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New law in Germany will further reduce liability of Wi-Fi providers for copyright infringement by users


The law is to be changed in Germany to allow businesses to operate open Wi-Fi networks without being liable for copyright infringement carried out by users of those networks, according to media reports in the country.

Der Spiegel and Heise have reported that the revision to the Telemedia Act could be introduced in the autumn of this year. The proposals follow a period of disagreement within the coalition government in Germany over what the reforms should look like.

According to the latest proposals, hotels, restaurants, cafes and other businesses that offer Wi-Fi services alongside their main business activities will not be required to ensure that people wishing to use their Wi-Fi network are registered to do so to avoid being held liable for any infringement of copyright those users engage in.

If introduced, the new proposals would represent a significant change to German government plans to update the Telemedia Act  that were initially outlined last year. Those plans sought to clarify that commercial operators of Wi-Fi hotspots in Germany would not be liable for illegal activities carried out by others over the networks they provide access to so long as "they have fulfilled certain duties of care".

Under those proposals, Wi-Fi operators would be considered to have taken "reasonable measures to prevent a rights violation by users" if they had "taken appropriate security measures against unauthorised access of the wireless local area network" and only granted internet access to users "who have declared not to commit any rights violations in the context of the use".

The changes to the rules on liability in relation to the operation of Wi-Fi networks are being considered amidst an ongoing legal battle between Sony Music and business owner Tobias McFadden over alleged copyright infringement carried out over the Wi-Fi network operated by McFadden's business.

McFadden was sued by Sony Music after the company claimed McFadden's Wi-Fi network was used to download copyrighted music illegally. McFadden has claimed he is not directly liable for copyright infringement. A regional court in Munich said it was "minded to reach a finding of indirect liability" against McFadden since he had not made his Wi-Fi network secure, but it has reserved judgment in the case after referring legal questions to the Court of Justice of the EU (CJEU) for interpretation.

In March, in a non-binding opinion, a legal advisor to the CJEU said EU law allows rights holders to obtain court injunctions to force hotels, cafes and other businesses that offer free Wi-Fi connectivity as "an adjunct" to their "principal economic activity" to help stop copyright infringement over their networks. However, he said that there are limits to what measures can be imposed on operators of such Wi-Fi networks within those court orders.

If the Wi-Fi network operators can only comply with the injunctions by "terminating the internet connection, or password-protecting the internet connection, or examining all communications transmitted through it in order to ascertain whether the copyright-protected work in question is unlawfully transmitted again" then the injunctions do not need to be complied with, advocate general Maciej Szpunar said.

The CJEU has yet to issue its formal judgment in the case. It often follows the recommendations of its advocate generals when coming to a ruling.

Experts in telecoms and intellectual property law at Pinsent Masons, the law firm behind Out-Law.com, said the proposals would benefit mobile users and Wi-Fi providers in Germany, but disadvantage rights holders.

Michael Horn and Igor Barabash said that if the measures encourage broader coverage of free-to-use and free-from-registration Wi-Fi networks then it could reduce the costs consumers might otherwise face in using data services offered by mobile network operators. However, they said that unless access to Wi-Fi networks could be seamlessly maintained as consumers move around then Wi-Fi services are unlikely to become a genuine substitute for mobile network data services.

"The proposed changes to the Telemedia Act, as reported, would deliver clear benefits for Wi-Fi providers as they would not be liable for infringements committed by third parties via their network," Barabash said. "For rights holders the planned change in the law will restrict their ability to tackle online copyright infringement."

"Rights holders in Germany have not able to claim damages against Wi-Fi providers for infringements committed by third party users of their services, unless the providers positively knew about the infringements or were working together with the violators, but they have been able to ask Wi-Fi providers to assist in combatting third party infringement over the networks through the use of cease and desist letters. Under the latest proposals this tool of enforcement will not be open to them, and the possible proliferation of free Wi-Fi services that the new laws could spur could serve to increase the damages rights holders incur from copyright infringement." he said.

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