Copyright duties without legal basis: German BGH rules in favor of cloud users

If you are closely following what is happening regarding copyright and IT law, you will certainly have already read it: The Federal Court of Justice (BGH) recently settled a legal dispute between the Central Office for Private Transfer Rights (ZPÜ) and several providers of cloud services, including SecureCloud. As a result, our customers are spared additional copyright fees.

What had happened?

In September 2022, ZPÜ suddenly contacted us on behalf of VG Wort and VG Bild-Kunst and contacted several other cloud providers with the request to provide information about our customers and how they use our offer. The ZPÜ acts as a merger for a total of nine collecting societies in Germany and enforces copyright compensation claims arising from the reproduction of protected works. Since we provide our customers with storage space in the cloud, we — according to the basic argument of the ZPÜ — are also required to pay collecting companies because our customers could store private copies of copyrighted works in our cloud.

In order to be able to nominally estimate the corresponding amounts at all, the ZPÜ first wanted to collect detailed information on the use of our services. However, she had already been rejected by both the competent arbitration board at the German Patent and Trademark Office and the industry association Bitkom, as both could not identify any legal basis for copyright compensation claims for cloud storage.

Apart from the fact that providing the desired information would have been problematic under data protection law and would also have required an enormous amount of work for us, the legal basis of the ZPÜ's claim also appeared questionable to us. We have therefore failed to respond to the demands.

In November 2022, the ZPÜ offered us a further letter to sign an “agreement on the extension of the statute of limitations.” With this, claims could also have been asserted retrospectively over a longer period of time, although the legal situation was completely unclear. This letter also threatened us with initiating legal proceedings if the required “agreement” was not returned in due time.

When we also failed to comply with these demands, the ZPÜ filed a lawsuit against us at the Higher Regional Court (Higher Regional Court) Munich in December 2022 to force us to provide the desired information and to have the desired remuneration obligation determined.

However, we were of the opinion that cloud storage was not covered by Sections 54ff of the Copyright Act and therefore there was no obligation to pay any remuneration. For this reason, it was also in the interest of our customers that legal clarification of the facts was essential for us.

It was not until the beginning of March this year that we received the written verdict from the Higher Regional Court of Munich, which dismissed the ZPÜ's action in full. The Higher Regional Court did not objectively follow the opposing argument on a single point and also ruled out an appeal to the Federal Court of Justice.

However, the ZPÜ then filed a non-admission complaint with the Federal Court of Justice (BGH) in order to force the appeal. The appeal for non-admission has now been rejected by the BGH at the beginning of October, so that the actual proceedings have been completed and the previous judgment of the Munich Higher Regional Court has become final.

Consequences of the verdict

As a result of this last-instance victory in court, which we also won for our customers, we were spared impending price increases due to additional copyright charges. This good news therefore also applies to every other cloud storage system on the German market.

Experience has shown that the overall contracts that ZPÜ has already concluded with industry associations of manufacturers and importers of devices and storage media make the respective data carriers significantly more expensive: Since 01.01.2017, for example, 4.44 euros per unit have been charged for “consumer hard drives” for “consumer hard drives”, 1.33 euros per unit for “business hard drives”, and 0.30 for memory cards and USB sticks with a capacity of more than 8 gigabytes each Euro compensation per piece since 01.01 .2020 collected.

It was therefore to be assumed that we would have received significant compensation claims. We should have passed on the resulting additional costs, at least in part, to our customers.

All's well that ends well? No!

Unfortunately, the ZPÜ did not accept the judgments of the Higher Regional Court of Munich and the Federal Court of Justice, but announced them in a report published on its website as early as 16.10.2024: “We understand the compensation gaps resulting from the decisions of the Higher Regional Court of Munich and the Federal Court of Justice as a clear request to politicians to promptly create legal framework conditions that ensure fair remuneration for cloud copies. ”

It can therefore be assumed that the ZPÜ, as well as its affiliated collecting societies, will press the legislator to amend Sections 54 et seq. of the UrhG again in order to then be able to motivate industry associations to conclude new comprehensive contracts on the basis of the modified normative requirements.

However, in the interest of our customers, we will continue to strive to keep the additional effort and additional costs that may arise as a result as low as possible so that we can continue to offer you an attractive offer at fair costs!

_{Photo jplenio on pixabay}