The Federal Court of Justice had to decide on April 22, 2009 on the legitimacy of so-called “Internet-based” video recorders (I ZR 216/06). The court stated that the offering of Internet-based video recorders can violate the neighboring rights of broadcasting companies under the German Copyright Act and, therefore, is generally illegal.

The plaintiff who broadcasts the television program “RTL” proceeded against the owner of the website “Shift.TV.” On this website, the defendant offers her customers the possibility to record programs of several television channels received via satellite antenna using an “Internet-based personal video recorder.” This technology allows programs to be saved on a “personal video recorder” in the storage space of the defendant’s server. Each recorder is assigned solely to the respective customer. The customer can retrieve the programs recorded on the personal video recorder from any place at any time, as often as required.

The plaintiff as a broadcasting company claimed her neighboring rights according to Sec. 87 subs. 1 of the German Copyright Act (Urheberrechtsgesetz). The courts of the first and second instance decided to a large extent in favor of the plaintiff. The Federal Court of Justice annulled the judgment of the court of appeals and remanded the case to the lower court. The Federal Court of Justice did not see itself as being able to finally decide on the legitimacy of the personal video recorder because in terms of copyright law, it had not been sufficiently analyzed by the lower court as a matter of fact whether the defendant herself or her customers record the programs of the plaintiff on the personal video recorder.

However, according to the Federal Court of Justice, copyright law is violated in both cases: In case the defendant records the programs on the personal video recorder on behalf of her customers, she violates Sec. 87 subs. 1 of the German Copyright Act, which regulates the plaintiff’s right to record her program on picture and sound record media. Since the defendant does not offer her services for free, she cannot plead that her customers have a right to record programs for private use. In case the storage process proceeds fully automatically and the particular customer has to be deemed as the producer of the reproduction, the right to make a recording for private use applies. However, in this case, the defendant violates the plaintiff’s right to retransmit the broadcasts, because the defendant transmits the programs received via satellite antenna to the personal video recorder of her customer.

It remains to be seen how the court of appeals will decide when the details about the recording process have been clarified.