, 2004

 

Case no.: 03-000482ASI-ELAG

 

Senior Presiding Court of Appeal Judge; Mr Odd Jarl Pedersen

Court of Appeal Judge: Ms Inger Marie Dons Jensen

Court of Appeal Judge: Mr Vegard Sunde

 

Frank Allan Bruvik                                      represented by Magnus Stray Vyrje – lawyer

                                                                        Stray Vyrje & Co Law Firm

vs.

 

EMI Norsk AS                                                represented by Anders Mediaas Wagle - lawyer

Nordic Copyright Bureau                         represented by Anders Mediaas Wagle - lawyer

Universal Music AS                                            represented by Anders Mediaas Wagle - lawyer

Sony Music Entertainment Norway AS            represented by Anders Mediaas Wagle - lawyer

TONO                                                            represented by Anders Mediaas Wagle - lawyer

BMG Norway AS                                           represented by Anders Mediaas Wagle – lawyer

Accessory intervenient, IFPI Norway            represented by Anders Mediaas Wagle – lawyer


 

Facts of the case:

The case concerns allegations of copyright infringement and claim for damages in relation to such violations.

 

At the time of his studies of multimedia and web design in Lillehammer, Frank Allan Bruvik established a web page named “napster.no” together with two fellow students. The web page was used for various purposes. At some point, probably August 2001, hypertext links to illegal mp3-files were published on the Internet pages. Those who wanted to access the pages could type www.napster.no in the address field of their browsers and would then be directed to the front page of napster.no.

 

Bruvik assumed that the visitors of the pages would provide information on other web addresses to music files. From the front page the users could access another page called “Add an mp3-file” and write in the name of the artist, the title of the song and the address (URL) of where the files could be found. Bruvik’s web pages were programmed to run a script for generating new sub-pages of napster.no with a (hypertext) link to each of the music files in question. The script did not always work as it was supposed to do. If it didn’t work, Bruvik had to set up the pages manually. At its peak the pages of Bruvik contained over 170 music files.

 

napster.no had additional pages of their own. For example one page called “Most Popular”, or “Norway Top 20” which both would list the songs in question. The pages contained links to (URL) addresses of the music files. On another page called “Search for Music”, the users could write in the names of artists or songs and get access to pages containing links to the music searched for if the addresses had been included on the napster.no-pages. By clicking a link the users could normally chose between playing the file or download the file to their own computers from the address where the file was saved, or they could abort the process.

 

It was free of charge for the users to access Bruviks web page. The web pages contained ads placed on the front page. If the users accessing the pages clicked on the ads as well, it would generate an income for napster.no of NOK 1. - pr click. This generated a total income of about NOK 500.

 

The organisation of record producers, “IFPI”, became aware of the activity of napster.no about autumn 2001. On October 25th, the anti piracy coordinator of IFPI sent an e-mail to Bruvik “Regarding the publication of copied mp3-files by Internet”. At the same time he told Bruvik that it was illegal to make public on the Internet sound files, or to assist in such, regardless of whether the storage of the files where outside the territory of Norway or not. Bruvik was asked to stop the activities. However, Bruvik refused as he himself did not make accessible the sound files, but merely acted as a host (search engine) for files already made accessible on the Internet.

 

A new e-mail of October 26th, sent by IFPI threatened Bruvik that legal actions would be initiated unless the activities were stopped within 14 days.  Bruvik replied that his search engine could not be stopped and pointed out that similar pages in the US had been attempted shut down, however without success as the owners, like Bruvik, did not make accessible the mp3-files themselves but only provided hypertext links to files other people made accessible, by using a search engine. Bruvik asked which laws were violated, in order to have a lawyer review the matter. IFPI notified Bruvik the very same day that he would not have the time period allowed of 14 days to shut down the pages as legal actions would be taken immediately.

 

After being in contact with various lawyers, Bruvik shut down his pages as they informed him that the pages could be violating copyright law. So on November 20th 2001 he deleted all that contained links to illegal mp3-files. He did, however, keep napster.no as his homepage.

 

TONO (Norway's Performing Rights Society) and NCB (Nordic Copyright Bureau), on behalf of the copyright owners and the record companies EMI Norsk AS, BMG Norway AS, Sony Music Entertainment Norway AS and Universal Music AS, on behalf of the artists and the producers, thereafter initiated legal actions by filing a complaint within the court of conciliation. IFPI Norway and the Anti Piracy Group in Norway acted as accessory intervenient. The claim set forth was for NOK 500,000 as compensation for breach of the Norwegian Copyright Act (1961), Section 55. However, on February 13th, 2002, the case was referred to the district court as unsettled.

 

In the indictment of May 22nd, 2002 addressed to the district court of Sør-Gudbrandsdal, the claim for damages and compensation set to the sum of NOK 500,000 were upheld. During the court hearing the plaintiffs changed the statement of claim to a claim for damages according to the appraisement of the court.

 

The district court of Sør-Gudbrandsdal delivered a judgement on January 22nd, 2003 which stated:

 

1. Napster Frank Allan Bruvik represented by Frank Allan Bruvik is hereby sentenced to pay the plaintiffs a lump sum of damages set to NOK 100,000 – one hundred thousand Norwegian Crowners – with the additional interest rate of 12% per year until payment is done, cf. the Interest Rate Act (1978), Section 3, subsection two.

 

Legal costs were not awarded.

 

Bruvik appealed to the Appeals Court of Eidsivating. The respondents replied, but without submitting a cross appeal. IPFI maintained its position as accessory intervenient.

 

The hearing of the Appeals was held in the town of Hamar, January 27th till 29th, 2003.

 

Bruvik submitted the following arguments:

To publish hypertext links is not an action relevant to copyright law. If the links are regarded as displaying or making accessible the copyright protected work publicly, it will also include links to any copyright work, which is displayed on the Internet with the consent of the copyright holder. A link must be regarded as a footnote or a source listing. The purpose of a link is to refer the user to a site where the material can be found. That using a hypertext link as reference cannot be regarded as a performance of copyright protected material. The right to freedom of expression will be violated if linking in general is regarded as public display of copyright protected work.

 

Bruvik has not acted in such a manner, as is a mandatory requirement for liability and compensation. He himself did not publish sound files on the Internet and has not contributed to such uploads. He has accomplished in the users downloads. However, downloads like these are not illegal when meant for private use, cf. Copyright Act (1961) Section 12. The files were already made public at the time that Bruvik got involved. As such, this cannot be regarded as a positive action to make public sound files as these already were made public by other users on the Internet. Linking is not a new publication.

 

There exists no causal link between the actions of Bruvik and the alleged loss for the Respondents. Even if you imagine the hypertext links on Bruviks site as non-existent, the public would still have access to the music on the Internet. It must be those who actually made public the files initially that are responsible for compensation a loss for the Respondents.

 

In reality it was the users who published the links. The users had the addresses of the sound files in question and as well were the ones who wrote in the address on the Internet site called “Add an mp3-file”. An auto script on napster.no generated the link. Bruvik cannot be held responsible for not removing or assisting in removing links to copyright protected material. The general idea at that time was that links to copyright protected material, even music files illegally submitted on the Internet, was not forbidden by law. In addition, the general idea was that downloads of such files for private use was legal.

 

Napster.no must be regarded as functioning as a bulleting board for links to music files. It had not the intention of contributing to copyright infringements. Unless Bruviks actions of gross negligence, he must, as he acted as a web host, be free of responsibility as stated in the EU Directive of electronic commerce, dir. 2000/31/EF of June 8th 2000. The directive must be applicable to Norwegian law as well. Bruvik cannot be found as acting in negligence. In addition, the actions were terminated shortly after he received the protests from IFPI. Not until this moment was Bruvik urged to review the legal aspects of the actions on his web site. He consulted several lawyers and terminated the web site as he realised that the lawyers were doubtful as to the lawfulness of his actions. Bruvik must therefore be exempt from liability.

 

If the Court finds that legal basis for liability is present and that damages will be awarded, the amount must be set to a maximum of NOK 15,000. Each visit on the pages generated a number of hits, which means that the number of visitors and hereby the number of downloads must have been far more limited in amount than the claims set forth by the Respondents. In addition one cannot assume that each download equals a loss in the sales of music. Documentation of control costs has not been provided. Bruvik has not received any profit.

 

Bruvik has set forth such statement of claim:

 

1. The Court of Appeals must find in favour of the Appellant. Alternatively he is found liable for compensating damages according to the appraisement of the Court, with the addition of interest rate in accordance to the Interest Rate Act (1976), Section 3, subsection one, until payment is done.

 

2. The Respondents must pay, in solidum, legal expenses for all the courts, with the addition of interest rate in accordance to the Interest Rate Act, Section 3, subsection one, until payment is done.

 

The Respondents submitted the following arguments:

Bruvik has violated the Respondent’s copyright according to the Copyright Act and must therefore be liable for damages according to the Copyright Act Section 55.

 

The home page hosted by Bruvik was made available for the public and must in reality be regarded as a copy central for music made public without the consent of the copyright holder. Bruvik was in charge of both the web pages and the links published. He was no technical middle man or web host free of liability according to the Directive of electronic commerce. He cannot be excused with a mistake of law. In general, people knew at the time that activities as those of napster.no were illegal, or that at least barely legal.

 

Bruvik made accessible for the public, copyright protected work and has therefore violated the Copyright Act Section 54 by copyright infringement according to the Copyright Act Section 2 and the rights of the producers and the artists according to part 5 of the Copyright Act. As a copyright infringement, would as well contribution to injury, be regarded as such, according to the Copyright Act Section 54, subsection two. The rights of the copyright holders are protected by international conventions regardless of territory. The protection according to the Copyright Act Section 54, subsection one, litra d is not limited by territory.

 

To make accessible copyright protected material is illegal regardless of technological developments. All display of such material by others than the copyright holder himself will be a violation of copyright as long as the display of the material is outside of the private room, regardless of medium used. Only when required by imperative social needs, or otherwise not violating the financial interest of the copyright holder by any means, exceptions to the rule might be possible. The exclusive rights of performance, display and distribution of copyright protected material must be interpreted in view of this. The term “performance” has been under pressure as the other terms public display and distribution are both closely interlinked with a physical copy of copyright protected material, as for example a CD.

 

To make music accessible in a computer network must be regarded as a “performance” of the work. Each time a piece is being broadcasted or rendered by using any method a “performance” of the work is taking place. Bruvik’s activities must be deemed as unlawful performance in accordance with Swedish and Danish case law. The Copy Right Act is a result of a Nordic cooperation and the term performance must be interpreted in the same way as in the other Nordic countries.

 

Both the copyright holder and the record companies and the artists may claim compensation according to the Copy Right Act Section 55. The requirement in Section 54, subsection one, litra d is thereby met by and with the action of upload of unlawful copies. Compensation can be set according to general rules as stated in subsection one or according to subsection two regarding the compensation rule based on enrichment. The copyright holders must alternatively be allowed to claim the same amount of money compensated, as a normal sale by his consent would generate.

 

The Respondents have had a financial loss due to a reduced sale. Based on the numbers presented and the information on the number of visitors of napster.no an estimated loss must be set to NOK 40,000. The loss per download must be equal to the loss for marginal contribution of each non-sale set to NOK 15 per CD single. In addition must be added a loss per album not sold. The holders of the rights must as well receive a compensation for control costs accumulated due to the activities on the web pages of Bruvik. It is important to set a warning example for financial liability. The compensation should not be subject to mitigation.

 

The Respondents have set forth such statement of claim:

1. The Judgment of Sør-Gudbrandsdal District Court in case no. 02-00203 A paragraph 1 is upheld.

 

2. Napster Frank Allan Bruvik v/ Frank Allan Bruvik shall compensate TONO, Norway's Performing Rights Society, EMI Norsk AS, Nordic Copyright Bureau, Universal Music AS, Sony Music Entertainment Norway AS, and BMG Norway AS legal costs for all courts with the addition of interest rate of 12% per year, as of 14 days following the pronouncement of the judgment of the appeals court until payment is done, cf. Interest Rate Act, Section 3, subsection one.

 

The decision of the Court of Appeals:

The Court of Appeal has come to a different conclusion than the district court and which reads as follows:

The question of whether Bruvik through his activities on the web pages of napster.no has acted in such manner that violates the copyrights of the Respondents according to the Copyright Act, and which incur liability. The Appeals Court, will, according claims as set forth by the parties herein, start with Section 55 in the Copyright Act which states that “damages caused by violations as stipulated in Section 54 (….) can be demanded compensated according to ordinary rules for compensation. “ The Copyright Act Section 54 is stated as a criminal offence, and as such, it is required that Bruvik has acted as described in Section 54 of the Copyright Act.

 

It is the reference to Section 2 in Section 54 subsection one, litra a, which must be relevant in relation to the composers’ and copywriters’ rights. It states that the copyright holders have the exclusive economic rights of intellectual property, by producing copies and by making it public. The Copyright Act Section 2 does not regulate rights for performing artists and producers. However, these have rights protected by the regulations as stated in the Copyright Act Section 54, subsection one, litra d, cf. Section 42 and 45, which stipulates performance and public display as a criminal offence “if the copies have been produced in non-compliance with the rules herein…”. This means that the question for copyright holder, and the performing artists and the producers, is whether Bruvik by publishing the hypertext links displayed the mp3-files and thereby violated or committed such infringement as protected by law.

 

The Court of Appeals finds that copyright infringement violating the rights of the copyright holders were committed when the works were made accessible for the public by those who uploaded the files to an open network of computers. For violations of the rights of the performing artists and the producers it is in addition required that the upload consists of a reproduction of the copyrighted work by using an initially non-legal copy of the work. The Court of Appeals presumes that an act by anyone when copying the files of a CD and thereafter uploads the files and convert them to mp3-files, and then make the files accessible in an open computer network, is regarded as a reproduction outside the private room. An illegally uploaded mp3-file must be regarded as reproduction in accordance with the Copyright Act Section 2, subsection two. The terms in Section 54, subsection one litra d, regarding publication based on illegal copies, are thereby met.

 

It has not been argued that Bruvik has reproduced or contributed to such reproduction of illegal copies. The minimum requirement of a possible liability is that Bruvik by publishing the hypertext link to the uploaded files has committed an act of illegal publication of the music files.

 

The Copyright Act Section 2, subsection three reads:

”By ”publication” is meant the distribution of copies or phonorecords of a work to the public by performance, sale or other transfer of ownership, or by rental, lease, or lending, outside the private sphere.

 

According to the Act a publication may be done by performance of the work or by distribution of copies or by public display. Of the different alternatives the Respondents have argued the term “performance” as the method used for publication. The typical concept of a performance would be a live performance with a public present to a concert etc. In the preparatory works to the Copyright Act a transmission to a digital network is not mentioned. But the preparatory works presuppose a broad interpretation of the Copyright Act Section 2, see Ot. prp. nr 26 (1959-60).

 

“The exclusive right to make public the works includes according to the delegated rights “any method used whereby the public are given access to the work, either in part or completely, for example by publication, public recitation, performance, exhibition, broadcasting, television and presentation through speakers, cf. Knoph pages 92-93”.

 

The preparatory works, Ot. prp. nr 85 (1997-98) relating to the execution of the EU directive regarding legal protection of databases, states on page 16, first column:

 

”If a copyright protected work is placed on public display by the use of a digital network, this will be regarded as an action protected by the exclusive rights of the copyright holder, regardless of method used either in relation to public performance or by distribution of copies. By a public performance is normally meant that works are made accessible through open networks as for example the Internet represents.”

 

The Court of Appeal finds that those who uploads and make accessible copyright protected musical works to an open network have made the work public by public performance and thereby displayed the work to a large number of receivers. The uploader has both made an illegal copy of the work and made an illegal public performance of the work. The Respondents have, however, not sued the uploaders. However, instead they have sued Bruvik, who has published links to the music files made accessible by the uploaders. The crucial question is therefore whether Bruvik himself has made the files accessible to the public by a public performance.

 

The activities of Bruvik relied on other persons giving napster.no information as to the location of web pages’ containing illegal music files. By using scripts on napster.no automatic links were generated to the music files in question. The core matter in this case is that those who visited Bruviks site, the users, got direct access to the music files by clicking the links presented by Bruvik. The download from the site where the music files were stored, started automatically. The user was given the option of playing the music, download the music or abort the download.

 

There is no Norwegian case law concerning this question in particular. The relationship between hypertext links and public performance was considered in a Danish and Swedish judgement.

 

The Supreme Court in Sweden has, in a judgement of June 15, 2000, in criminal case against Tommy Olsson, stated that publication of links to already existing music files must be regarded as an act of performance or contribution to such act. The Supreme Court bases its argument on the term “make accessible to the public”. They furthermore state that publication can be done by performance, display, or distribution of copies of the work. They then concluded that the activities of Tommy Olsson were not display of such work, and that the question would be if the activities could be regarded as a performance or distribution of the music works. However, distribution of copyright protected work is usually connected to the physical copy of the work. The Court therefore stated:

 

“The investigation regarding the links in question showed that visitors to the site of Tommy Olsson would be, by clicking on the links, immediately transferred to a music file. Thereby the files were displayed in public and ready to be transferred to the computer of the visitor. Olsson himself did not have any copied files nor did himself copy, or with the aid of others disposed any copies of the music works, which through this method was made accessible on the Internet.

 

The publication of the files by this method must therefore be regarded as one of “public performance”. To refer the activities as other means of publication is not the case here and will therefore not be regarded as a criminal offence in accordance with the principle of legality”

 

According to Swedish law is “a public performance of a sound recording”, not included as one of the exclusive “rights of the performing artists and the phonorecord producer”, who are the aggrieved parties in the present case. The Supreme Court concludes as follows:

 

” As Tommy Olsson’s activities must be find to qualify as a public performance or contribution to such, his actions cannot be deemed illegal”.

 

The Supreme Court concluded that the links at least could be regarded as contribution to public performance. However, the Court has not defined commencement and termination of the actus reus. But because of the facts of the case, this was not necessary as arguments for the result of the judgment.

 

The Western High Court in Denmark, judgment of April 20th, 2001, dealt with a similar question in a case concerning claim for damages. The defendant had published links on his home page which for when the visitor:

 

“would be by clicking the link, directed to a site where the requested music files where stored, and by an additional click could choose between either copying, or playing the file when the file was transferred or hiding the files on their own hard disk as chosen by the user himself.”

 

The defendant had to pay compensation for publishing direct links. The High Court found that

 

“by establishing direct links to the music tracks, which other persons illegally have uploaded, they have independently made the music tracks available to the public in a manner that can be compared to public performance, cf. Section 2 of the Copyright Act.”

 

The case did not define or limit the term public “performance” as including performance by using a computer network. Using an analogy would be hard to accept as the publication term, as defined in the Copyright Act, Section 2, subsection three is part of the actus reus which is decisive for the claim for compensation. Such interpretation must be read in compliance of the principle of legality.

 

As mentioned above the publisher of music files in an open computer network like the Internet, will be using the music work in such manner that the action must be defined as “public performance”. But the actions committed by Bruvik were not an action relevant to copyright as such. He himself did not use the files, and he did not store or copy the files. His actions consisted merely of reference to sites where the works already were made accessible. References of this kind cannot be regarded, in the opinion of the Court, as a public performance. The actions of Bruviks must be compared to those of a bulletin board containing addresses to uploaded music works. The linking itself did not involve a performance.

 

According to the Copyright Act Section 54, subsection two, anyone acting in contribution of other persons’ copyright infringement like illegal publication, could be liable for punishment. The criminal offence Bruvik has contributed to would be the public performance of the files uploaded by others. In the view of the Court, the actus reus of uploading files was terminated when the music itself was made accessible. The criminal offence, as such, was thereby terminated the moment the music was published on the Internet. The actus reus is not formulated as a static delict. The Court of Appeal cannot see that the uploader, after publication of the music on the Internet, is committing a new criminal offence. The Court finds it hard to say that the music is performed publicly anew each time a transfer is conducted by persons who knew the address or clicked on a link on another site and they initiate the transfer of the files from the site of the uploader and download to their own computers.

 

When the main action is terminated before Bruvik published his links to the music files, one lacks the necessary causal link between his actions and the main action. The actions of Bruvik cannot be regarded as contribution to such acts.

 

Bruvik did, however, contribute, by publishing his links, to playing or copying the music files from the uploader’s web page to his own computer. But this must be regarded as contribution to the action of the downloader. Such downloads for private use is not illegal, and cannot justify a claim for damages according to the requirements in the Copyright Act Section 55.

 

Liability for negligence has not been argued. A new submission regarding liability in relation to the Marketing Act has been prevented by the Supreme Court in an interlocutory appeals decision of January 20th, 2004.

 

The Court of Appeal hereafter finds in favour of Bruvik. The appeal of Bruvik has been sustained. The case concerns fundamental legal questions, which have never been tested before the Norwegian courts. Based on other court decisions by other Nordic countries as abovementioned, this must be regarded as satisfactory reason for admitting the case. The parties should each bear legal expenses, cf. the Civil Litigation Act Sections 180, subsection two and Section 172, subsection two. There is no reason to change the decision of the county court regarding legal costs.

 

The judgment is unanimous.

 

 

Conclusion of Judgement

1. The Court finds in favour of Frank Allan Bruvik.

2. The Court affirms the decision as decided by the County Court, part 2.

3. The Parties will themselves bear legal expenses as accrued before the Court of Appeal.

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In January 2005 Norway’s Supreme Court has ruled against the student. I will provide an unofficial translation of the decision soon. Check the news section for updates on the case.

 

 

 

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