News, Opinion

ECJ questions DRM systems

In its “Nintendo” decision (C-355/12 of 23 January 2014), the European Court of Justice confirmed the principles for the user-friendly interpretation of EU law on video games already set out for software in the “Usedsoft” decision (C-128/11 of 3 July 2012).

According to these principles, the principle of proportionality must be observed when assessing whether the circumvention (“cracking”) of a DRM system is prohibited. Only “devices” or “acts” which serve to commit copyright infringements are covered by the protective purpose of Art. 6(2) Rili, but not those which, in addition, are intended to impede bona fide users in the exercise of their rights of use. The courts of the member states must henceforth examine in each individual case whether a DRM system – to put it simply – only wants to prevent piracy or whether it binds the licence to a single device, for example.

Explosive connection between the two rulings

On the basis of the Usedsoft decision, it can be assumed that the courts of the member states will in future regard almost every software transfer for a one-time fee as a “purchase”, in which the transfer of the software cannot be prohibited. If a DRM system is used in this case, it was not allowed to be circumvented under German law, because it was assumed that the protection of § 69 f UrhG or § 95 UrhG was stronger than the right to transfer (distribution). The Nintendo Decision could change this, because in future the courts will also have to examine whether a DRM system is primarily intended to prevent the use of the software (by deleting the original copy) on another, proprietary device or also to prevent distribution. The interest in protection against piracy must therefore henceforth be weighed against the legitimate interests of the users.

RA Witte: “The ECJ has clarified that DRM systems may be used in such cases to verify the deletion of the original copy. However, it must be concluded from this and in the context of the decisions that in many other cases they overshoot their objective and only hinder the user in the exercise of his rights. This is exactly what the ECJ does not want to accept and now confirms in the Nintendo decision that users may overcome disproportionate and therefore illegal DRM systems in order to protect their rights. Should this view prevail, it is to be expected that the use of DRM systems to obstruct users is illegal and that manufacturers may be prohibited from using them”.

Right to self-help or even right to ban the DRM system?

In such cases, the restriction of a right of use to one device (CPU license) according to the general terms and conditions, as is common for Apple In-App purchases, for example, could in future become illegal in the EU area together with the DRM system used. Moreover, the use of illegal GTC is anti-competitive under German law, so that many companies who want to enforce such license restrictions in GTC must expect injunctions. Furthermore, the distribution and use of devices to circumvent copy protection, even if it must be considered “effective”, should no longer be generally illegal. It is also completely open how the courts will distribute the burden of proof. Anyone who claims a right to self-help must usually also prove the conditions of that right. Conversely, often only the manufacturers know about the exact functioning of the DRM system and the piracy figures. This is where principles to facilitate evidence could be applied.

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