The Internet Service Provider’s liability: Vimeo to pay 8.5 million to RTI

With the judgement published on 10 January (docket no. 23732/2012), the Court of Rome ascertained the liability of Vimeo LLC for the infringement of the related rights – under articles 78ter and 79 of the Italian Copyright Law – on TV programmes owned by Reti Televisive Italiane S.p.A. (RTI), in relation to the failure to remove several videos taken those programmes which were illegally uploaded to Vimeo by its users. The Court therefore ordered the website to remove all the infringed contents, prevent any future uploading of the same with a penalty of €1000 for any possible infringement, compensate damages evaluated at 8.5 million euros, reimburse legal fees and publish the decision.

The dispute, similar to others discussed here on this blog, began with an injunction sent by RTI to Vimeo, with which the Italian broadcaster reported that some audio-visual content taken from its TV programmes had been uploaded to the website and asked Vimeo to remove them. Vimeo deleted only the content with URLs provided and replied that it was not possible to remove the other disputed content without the prior indication of the related URLs. As a result, RTI sued the provider, claiming the non-integral removal of the files at issue.

In its defence, Vimeo firstly pointed out that, according to the European and Italian law (Article 15 of Directive 2000/31/EC and Article 17 of Italian Legislative Decree no. 70 of 2003), the Internet Service Provider (ISP) is not required to actively seek “the facts or circumstances indicating illegal activities“. Furthermore, according to the exemption from liability under Article 14 of the Directive and Article 16 of the Decree, the ISP is not asked to take action in order to stop and prevent the continuation of the illegal activity. In particular, Vimeo claimed that RTI’s warning letter was too broad and prevented it from knowing with sufficient accuracy which the illicit content was, forcing it to research it actively on its platform.

In deciding the issue, the Court first recalled that, according to the 42nd considerandum of the Directive, and as confirmed by the case law of both the EU Court of Justice (CJEU) and Italian Courts, ISPs are not responsible for the activities performed by their own users, under the terms and within the limits of the aforementioned provisions, only when they perform passive hosting activities, or in other words activities “of a mere technical, automatic and passive nature” such that the ISP “has neither knowledge of nor control over the information which is transmitted or stored” (see CJEU in C-236/08). On the contrary, they are responsible when they perform active hosting activities, consisting of any form of management/intervention/selection of information. On the other hand, the Court specified that, according to the CJEU’s case law commented here, under Articles 15 of the Directive and 17 of the Legislative Decree, even active hosting providers have no general obligation of monitoring and checking the content uploaded by users, as this would result in a violation of the provider’s freedom of enterprise and an inadmissible restriction of the users’ rights to information and freedom of expression. It is therefore not conceivable, for example, to oblige the provider to use filtering technologies for all content handled by its services. However, the provider is responsible when it is aware of the unlawfulness of the content, since it has been duly informed by the Authority or by the rights holder.

In the case at issue, the Court of Rome ascertained that Vimeo’s activity was not limited to making content available for users, because it reorganised information using complex criteria, selected, indexed, associated and correlated them with user preferences, offering advertisements and the ability to search for files directly on the website. On this basis, the Court ascertained that it was a content provider which performed active hosting and concluded that, as such, it could have had knowledge of the illicit activities carried out by its users. In addition, it had been properly informed of the existence of illicit content on its web platform.

In fact, the Court clarified that the warning letter sent by RTI, although merely containing the titles of the infringed content without the indication of the related URLs, was an appropriate way to inform the provider: the decision (in accordance with some legal precedents, but in contrast with others), explains that the URL is a technical input which merely indicates the file’s place on the web platform, but is not necessary to identify content. On this point, the Court endorsed the reports of the appointed technical advisor, who showed different technical means (already existing at the time of the facts) able to search for content even without a URL.

In light of the foregoing, the Court ascertained Vimeo’s contributory infringement, and consequently condemned it to compensate RTI’s damages.

With regards to this last point, the Court considered that the most appropriate criteria to assess damages was the reasonable royalty, which was calculated based on the average licence fee requested by RTI in similar cases. The obtained amount, exceeding 10 million euros, was later reduced on an equitable basis, taking into account the fact that Vimeo had promptly removed the content as soon as it was informed of the related URLs, that the profits deriving from advertising concerning the disputed content were very low and that the number of views and downloads of the content was limited.