Liability of an eBay trader

Injunctive relief: Liability of an online music retailer due to the distribution of a music title infringing personal rights

In its judgment of July 26, 2019 (Case No. 142 C 2276/19), the Munich Local Court ruled that online retailers have no duty to check for any infringements of personal rights for music titles sold on their online stores and therefore do not have to reimburse attorney’s fees for related warnings.

The case dealt with the question of the extent to which an online music retailer is obligated to check the content of the music distributed on its online store and, as a consequence, can be held liable as an interferer.

The judgment is based on the following facts; the plaintiffs are underage daughters of a celebrity couple well-known on German TV, the defendant is a commercial Internet trader for music CDs on the eBay platform. In preliminary injunction proceedings before the Munich I Regional Court, the plaintiffs had obtained an order that two German rappers refrain from using certain text passages in one of their songs, as these had violated the plaintiffs’ general right of personality.

The defendant had offered the album in dispute for sale on its website. After obtaining the preliminary injunction, the plaintiffs then issued a warning to the defendant and requested him to cease and desist and to issue a declaration to cease and desist with a penalty clause. The defendant, immediately contacted the plaintiff’s representative by telephone and informed him not to distribute the album any further. However, since the latter continued to insist on the submission of the cease-and-desist declaration, the defendant ultimately submitted it, whereupon he received an invoice for the attorney’s fees. However, the defendant refused to pay the bill.

The plaintiffs claim that the purpose of the warning in dispute was to block all known distribution channels for the song as quickly, effectively and, in particular, sustainably as possible in order to prevent, or at least contain, further distribution through commerce via the Internet. The plaintiff is of the opinion that pre-trial attorney’s fees pursuant to sec. 823 para. 1 BGB in conjunction with. Art. 1 para. 1 GG andArt. 1 para. 1 GG iVm Art. 2 para. 1 GG, or alternatively from management without a mandate pursuant to § 683 BGB.

The plaintiffs, were clearly identifiable in the disputed text and the depicted inhuman text part was disseminated by the defendant in the context of its commercial Internet trade in public. The disputed text is characterized by sexual and at the same time extremely violent desires / ideas of the two rappers. The text also constitutes a criminal offense of threat under § 241 of the Criminal Code and insult under § 185 of the Criminal Code. Through the two stanzas, the plaintiffs would be violated in their inviolable human dignity according to Art. 1 Para. 1 GG is violated, so that no balancing would have to be carried out. The unlawfulness of the text lines was immediately and without further ado recognizable even for laypersons.

Through his acts of dissemination of the unlawful text, the defendant was a “Stoerer” (interferer) under Section 1004 of the German Civil Code, and it was in his economic interest for the plaintiffs to request him in advance to submit the cease-and-desist declaration with a penalty clause in order to avoid a more expensive legal dispute. The defendant had arranged for the transmission of the content of the audio CD to its customers itself and on its own responsibility and also selected the addressees of the content. If, for reasons of cost, he takes the risk of not checking the legality of the products he offers beforehand, he must ultimately bear this risk and its realization economically himself.

The defendant claims that it is necessary to look at the entire song in order to be able to recognize that it is a matter of isolated lines strung together that have no connection with each other and do not follow any logic. The song also has no stringent lyrics that would run through the entire work. There was no action that violated human dignity, nor was any violation of personal rights openly recognizable. It is a stringing together of various “punch lines” that do not represent a factual context.

With 2,000 CDs with a standard playing time of 1:30′, listen to all the recordings for 8 hours a day for over 375 days? This also went too far for the Bavarian jurisdiction.

Court case against an eBay dealer because of music cds

The defendant is of the opinion that the plaintiffs are not entitled to reimbursement of pre-trial attorney’s fees. In particular, the defendant was not an aider and abettor of the main responsible
Rappers. There was neither intentional nor negligent dissemination of the disputed texts or lines. The defendant is not a direct interferer. The defendant, as an Ebay trader, had sold a large number of audio CDs on his sales page. He had posted a variety of different music and was just not specialized in a particular genre or artists. The defendant is also not liable as an indirect interferer. The defendant would have had to listen to all of the sound recordings continuously at 8 hours for over 375 days with the constantly available titles of about 2,000 pieces with a standard playing time of 1:30′. In the case of an online trade on eBay, a reactive duty to verify exists only with knowledge. At most, the time at which the CD was posted was decisive, and it was not obvious to the defendant that one of the songs on the album might contain illegal content. The unlawfulness had been established only later in the context of the preliminary injunction. In the preliminary injunction proceedings, it had been possible to clarify with regard to the song in question that in the present case the plaintiffs’ rights of personality outweighed the rappers’ freedom of art, although only a summary examination had been carried out here. Such a decision and legal assessment could not be passed on to online retailers. When an infringement was judicially determined, the defendant reacted immediately after becoming aware of it and called the plaintiff’s representative. When the latter insisted on a cease-and-desist declaration, the defendant immediately submitted it.

The court correctly ruled that the claim should be dismissed. In the opinion of the court, the defendant is liable neither as a perpetrator nor as an aider and abettor, nor as an interferer, for the dissemination and making available to the public of the disputed texts. A claim for damages by the plaintiffs in respect of the attorney’s fees incurred prior to the proceedings on the basis of an infringement of the plaintiffs’ general right of personality under §§ 1004 para. 1 p. 2, 823 para. 1, para. 2 BGB in conjunction with 88 Art. 1 para. 1.2 Para. 1 GG was therefore denied. Also a possible claim for reimbursement of attorney’s fees from § 683 BGB.

In this regard, the court states that if there is a risk of repetition, a party can be sued by the infringed party for injunctive relief if it unlawfully infringes a protected right. Infringers are both perpetrators and participants in an act of infringement as well as third parties who willingly and adequately-causally contribute to the infringement of the protected legal interest, if they can be regarded as interferers.

In this regard, it draws on the principles of the Munich Higher Regional Court on bookseller liability for injunctive relief from its judgment of October 24, 2013 (see OLG München, judgment of October 24, 2013, Case No. 29 U 885/13, GRUR-RR 2014, 13).

“In principle, whoever commits the infringement of an intellectual property right as an absolute right himself is obliged to cease and desist as a perpetrator. In this context, it does not matter whether he also knew or at least had to know the circumstances which justify the accusation of infringement, i.e. acted culpably. This already follows from the fact that the statutory provisions provide for a claim for injunctive relief without further ado in the event of an infringement, whereas claims for damages only if, in addition, the infringement was also culpable.”

OLG Munich, judgment dated October 24, 2013, Ref. 29 U 885/13

In the opinion of the Munich Regional Court, an adjustment based on fundamental rights must take place in the area of trademark law. This is the only way to prevent a bookseller from being held liable without restriction for the distribution of plagiarism. The latter was indeed entitled to the control of the crime, since he controlled his own operation. However, this would have the consequence that the bookseller would be exposed in an incalculable manner to the risk of warning letters for alleged copyright infringements and the associated costs. The effort he would have to make in order to comply with such an inspection obligation would be outside the bounds of what is reasonable and would call the entire business model into question. This encroachment encroached on the scope of protection of the freedom of the press guaranteed by Article 5 (2) of the German Basic Law, which also protects the distribution activities of booksellers.

In such a case, therefore, a balancing of interests between the competing fundamental rights of the bookseller’s freedom of the press and the author’s right of ownership must be carried out by way of practical concordance. The compensation in this case would have to be made by a differentiated liability regime, which in practice is designed in such a way that the liability of a bookseller is limited to such infringements that are committed after he has been made aware of a clear infringement.

According to the Munich Regional Court, such a requirement leads to a fair balance of interests. Future acts of distribution are prevented by the fact that the bookseller is subject to duties of inspection from the time of knowledge, in the event of non-compliance with which he is liable at least as a debtor to cease and desist. His liability is limited to the privilege that booksellers do not have to bear the costs for a warning-like first notice of infringement, but that it is subsequently their responsibility to stop copyright infringements corresponding to the notice. This result adequately takes into account both the fundamental right to property of the author and the position of booksellers protected by freedom of the press.

In the present case, the Munich Local Court followed the principles of this decision in substance. These are transferable to online sales of CDs. The court states in this regard:

“The defendant is liable neither as the perpetrator of the infringement of personality rights nor as an aider and abettor of the rappers. He had neither knowledge of the infringing content, nor had it been submitted that he had further distributed the CD after becoming aware of it.“

Furthermore, the defendant could not be held liable as a “Stoerer” (interferer). In the present case, there had been a warning-like first notice of the infringement, the costs of which are to be borne by the creditor himself, since there was no interfering property, since the alleged “interferer” only became aware of a possible infringement liability with the warning-like first notice. The costs for the first letter similar to a warning letter would then have to be borne by the party bringing the action.

The defendant was also not obligated to cease and desist as a troublemaker. This presupposes the existence of testing obligations. The scope of this is determined by whether and to what extent the person claimed to be the interferer can be expected to carry out an examination under the circumstances. The court denied a duty of inspection in this respect on the grounds that this could not be expected of an online trader. It is reasonable to expect him to check whether further infringements are caused by his actions when he becomes aware of infringements. The court correctly states that the defendant cannot be expected to listen to all CDs (distribution of more than 2,000 CDs) or to check their text without having concrete knowledge of a rights infringement. The defendant (on his own) would already reach his limits in terms of time.

In addition, the defendant (as a legal layman) would have to make a legal assessment, which the plaintiff party had also clarified in court with the rappers in another proceeding in a non-controversial manner, whereby in this respect it also came to weighing various fundamental rights (including general personal rights, artistic freedom).

The defendant could also not know whether there might not even have been a consent to the plaintiffs or an approach with the rappers. He could not have any knowledge of such circumstances.

The defendant could not be expected to examine every CD or title distributed by it for any infringing content, especially if it is to be held liable as a “Stoerer” (interferer). This would jeopardize its business model because of the immense expense involved.

The strict liability to cease and desist would have the consequence that dealers would be exposed in an incalculable manner to the risk of warning letters due to alleged infringements of personality rights and further infringements from other rights and the associated cost burden, which could not be reasonably limited by an examination of the CDs offered due to the immense effort involved and could therefore call into question the business model of the wide-ranging offer of CDs and generally audio works of any kind. In this respect, the Munich Local Court applies the principles of the Munich Regional Court to online music retailers accordingly. A “Stoererhaftung” (Breach of Duty of Care) before knowledge is not appropriate in such cases.

This would also not leave those affected unprotected. Rather, they could, as also done by the preliminary injunction before the Munich I Regional Court, turn against the music label or, however, also against the artist/rapper.

Future sales activities are precluded by the fact that the defendant is subject to inspection obligations from the time it becomes aware of them and is liable as a debtor to cease and desist in the event of non-compliance.

The costs incurred by the plaintiff for a first notice similar to a warning notice were the sole subject matter of the dispute in the present case. The action was therefore to be dismissed.

The plaintiffs’ appeal before the Munich Regional Court was ultimately withdrawn on the court’s advice.

If you, as a dealer, have been called upon in similar cases and need legal assistance, please contact us.
Rehkatsch Rechtsanwälte: +49-(0)221-4201074. We will be happy to help you.