Copyright Infringement on the Internet

Challenging the Principle of “Territoriality”

The principle of territoriality has been the subject of much controversy. In the fields of private international law and intellectual property, this principle relates to the sovereignty of countries to regulate within the boundaries of their own territory. This principle has been enshrined in numerous conventions, such as the Berne and Paris Conventions. The Brussels I Regulation has also been at the center of many discussions regarding intellectual property rights infringements on the Internet. Pursuant to Article 5(3) of the Brussels I Regulation, a person domiciled in one Member State may be sued in another Member State in tort or quasi-tort proceedings before the courts of the place where the harmful event occurred or may occur.

As will be shown in light of the case Pinckney v. Mediatech AG (the «Pinckney» case), the principle of territoriality is being challenged by the increase in cross-border transactions, globalization, and the rise of the Internet. This decision represents a milestone in cases of copyright infringement on the Internet, since copyright holders can now file a lawsuit in a court of a European Union member state where the content is made available to the public, and it will not be necessary for copyright holders to prove that a website’s activity is directed at Internet users in the member states of the courts where the lawsuit has been filed.

In this case, a French citizen residing in Toulouse, France (Mr. Peter Pinckney) sought damages as a result of copyright infringement involving 12 songs recorded by his band, Aubrey Small. The defendant, Mediatech AG (a company based in Austria), allegedly burned his album onto a CD and reproduced it without his consent. They then sold them as unauthorized copies through two companies in the United Kingdom: Crusoe and Elegy. The albums could be accessed from Mr. Pinckney’s residence in France via numerous websites.

Mr. Pinckney filed a complaint with the Toulouse Regional Court. However, Mediatech argued that the case fell outside the jurisdiction of the French courts and that, therefore, they lacked the authority to hear the case. The French court dismissed Mediatech’s appeal on the grounds that the CDs were indeed accessible in France. Consequently, the French public, including Mr. Pinckney, would have been able to purchase them online, and this was sufficient to establish a “substantial connection between the facts and the alleged harm.”

Mediatech appealed this decision, arguing that the CDs were “published” at the company’s headquarters in Austria on behalf of the U.K. company. They argued that the case should be heard in the courts of Austria and the U.K.—that is, the defendant’s place of domicile and the place where the damages occurred, respectively. In 2009, the Toulouse Court of Appeals ruled that it lacked jurisdiction to hear this case.

Mr. Pinckney appealed this ruling, citing Article 5(3) of the Brussels I Regulation and arguing that the French courts did have jurisdiction. The Court of Cassation decided to stay the proceedings and refer the following questions regarding Article 5(3) of the Brussels I Regulation to the Court of Justice of the European Union (CJEU) for a preliminary ruling:

1) “A person who believes that their rights have been infringed has the option to bring an action to establish liability before the courts of each Member State in whose territory the online content is or has been accessible, in order to obtain compensation solely for the harm suffered within the territory of the Member State of the court before which the action is brought,” or;

2) “Must that content also be, or have been, directed at an audience located within the territory of that Member State, or must there be some other, clearer connecting factor?”

Ultimately, the CJEU ruled in favor of the plaintiff and determined that the French courts had jurisdiction on the grounds that there was a “likelihood that a harmful event would occur in a territory” (France) where copies of the CDs could also be obtained through websites.

The advantage of this case’s interpretation is that it represents a victory in the battle against the principle of territoriality. However, the problem is that this decision could encourage the practice known as “forum shopping.” That is, seeking the jurisdiction or courts of countries that may issue a ruling more favorable to one’s interests, since it provides copyright owners with more options to decide which court would be most convenient for them. The other disadvantage is that this may not be the most practical approach to copyright, since copyright owners would now need to seek the jurisdiction of the courts in every country where the infringing event occurred.