Liability of internet providers for copyright infringement has become a growing issue in Russia. With internet communication as a part of daily life, it has become important to determine which actions cross the line of copyright infringement, and who is responsible in the event of infringement. This determination becomes particularly difficult when a website allows millions of users to place and exchange materials online. For example, social networking services worldwide allow for such exchange.
Russian law does not contain special provisions regarding these issues. As a result, courts face significant difficulties in deciding which criteria should apply to determine the conditions and scope of liability where a copyright infringement occurs. However, Russian courts and the legislators are trying to resolve the issues, taking into consideration the experience of the U.S. and European Union. This article highlights recent trends in Russian practice and summarises pending draft amendments to Russian law.
Recent Practice of Arbitrazh Courts 1
One of the earliest and most important disputes in Russia relates to a claim of a copyright owner against the internet provider Masterhost due to unauthorised use of music. The music was placed by users on the website located on the Masterhost’s server. Considering this dispute, the Higher Court of Arbitrazh explained the grounds of exclusion of internet provider liability. Thus, the internet provider is not liable on the condition that the provider:
- does not initiate the transmission;
- does not select the receiver of the information;
- does not affect the integrity of the information transmitted; and
- takes preventive measures to avoid infringement.2
Notably, the first three conditions are equivalent to the provisions of the E-Commerce Directive3 (Article 12) and is very similar to relevant provisions of the DMCA.4 According to these EU and US Acts, the aforesaid requirements relate to service providers whose service consists of the transmission of the information or provision of access to a communication network.5 Notably, the provisions do not apply to providers whose sole purpose is for storage of information provided by a user of the service.
In the Masterhost case, the Higher Court of Arbitrazh also took the following factors into consideration:
- whether the copyright owner contacted the provider with a request to eliminate the infringement; and
- what kind of measures were taken by the provider to prevent infringement, which may be committed using the services rendered by the provider.6
The provider implemented the process of a user’s registration, which was not sufficient evidence to prove that appropriate preventive measures have been undertaken.7
These criteria have provided a guideline for the courts8 and have been applied in a number of disputes.9
Another landmark case is Agava-Soft, which relates to the dispute between a host provider and a copyright owner regarding the unauthorised use of photographs. These photographs have been placed by a third party on a file-exchange server owned by the host provider Agava-Soft. Resolving this dispute, the Higher Court of Arbitrazh gave further guidance on what should be examined by courts to fairly decide whether a host provider is liable. In particular, courts should consider the following factors:
- whether the provider has received profits from the activity connected with the use of third parties’ IP rights performed by persons who used the provider’s services;
- whether the provider has established restrictions regarding the volume of information that can be placed by users, and its accessibility for an unlimited number of users;
- whether the terms and conditions of the website impose on a user an obligation to comply with the legislation when placing the information, and an unconditional right of the provider to remove the illegal content; and
- whether there is an absence of a technological condition (program) facilitating an infringement, and also existence of special effective programs that allow the provider to prevent, monitor or remove the illegally placed content.10
In addition, the Higher Court of Arbitrazh has recommended assessing the provider’s behavior after the receipt of the notification of infringement, or other means of learning about the infringement. In particular, courts are to assess the provider’s actions on removal and blocking the disputed content or the infringer’s access to the website.11 If these actions are not sufficient, the court may rule that a provider is liable. For example, in the dispute regarding the liability for a copyright infringement of a web-site owner, the Higher Court of Arbitrazh confirmed that to be released from a liability, a defendant, upon a receipt of a notification on infringement, must undertake active actions aimed at ceasing the infringement.12
Proposed Amendments to IP law
Over the last several years, the reform of civil legislation is being implemented in Russia. Generally, this reform relates to the Civil Code of the Russian Federation, including Part IV that is directed to Intellectual Property. Pending amendments that relate to the internet providers’ liability are aimed at filling the gap in Russian law regulating this area.
Similarly to the E-Commerce Directive and DMCA, the pending amendments differentiate providers who transmit information and providers who host information. Consequently, the legislation suggests different rules for these two categories of providers.
Thus, service providers who transmit information shall not be liable for the IP rights infringement on the following conditions:
- the provider does not initiate the transmission of the information and does not select its receiver;
- the provider does not modify the material after its receipt, except for modifications that are necessary for the technological process of transmission; and
- the provider did not know and could not have known about the infringement.13
By contrast, service providers that provide hosting services (storage of information) shall not be liable on the following conditions:
- the provider did not know and could not have known about the infringement; and
- upon receipt of a written notification on infringement, a provider has undertaken necessary and sufficient measures to eliminate the infringement.14
These draft amendments were adopted by the Russian Parliament (the State Duma and the Federation Council) to come into its legal force on August 1, 2013. In addition to these provisions, which supplement the Civil Code of the Russian Federation, the Parliament has adopted the amendments to a number of other legal acts.15 These amendments relate to a procedure of notification of an internet provider, terms for taking measures to eliminate an infringement, a preliminary injunction and enforcement. These actions have resulted in debates on this topic and a negative reaction from the internet industry. However, due to practical needs to have clear regulation in this area, it is possible to expect that the proposed amendments will be signed by the President soon and come into force.
Russian court practice and the draft legislation related to the liability of internet providers takes into account the developments of the US and EU law and is intended to meet needs of the internet communication. Until the relevant law provisions are finally enacted, the criteria elaborated by the Arbitrazh practice should apply to resolve disputes.