The Court of Appeal of Milan issued on February 7, 2015 a decision in the Yahoo! v. RTI case, that overturned the first instance decision that had held Yahoo! responsible for copyright infringement in connection with videos uploaded by end users on its platform.

The dispute dates back to 2009, when RTI (controlling Mediaset, the biggest private Italian broadcaster) sent Yahoo! a cease and desist letter, asking the latter to remove from its portal a list of videos on which it claimed exclusive rights. Such cease and desist letter did not mentioned any single video URL addresses but generically referred to videos from certain TV programs. Yahoo! did not comply to such request, with the consequence that RTI brought proceedings before the Court of Milan.

In the first instance proceeding, the Court of Milan considered that Yahoo! could not rely on the hosting provider exemption under the Legislative Decree n. 70/2003 (implementing the Directive 2001/31/CE “E-Commerce Directive”) as it is provided only for ‘passive’ hosting providers. Passive providers are those whose activity is limited to the technical process of operating and giving access to a communication network over which information is made available by third parties.

According to the overturned decision, Yahoo! was not to be considered a ‘passive’ provider within the meaning of the E-Commerce Directive, having managed, organised and index-linked the videos uploaded by the users, thus playing an active role to link the items to one another and exploit them commercially.

According to the latest Court of appeal decision, the content organization and index-linking through sophisticated IT techniques to monitor and manage the contents – even if aimed to making a profit - are insufficient to exclude the passive role of the hosting provider and, therefore, not to apply the related exemption. To strengthen its arguments, the Court Appeal recalled a number of EU Court of Justice decisions (e.g. Sabam and Telekabel).

Basing on the above arguments, the Court of Appeal overturned the first instance decision and held that Yahoo! should benefit of the hosting provider exemption under the E-Commerce Directive and Italian Legislative Decree n. 70/2003 .

The decision also stated that no hosting provider is subject to a general obligation to monitor in advance the information transmitted or stored nor to actively seek facts or circumstances indicating any illegal activity carried out through its website. The liability of a hosting provider shall be triggered only in case it fails to remove the illicit contents after having notice of them.

In this specific regard, the Court considered that only a detailed cease and desist letter, including the URL of the infringing pages, should activate the hosting provider’s obligation to remove the content and, in case of failure, its liability for contributory infringement.

Applying such principle, Yahoo! was released from any RTI’s claim as i) it had no obligation to actively search and extract any content, ii) RTI’s cease and desist letter did not mention the URLs for each offending video, iii) Yahoo! promptly removed any illicit content as soon as RTI has located them.