Buma/Stremra v. KaZaA

Supreme Court of the Netherlands, December 19, 2003, C02 186/HR

On December 19, 2003 the Dutch Supreme Court ruled on the recent KaZaA case.[1]The Court made its decision however, without ever actually deciding any copyright issues itself. The Supreme Court dismissed Buma/Stemra’s appeal on procedural grounds related to the wording of the claims as brought by Buma/Stemra. At the same time this means that the Amsterdam Appellate Court’s judgment, that KaZaA is not committing copyright infringement, still stands. The Amsterdam Court of Appeal relied heavily on an expert witness, Professor Huizer, who made the following observations:

· KaZaA is the producer of so-called peer-to-peer software that enables users to exchange data files with other users without the use of a central server or database

· Any user can act as a possible source for downloading files through the Internet.

· Some users will act as Supernodes, which means they act as a meeting place for other users, and as a search engine to locate desired files. Once the file is found, it will be downloaded directly from the source location without passing the Supernode. A list of current Supernodes is made available when the KaZaA software is first installed. Once a desired file is located by a user, that file can be downloaded directly from the PC of another user who is in possession of the requested file and is willing to make it available to other users. No involvement on the part of KaZaA is needed for this to happen.

In addition, Professor Huizer advised that the use of KaZaA software was by no means limited to music files. In his view, KaZaA software was very useful as a communications tool to autonomous communities that do not want to use a central database, such as freelance photographers, real estate agents and individuals who want to publish content independently.

Furthermore, Professor Huizer said that KaZaA software could only be adapted to recognise copyright protected files if there was an unambiguous way to do this, which however is not the case. Even if a worldwide standard for file recognition was available, this could easily be circumvented. The use of KaZaA’s software is not dependant on the involvement of KaZaA. Introducing a mechanism to block the exchange of copyright protected files is not technically feasible at present. Finally, Professor Huizer also noted that the closing down of KaZaA’s website had had almost no effect on the number of KaZaA users.

The Court of Appeal, relying on Professor Huizer’s expert opinion, concluded that KaZaA could not prevent the use of its software to copy files that are copyright protected, such as MP3 files. The Court also took into account that the only option KaZaA had to comply with the injunction imposed by the District Court, was to completely shut down its website. The Court of Appeal ruled that KaZaA itself did not commit any copyright infringement. In as far as committing any acts which were relevant under copyright law, this was done by KaZaA users and not by KaZaA itself. Providing the means to publish or multiply works that are copyright protected is not itself an act of publication or multiplication. It is not true either that the KaZaA software is exclusively used for illegally downloading copyright protected works. Therefore, supplying KaZaA software is not unlawful, according to the Court of Appeal.

In this part of its ruling, the Court of Appeal clearly decided that KaZaA was not committing any copyright infringements and was not acting unlawfully in any other way. However, strictly speaking, there was no need for the Court of Appeal to decide this, since there was a different reason entirely why Buma/Stemra’s claim could not have been awarded. The Court of Appeal also rejected Buma/Stemra’s claim as it believed KaZaA could never fulfil the obligation as claimed by Buma/Stremra.

Buma/Stremra claimed that KaZaA should be ordered to take every precaution necessary to prevent copyright infringements by its users. Professor Huizer advised that this was not technically feasible. Remarkably, Buma/Stremra had not amended its claim after the organisation received a copy of Professor Huizer’s report. At that stage, the collective society could still have included a secondary claim, for instance for an injunction on future distribution of the software. Buma/Stemra however chose not to do so and so their claim was rejected.

At that stage, the most sensible option for Buma/Stremra would have been to bring a new action with better claims, but instead they chose to appeal to the Supreme Court. This was not a wise decision, since the Supreme Court merely judges whether the Court of Appeal has applied the law correctly and whether it has substantiated its rulings sufficiently. One cannot present new facts or bring new claims in the Supreme Court.

Theoretically, the Supreme Court could have referred to the Court of Appeal’s ruling on the copyright issue. However, it was not required to do this and chose not to so so.

Buma/Stremra argued in the Supreme Court that the Court of Appeal should have construed its claim in such a way that it would have included other, in Buma/Stremra’s view, less far reaching claims.

More specifically, the claim should have been understood to include a claim for an injunction on future distribution of software that could be used to copy rights protected works. The Supreme Court ruled that this would amount to a total injunction on distribution of the software, which could not be regarded as a less far reaching claim and therefore, could not have been regarded as included in the claim as filed.

Buma/Stremra also argued that its claim should have been construed to include a claim for an order to re-design the software in such a way that it could no longer be used to copy rights protected works. The Supreme Court ruled that the Court of Appeal’s assumption, that the re-design necessary to achieve this, was not possible.

Thus, the Court of Appeal had made no errors in its claim construction and had therefore correctly rejected the claim on the grounds that KaZaA could never fulfil such an obligation. Thus the Supreme Court focused on whether the lower court’s decision correctly applied Dutch law and therefore, did not have to debate the copyright issues.

As previously stated, the Court of Appeal’s ruling on the copyright issues still stand. Buma/Stremra could of course bring a new action with better worded claims. However, the District Court and the Court of Appeal would simply reject any such claim on the basis of the Court of Appeal’s ruling on the copyright issues. This means that Buma/Stremra would have to go back to the Supreme Court to try to get the new Court of Appeal judgment overturned and have the case referred to another Court of Appeal. Only at this stage (the fourth instance in the new proceedings) would Buma/Stremra then have any chance of obtaining an injunction against KaZaA.

Buma/Stremra’s lawyer is reported to have said that his client is considering other methods to prevent copyright infringements. In a statement, Supreme Court lawyer Cohen Jehoram, described the ruling as a missed opportunity whereby the Court could have given some guidance on the legal issues surrounding peer-to-peer software and how it can contribute to copyright infringement.

Even a new Supreme Court hearing will not be the end of the matter. Since the Supreme Court does not grant injunctions, but only affirms or overturns Court of Appeal judgments, an injunction could only be obtained after referral to another Court of Appeal.

Effectively this means that the Amsterdam Court of Appeal judgment of March 28, 2002 is going to be the standing case law in the Netherlands for many years to come. The Court of Appeal judgment may also be used as a precedent in other jurisdictions, since copyright law has been partly harmonized almost world-wide through the Berne Convention. Of course, the Berne Convention, last updated in 1971, contains no provisions related to file swapping software, but Courts throughout the world have also given proper consideration to precedents from other countries when ruling on the equally new phenomenon of internet provider liability. The Supreme Court judgment itself will not serve as a precedent, since it does not deal with any copyright issues, as I have explained.

The ruling does not of course mean that individuals who use KaZaA software to upload copyright protected works without permission from the right owners do so without any risk. By doing so, they continue to infringe rights protected works and actions may be brought against them successfully. This is the correct procedure; attacking new technology in order to stop infringers is not.

Wouter Pors and Camilo Schutte, both of Bird & Bird, were the Supreme Court litigators for KaZaA.

This article was first published in WILR.

1Burma/Stemra alleged that KaZaA’s software infringed music copyright.
The Amsterdam District Court ruled in favour of Burma/Stemra on November 29, 2001, though this ruling was overturned by a Court of Appeals judgment (March 28, 2002).

Important - The information in this article is provided subject to the disclaimer. The law may have changed since first publication and the reader is cautioned accordingly.