File sharing

An overview of file sharing in Germany

For years, internet users in Germany have been receiving warning letters accusing them of infringing copyright through file sharing. There is even a special term used to describe the business model, namely ‘Abmahnwahn’ (warning letter craziness). Here are some tips on how to react to a letter.

An overview of file sharing in Germany © Benjamin-Duda-Fotolia

An overview of file sharing in Germany © Benjamin-Duda-Fotolia

File sharing warning letters

The term Abmahnung (warning letter) is notorious amongst internet users in Germany. They are regularly used to accuse internet users of infringing copyright through file sharing.

The aim of a warning letter is to settle a legal dispute out of court and with minimal cost.

The law firms that send file sharing warning letters, also known as copyright infringement notices, send them on behalf of their clients, who can sometimes be some of the biggest entertainment names in the business.

What demands are made?

File sharing warning letters draw the recipient’s attention to the illegal behaviour and often contain a range of demands.

Firstly, the recipient is required to submit an undertaking to cease and desist. Secondly, the sender requests payment of compensation for the copyright infringement. Thirdly, the sender demands payment of the legal fees incurred for investigating the infringement and sending the warning letter.

How to react

Recipients of file sharing warning letters should take the accusations seriously and react carefully.

a. Do nothing

It is not advisable for recipients of file sharing warning letters to do nothing. It is rare that a warning letter is sent without justification. If internet users do not return an undertaking to cease and desist in time, they risk being taken to court. The costs associated with court action can be high. It is therefore better that an undertaking is submitted.

b. Undertaking to cease and desist

However, caution is required. Recipients of warning letters should not send the pre-printed undertaking received from the opposition law firm. These are often drafted to the advantage of the opposition and can create far-ranging obligations. They often contain excessive contractual penalties, admissions of the obligation to pay the opposition’s legal costs and no clause allowing for modification of the obligations if the law changes.

It is therefore highly advisable for internet users accused of infringing copyright through file sharing to submit a modified undertaking to cease and desist.

The undertaking should only contain the absolute minimum of necessary information in order to satisfy the cease and desist demands. It should, for example, provide for a contractual penalty to be determined by the opposition at a later point in accordance with the principle of reasonableness, and allow for it to be subject to examination by the courts. The undertaking should permit the modification of the obligations, should the law change and it should contain no acknowledgement of debt.

Who sends the file sharing warning letters?

The copyright infringement notices are sent by German law firms who represent their clients, who in turn are the copyright holders.

Here is an overview (in alphabetical order) of some of the law firms active in the area of file sharing and some of the client’s they represent.

 Kornmeier & Partner Rechtsanwälte

  • Superstar Entertainment GmbH & Co. KG
  • Ministry of Sound Recordings (Germany)
  • Medialand GmbH
  • GSDR GMbH
  • Firma Baseprotect UG
  • Embassy of Music GmbH
  • MORE Music and Media GmbH & Co. KG
  • BigCityBeats GmbH
  • Out4Fame Entertainment GmbH
  • Lenz / Jankuhn GbR

Rasch Rechtsanwälte

  • EMI Music Germany GmbH & Co. KG
  • SONY BMG Music Entertainment (Germany) GmbH
  • Universal Music GmbH
  • Warner Music Group Germany Holding GmbH

Sasse & Partner Rechtsanwälte

  • Senator Film Verleih GmbH
  • Atlantic Streamline Holdings LLC, USA
  • Senator Home Entertainment GmbH
  • AFM-Records GmbH
  • Firma Splendid Film GmbH
  • UDR GmbH
  • Tiberius Film GmbH & Co. KG
  • Warner Music Group Germany Holding GmbH
  • polyband Medien GmbH
  • Elite Film AG, Switzerland

Urmann & Collegen (U+C Rechtsanwaltsgesellschaft mbH)

  • The Archive AG, Switzerland
  • Purzel Video GmbH
  • Magmafilm GmbH
  • Koch Media GmbH, Austria
  • Novitas Publishing GmbH
  • RTL Enterprises GmbH
  • Multi Media Verlag GmbH
  • FDUDM2 GmbH
  • Silwa Filmvertriebs AG
  • Malibu Media LLC., USA

Waldorf Frommer

  • Argon Verlag GmbH
  • Bastei Lübbe GmbH & Co. KG
  • CARLSEN Verlag GmbH
  • Constantin Film Verleih GmbH
  • DHV – Der Hörverlag GmbH
  • EMI Music Germany GmbH & Co. KG, represented by EMI Group Germany GmbH
  • Firma Warner Bros. Entertainment GmbH
  • SONY Music Entertainment Germany GmbH
  • Universal Music GmbH
  • Verlagsgruppe Lübbe GmbH & Co. KG
  • Warner Music Group Germany Holding GmbH
  • Universal Pictures Hamburg Film & Fernsehvertrieb GmbH
  • Twentieth Century Fox Home Entertainment GmbH

WeSaveYourCopyrights

  • Firma Nesola GmbH
  • Mary Applegate
  • Matthew Tasa
  • reFX Audio Software Inc.
  • Xtreme Sound GmbH

Recent developments

The file sharing landscape in Germany has undergone recent changes. On 9th October 2013 the Improper Business Practices Act (Gesetz gegen unseriöse Geschäftspraktiken) entered into force.

The main aim of the Act is to protect consumers from improper business practices in a number of areas. However, only weeks after the new rules were introduced, questions were being asked about their effectiveness to stem the flood of file sharing warning letters.

The industry remains a lucrative business. The number of warning letters sent and the amount of compensation being demanded remains high.

Transparency

The first area the legislation addresses is warning letter transparency. Law firms that send file sharing warning letters are supposed to breakdown the financial claims contained in the letters. However, the law firms have quickly adapted to the high transparency requirements.

Partner and lawyer at WILDE BEUGER SOLMECKE, Christian Solmecke notes, “We have seen that the amount of money being demanded varies from law firm to law firm. The suspicion arises that the numbers listed are completely arbitrary and it can sometimes be difficult for internet users to determine the true amount they are being required to pay. It is therefore more advisable than ever to seek legal assistance.”

Cap on legal fees cancelled out by high compensation

Under the new law, claim values are capped at 1,000 euros. In turn, this reduces the amount the law firms can claim in legal fees. However, the law firms have also adapted this new rule.

To “compensate” their “loss” they have now increased the amount of compensation they are demanding.

Christian Solmecke points out: “By requiring recipients of file sharing warning letters to pay increased compensation, the law firms can make up for the decreased legal fees. I assume that a presumably legal cross-financing deal has been agreed. Future court cases will no doubt reflect the level of compensation being sought.”

Warning letters and TV series

In addition, to increase revenue, the law firms have resulted to sending warning letters for individual episodes from TV series.

Internet users rarely download just one episode from a series. By itemising each individual series episode in a file sharing warning letter, the law firms can artificially increase the amount of compensation they demand.

Top 100

The same principle applies to the classic warning letter infringements called “German Top 100”.

Even though claim values have been capped by the new legislation, the law firms can demand 100 payments of compensation, in other words for each individual song. Compensation could therefore amount to €15,000.

“Whether the new amounts of compensation being sought will be accepted by the courts, remains to be seen,” Christian Solmecke concludes.

Exception to claim value cap

Furthermore, file sharing law firms are able to plead an exception to cap on claim values if it would be “unreasonable in the individual circumstances”.

Law firms could take advantage of this exception where a TV series is new and highly popular, especially if it is only available in the USA.

Christian Solmecke contends that, “it would be unreasonable for law firms to skew this exception by attempting to assert that the cap on claim values is unreasonable in every single file sharing case.”

However, it seems history may repeat itself. Under the previous legislation, legal costs were capped at 100 euros. However, due to the vague legal concepts used, the paragraph was rarely applied in practice, meaning that recipients of warning letters were often forced to pay much more.

Jurisdiction rules

One positive development in the file sharing saga since the introduction of the legislation on unfair business practices is that file sharing law firms are no longer at liberty to choose the court before which to bring their claim. This means that internet users will no longer be forced to travel the length of the country to defend a file sharing claim against them.

Summary of the amendments

The legislation on improper business practices has made some important changes to the file sharing landscape in Germany.

There are strict requirements on the content of warning letters and this does improve transparency; there is a cap on claim values and there are clear rules on exclusive jurisdiction.

Nevertheless, Christian Solmecke concludes that, “The new rules do not go far enough. The position in which internet users find themselves is hardly any better than that in which they were in before the legislation came into force.”

Christian Solmecke is a partner at the law firm WILDE BEUGER SOLMECKE. He is the author of numerous legal publications in the area of internet and IT law. He is also an associate lecturer for social media law at the Cologne University of Applied Sciences.

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