In its judgment of 12 June 2009 the Regional Court of Hamburg granted an injunction (cease and desist order) in preliminary proceedings in favour of the German music collecting society GEMA against the Swiss filehoster RapidShare AG. The decision was based on the finding that although RapidShare used an MD5 hash filtering program, it had not done sufficient to prevent its users from illegally uploading music to its servers and thereby making the music publicly available. Contrary to many press reports, the court did not impose a fine or damages on RapidShare.
The judgment triggered huge international press attention, inter alia because of the value the court attributed to the claim (EUR 24 million), which was misinterpreted by the press as a "fine". The judgment is important because outside Germany no there have been no judgments against RapidShare. However, in Germany there have already been a couple of previous judgments on RapidShare.
The court rendered a cease and desist order stating that RapidShare must stop making publicly available or letting its users make publicly available the music listed by GEMA in the claim and that, in case of further infringements, RapidShare has to pay a disciplinary fine of up to EUR 250,000 for each case of infringement.
The court decided that the value of dispute was EUR 24,075,000. This amount is neither a fine nor damages which need to be compensated. The value of dispute is directly only relevant to calculate the court fees and the recoverable lawyer fees, but is also a sign of the court's evaluation of the copyright infringements.
The court found that RapidShare was responsible not for direct copyright infringement, but as a "disquietor" ("Störer"). This principle is peculiar to German law. A "disquietor" is a person who is made responsible for an IP infringement because of its relevant causal contribution. Such relevant contribution is usually assumed if the person has put in place a technical cause for an infringement, is aware of the infringement and does not prevent the (repetition of the) infringement although being able to do so within reasonable means. The German courts apply the disquietor principle with respect to injunctive relief claims (but not with respect to damage claims), even against access, caching and hosting providers within the meaning of the E-Commerce Directive, arguing that the protections of the Directive do not apply to injunctive relief once a person is aware of the infringements.
In detail, the court found that RapidShare is liable to cease and desist because it did not effectively prevent internet users from sharing copyrighted music files on RapidShare although GEMA had given notice of the infringement several times before the lawsuit. The sole use of a filter program called “MD5” by RapidShare was held to be insufficient because it did not effectively prevent users sharing the files in dispute. Instead, RapidShare would have needed to undertake more specific steps to make sure that the relevant files notified to it by GEMA are deleted and not shared again on RapidShare. The court held that RapidShare did not sufficiently prove that it has undertaken such reasonable steps (which could even include manual inspection for the particular disputed files).
There had already been several German court judgments in preliminary injunctive proceedings regarding alleged copyright infringements involving file sharing hosts – all based on the "disquietor"-principle. The judgments include five Regional Appeal Court judgments, four in favour of the rightholders and one in favour of the infrastructure provider (Regional Appeal Court Hamburg of 2.7.2008, file number: 5 U 73/07, granting judgment regarding RapidShare; Regional Appeal Court Cologne of 21.9.2007, file number: 6 U 86/07, granting judgment regarding RapidShare; Regional Appeal Court Hamburg of 28.1.2009, file number: 5 U 255/07, granting judgment regarding usenets; Regional Appeal Court Hamburg of 14.1.2009, ref. 5 U 113/07, granting judgment regarding usenets; Regional Appeal Court Düsseldorf of 15.1.2008, file number: I-20 U 95/07, denying judgments regarding usenets) as well as a couple of judgments of Regional Courts. All Regional Appeal Court judgments have been decided in preliminary injunction proceedings which cannot be appealed to the highest German civil court, the Federal Court of Justice. Thus, there will be no clear legal situation in Germany in the near future.
In conclusion, all courts found that file sharing hosts do not regularly need to check their platforms for copyright infringements in general, but need to take reasonable steps in order to stop infringements and avoid their repetition as soon as they get notice of the infringement. Knowledge is deemed proved if the provider warns users of the possibility of copyright infringements (which some of the providers did in their early days, but now most of the big providers do not do this anymore). The main issue currently is the question: what kind of measures need to be undertaken by the provider once it is notified of infringing content? A manual inspection of the platform by the provider’s employees is certainly a sufficient step, but not practical for the providers in mass cases; the sole use of a pure MD5 filter on the other hand is not sufficient as the files can easily be renamed which makes it impossible to filter them. In terms of the required steps the Hamburg and Cologne regional courts apply a higher standard than the Düsseldorf Regional Court. It remains to be seen how the Federal Court of Justice may decide the case in the future. Until then, claiming rightholders (who can choose the jurisdiction within Germany in internet cases) will prefer going to Hamburg and Cologne.