Rapidshare Copyright Infringement Decision

Video Game Law Blog

May 27, 2012

Court Decision on Rapidshare Copyright Infringement Case Holds Implications for Online File Hosting Services

This is a guest posting by Dr. Andreas Lober and Dr. Jan Rasmus Ludwig of Schulte-lawyers.com

In a recently rendered decision the Higher District Court of Hamburg considered Rapidshare to be liable for copyright infringements taking place on Rapidshare’s servers and thereby upheld its previous line of decisions. Moreover, the court ruled that Rapidshare is obliged to take active measures in order to prevent further copyright infringements after having acquired notice. The decision was eagerly awaited as European and national courts lately displayed a more lenient approach regarding the liability of file hosting service providers.

Rapidshare is a typical file hoster and offers online disk space free of costs. The service is financed by advertisement and premium accounts that enable users to run faster and easier downloads. The content of Rapidshare’s servers are not searchable as such. Thus, third-party websites that contain Rapidshare links and thereby function as Rapidshare’s external index are essential for effective distribution of pirate copies. Due to the high degree of anonymity that file hosters generally provide, file hosting is the ideal platform for the distribution of pirate copies. In the present case, GEMA (German association representing copyright interests of composers, lyricists and music publishers) pursued Rapidshare due to the violation of approximately 4,000 songs.

Interestingly, both parties consider the verdict as a success. Rapidshare, on the one hand, is eager to point out that even the Higher District Court Hamburg is now assessing the general business model of file hosters to be legitimate. In its reasoning the court particularly referred to increasingly popular cloud-computing services and held that file hosting is not forbidden as such. The plaintiff, on the other hand, is highlighting that file hosting which is actively fostering copyright infringements remains illegitimate and may be prohibited. In the plaintiff's view this consequence is remarkable as other German Higher District Courts lately applied a more lenient approach regarding the liability of file hosters.

In contrast to previous rulings, the Higher District Court Hamburg found that a file hosting service is not illegal as such. Consequently, it could not continue to consider the upload as a copyright infringement. This change in the court's reasoning is of utmost significance. Following the new decision, the copyright violation is only established with the publication of the download link on one of the essential link lists that functions as an external index of Rapidshare. In view of this essential importance of link lists, the Higher District Court Hamburg ruled that Rapidshare is obliged to closely monitor such external link lists in order to comply with its obligation to prevent further infringements after having acquired notice. Thus, Rapidshare has now an obligation to actively observe the market after having received the first take-down notice regarding a specific game, film or music work.

Nevertheless, the ruling is not the final line. Rapidshare may appeal and thus the German Federal Supreme Court will eventually decide on the case. However, and this is good news, copyright owners are at present able to effectively pursue illegitimate file hosting in Germany. Thus, publisher and other copyright owners are well advised to tackle file hosters now in order to combat illegal downloads and copies. In view of the current decision, Germany appears as an ideal venue to pursue filehosters, as litigation is comparably quick and cost-effective. This is even more the case as netload.in, a very popular file hoster offering lots of pirated games, is based in Germany.