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Copyright compensation must be reasonable, EU’s top court rules

Copyright infringement must be compensated at a reasonable rate,

Copyright trolls can turn to EU rules to demand compensation for infringed works on peer-to-peer networks but only if their requests are proportionate, Europe’s top court said on Thursday.

Claims by so-called copyright trolls have been rising as more individuals and companies aggressively pursue compensation for infringement of their rights.

The ruling on Thursday by the Court of Justice of the European Union (CJEU) involved Cypriot company Mircom which sued Belgian internet provider Telenet for the identity of users it alleges have shared its films via BitTorrent files.

A Belgian court sought guidance from the CJEU, asking if Mircom’s action to claim lump sum damages of €500 from each alleged infringer was covered by EU copyright laws.

Mircom was behaving like a copyright troll, CJEU court adviser Maciej Szpunar said in his non-binding opinion in December last year.

The CJEU said companies such as Mircom are backed by EU copyright laws but specified some conditions.

“A holder of intellectual property rights such as Mircom may benefit from the system of protection of those rights, but its request for information, in particular, must be non-abusive, justified and proportionate,” the judges said.

The Court said it wanted to ensure a high level of protection of intellectual property in the EU.

“The CJEU adopts a rather lenient/liberal position vis-a-vis copyright trolls. The main message is that copyright trolls are not per se excluded from the rights granted to copyright holders under the Enforcement Directive,” said Alexis Fierens, a partner at law firm DLA Piper.

“However, just like any other copyright holder, such rights must be exercised and enforced in a manner that is not abusive, unjustified or disproportionate,” he said. Fierens is not involved in the case.

The CJEU affirmed the ability of rights holders in general to be paid for their work on peer-to-peer networks even though those uploaded pieces are unusable in themselves and the uploading is automatically generated when the user is a BitTorrent client.

Mircom’s tactic of using another company to collect the IP addresses of infringing subscribers of peer-to-peer networks was also not precluded by EU laws, the judges said.

“However, initiatives and requests in that regard must be justified, proportionate, not abusive and provided for by a national legislative measure which limits the scope of rights and obligations under EU law,” they said.

The case is C-597/19 M.I.C.M.

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