It's Not Important Who You Are, But What You Do! Recent Italian Case-Law On Provider Liability

Article by Avv. Felix Hofer1

1. The stir caused by the so-called 'Google Case'2 had not entirely faded, when the issue of 'provider liability' shifted again in the focus of Courts on both sides of the Atlantic, in the US3 as well as in a number of European countries.

   The lawsuits primarily involve problems originating from the use of particular marketing techniques (such as online searches making use of keywords identical to registered trademarks) and from the presence on online platforms of third party (user generated) content, practices both deemed eventually capable of infringing on intellectual property rights. One of the main legal issues flagged to the Courts' attention is that of assessing to which extent providers – delivering 'communication services' - may benefit from liability exemptions with respect to illegal conduct performed or illegal content uploaded by their clients.

2. In Europe courts in countries members to the EU have to approach this aspect considering the provisions of the so-called 'E-Commerce' Directive4, which sets a range of general principles and criteria, meant to delimit the range of cases in which intermediary providers of services of the information society may be held liable for what their clients do on the platforms they are administering.

   The Court of Justice of the European Union (CJEU) on several occasions5 had to dwell into this problem and has offered some guidance on when and how intermediary providers may incur into liability while delivering their services.

   In a recent and widely commented decision (on the L'Oreal vs. eBay case)6 the Court's Grand Chamber gave, in its findings, relating to the specific aspect of provider liability for hosted third party content, the following indications7 (which – given the length of the decision – are necessarily reported here in summarized and therefore approximate terms)8:

   the fact that a provider administering an on-line platform offers its clients to 'memorize' their information does not imply liability exemption under article 14/1, automatically and in all cases, in order to achieve such effect (of exemption) it's required that the service delivered to clients does not exceed the context and role typical for an 'intermediary provider' (i. e. has to result strictly limited to performing the service 'neutrally' through merely technical and automated processing of the information received from clients), accordingly, any time a provider operating an online marketplace enters into an 'active role' (e. g. by extending its services in a way to achieve actual knowledge of the content or control over the information uploaded, or by providing assistance in promoting or optimizing users' data), he'll be prevented from legitimately claiming the exemption offered by Article 14/1, but even when an operator of an online platform maintains the role of a provider of services neutrally performed, he may become exposed to liability for hosted third party content when he has 'actual knowledge' (or based on fact s or circumstances could have easily achieved such awareness by making use of a level of diligence reasonable for an economic operator) about the presence of illegal information on its platform or of illegal activities conducted there, according to the provisions set by Article 14/1 the 'awareness requirement' refers to all situations in which the provider achieves - through any suitable mean - knowledge about unlawful content or activities (both, directly, e. g. as a result of a specific investigation, as well as indirectly, e. g. through a third party notification), while proper and expeditious reaction for taking down and blocking illegal content and conduct will also result relevant, it's up to national Courts examining and assessing, on a case-by-case basis, whether the factual premises and conditions giving raise to providers' liability are met or not, whether an online operator has stepped from the position of providing intermediary services neutrally into an 'active role', whether he has achieved (or based on a suitable level of 'diligence' could/should have had) knowledge about unlawful acts occurred on his platform and in case of such awareness and, finally, whether he has taken proper and timely action to prevent the continuation of such acts. In the light of such surrounding scenario – and specifically in the context of the tasks falling into the competence of national jurisdiction - Italian Courts recently had to decide on issues of provider liability.

   Again the controversy originated from assumed infringement of intellectual property rights.

3. In one case the local licensee and distributor of a foreign movie objected against three major Internet companies giving access – through their portals – to audiovisual files allowing to watch the particular movie.

   The Italian company argued that offering such unauthorized access resulted in counterfeiting and acts of unfair competition and therefore approached First Instance Court ("Tribunale") in Rome, Special Section competent on intellectual and industrial property, seeking a temporary injunction meant to:

   remove the links allowing unauthorized access to the movie, achieve measures suitable for preventing further infringement, obtain a penalty of Euro 1.000,00 for every minute (and of Euro 10.000,00 for every day) of delay in compliance, have the Court's cautionary measures published in a number of nation wide distributed newspapers. The defendants brought up several preliminary procedural issues and two of them actually succeeded in getting excluded from the proceeding after substantiating that their Italian subsidiaries did not offer and provide the services questioned by the plaintiff (being such services performed by companies and through technical equipment located outside of Italy in other countries). On the merits they claimed that they should benefit form the provider liability exemption as laid down in Directive no. 31 of 2000 and in the national implementing provisions9.

   The Court therefore allowed the injunction proceeding to stay against the third Internet company, felt that with respect to the remaining defendant the issue of a potential 'contributory infringement' (for giving unauthorized access to content protected by copyright) had to be considered and therefore

   Found10 that:

   web searches leading to a list of links giving access to source sites doe not imply, per se, an active and contributing role of the provider delivering the search results (which he doesn't know in detail neither does monitor or control in advance as to source sites' content), such position changes once the provider achieves specific knowledge about the fact that on certain source sites – identified by specific URLs - illegal content is present, as he then has the possibility of intervening ex post by preventing further indexing and access, the legal framework (both 'community law' as well as Italian regulations) currently governing the topic establishes a provider liability exemption – as an exception to the general principles set on liability – based on the presumption that pretending from online operators control on information available on the Internet would result in an unreasonable and excessively costly requirement, constituting the specific exemption an exception to the general rule, it could not be extended over the its logical context, i. e. the exemption from an obligation of general monitoring, and therefore could not be interpreted as an...