File hosting service must scan for copyright infringing files, German federal court rules

This ruling might mean the end for file hosters like Rapidshare in Germany, a lawyer said

Online file locker services that, like Rapidshare, have a business model that provides an incentive to share copyright protected materials must monitor incoming links to discover infringing files, the German Federal Court of Justice has ruled.

The ruling concerned a dispute between German copyright collecting society Gema and filesharing site Rapidshare. In 2009, Gema sued Rapidshare in Germany, alleging that over 4,800 music files for which it represented the copyright holders were shared via Rapidshare without consent from Gema or the artist.

Gema won the case in lower courts and on Tuesday the German federal court published its decision confirming those rulings. The decision was made on Aug. 15, but German courts typically take several weeks to process full written verdicts.

The federal court said that while Rapidshare's business model was not designed for rights violations from the outset, it provides an incentive for sharing illegal downloads.

Unlike other cloud computing services, the defendant doesn't require a fee for storage space, the court said. Revenue is made by selling premium accounts that are mostly attractive for massive illegal downloads, it said. This attractiveness for illegal use is enhanced by the opportunity to get an anonymous account, it said, adding that Rapidshare itself estimates that it has an abuse rate of 5 to 6 percent which corresponds to approximately 30,000 infringing acts with a daily upload volume of 500,000 files.

Because Rapidshare provides an incentive to share illegal downloads, it is obliged to monitor if there are indications that there are such files available on its platform, said court spokeswoman Dietlind Weinland on Wednesday. Therefore, Rapidshare has to monitor incoming links with all possible resources such as search engines, Facebook, Twitter or web crawlers if necessary, the court ruled.

"How they do that precisely really doesn't matter to us," she said, adding that the main point is that Rapidshare has to monitor regularly and comprehensively.

While this verdict concerns Rapidshare it also applies to file hosting services with a similar business model, Weinland said.

In this verdict, the Federal Court of Justice broadened the liability of file locker services, she said.

In a similar copyright dispute between Atari and Rapidshare before the federal court, the file locker service deleted an illegal copy of the game "Alone in the Dark" at Atari's request, but neglected to check whether the game was stored on its servers by other users. The court ruled in June last year that Rapidshare should check its servers for other infringing material.

However, that dispute dealt with one single issue and the court didn't conclude that the Rapidshare's business model provides an incentive for copyright infringements, Weinland said.

Gema called the verdict "groundbreaking" because it clarifies that online storage services are fundamentally responsible to rights holders whose works are illegally shared on a massive scale, it said in a news release dated August 16.

Rapidshare did not immediately respond to a request for comment.

The service however changed its business model in November 2012 when it announced it would adopt a classic hosting model, meaning that not only the storage space but also the traffic created would have to be paid for solely by the uploader of the file. While RapidPro accounts still come with unlimited traffic for a user's own downloads and downloads by contacts of that user, public traffic was capped at 30 GB per day. This made Rapidshare unattractive for those seeking to share copyright materials without permission.

The current ruling though might pose an extremely complex undertaking for services like Rapidshare, wrote Thomas Stadler, a German lawyer specializing in IT and intellectual property, in a blog post on Wednesday. The services can only minimize but not exclude liability risks by monitoring incoming links, he wrote.

"It is therefore quite possible that this will mean the end for services like Rapidshare in Germany in the short or medium term," he wrote.

Loek is Amsterdam Correspondent and covers online privacy, intellectual property, open-source and online payment issues for the IDG News Service. Follow him on Twitter at @loekessers or email tips and comments to loek_essers@idg.com

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags copyrightlegalintellectual propertyRapidshare

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Loek Essers

IDG News Service
Show Comments

Cool Tech

Toys for Boys

Family Friendly

Stocking Stuffer

SmartLens - Clip on Phone Camera Lens Set of 3

Learn more >

Christmas Gift Guide

Click for more ›

Brand Post

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Aysha Strobbe

Microsoft Office 365/HP Spectre x360

Microsoft Office continues to make a student’s life that little bit easier by offering reliable, easy to use, time-saving functionality, while continuing to develop new features that further enhance what is already a formidable collection of applications

Michael Hargreaves

Microsoft Office 365/Dell XPS 15 2-in-1

I’d recommend a Dell XPS 15 2-in-1 and the new Windows 10 to anyone who needs to get serious work done (before you kick back on your couch with your favourite Netflix show.)

Maryellen Rose George

Brother PT-P750W

It’s useful for office tasks as well as pragmatic labelling of equipment and storage – just don’t get too excited and label everything in sight!

Cathy Giles

Brother MFC-L8900CDW

The Brother MFC-L8900CDW is an absolute stand out. I struggle to fault it.

Luke Hill

MSI GT75 TITAN

I need power and lots of it. As a Front End Web developer anything less just won’t cut it which is why the MSI GT75 is an outstanding laptop for me. It’s a sleek and futuristic looking, high quality, beast that has a touch of sci-fi flare about it.

Emily Tyson

MSI GE63 Raider

If you’re looking to invest in your next work horse laptop for work or home use, you can’t go wrong with the MSI GE63.

Featured Content

Product Launch Showcase

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?