The cloud, copyright, hosting and the law

When Mr Justice Floyd decided the other week that copyright infringement happens in the country the material in question is hosted in, it was tempting to think that he might have opened up a huge legal loophole.


When Mr Justice Floyd decided the other week that copyright infringement happens in the country the material in question is hosted in, it was tempting to think that he might have opened up a huge legal loophole.

After all, with Cloud computing allowing content to be hosted anywhere in the world, wouldn’t this give free rein to anyone who wanted to put bootleg movies online without fear of being sued?

Well, no. What His Lordship ruled upon was a rather more subtle and limited issue and it’s true to say that his decision strictly only affects one case. But it could still influence other decisions as the law grapples with the consequences of being able to easily put material online in far-off countries, and I’d argue that although Mr Justice Floyd was on the right general lines, he could have gone further in interpreting the law so as to avoid possible future confusion in such cases.

The actual court hearing in question was part of a case called Football Dataco v Sportradar. Football Dataco, as their name suggests, compile databases of football results. They’re based in the UK and their products are protected by both copyright and the related, but separate, database right. Sportradar are based in both Germany and Austria, and have hosted a sports result service on servers in both these countries. Football Dataco say that Sportradar are copying – and infringing – their content, and want to sue them.

Now the normal rule is that if you want to sue someone based in another country, that’s the place where you have to go to court. Naturally, Football Dataco would rather go to court in England – it’s closer – so they want a reason to persuade the English courts to, in legal terms, accept jurisdiction. They put forward several arguments as to why this should happen, and one of them was that the copyright and database infringement effectively happened in England.

One of the reasons that you’re allowed to sue a foreign defendant in an English court is if the wrongful act that they’re supposed to have done happened or caused damage here. And Football Dataco pointed to the act of ‘making available’ the copied results, which were on Sportradar’s servers. This, they said, made the infringing material available here in England, so making the case one that an English court could hear. Sportradar disagreed; they said that if there had been infringement (which of course they denied) then it would have been in Germany or Austria, where the servers actually are.

This isn’t a point that the English courts have had to rule on before, so Mr Justice Floyd looked to a related area of law for guidance. This was law about satellite broadcasts, where it has been established that what is termed the ‘Emission Theory’ applies: to quote the actual wording, copyright infringement happens at the place where the content is “introduced under the control of the person making the broadcast into an uninterrupted chain of communication”.

For a satellite broadcast, that place is the terminal that the signal is uplinked from. So if Sportradar had been broadcasting a bootleg transmission of a match from a terminal in Germany, the infringement would have happened in Germany, and an English court would not have taken the case (at least, not on that basis).

Mr Justice Floyd held that Emission Theory applied in this case, and so set out to find the equivalent of the satellite uplink. He decided that this was the server itself: the place that Sportradar made the results available was on that server, in Germany.

It was not in England, where the results were downloaded. He thus rejected jurisdiction on that basis. This wasn’t the end of the matter though, as he found other reasons why an English court did have a basis to hear the case.

So how important was his decision? Strictly speaking it was just a preliminary hearing before the main case, but there have been times in the past when such “interim decisions” are used by judges in other cases as a guide to the area of law in question. Even if this happens, though, Mr Justice Floyd wasn’t saying that there’s no copyright infringement if content is hosted overseas. Rather, he decided that the “making available” aspect infringement did not happen in England, and so it couldn’t form the basis of a claim in a court here.

But other aspects of copyright infringement might still happen in England, as was indeed found in this instance; Mr Justice Floyd found that Sportradar had been encouraging copyright infringement in England, and it seems likely that the same would be true in any similar ‘overseas hosting’ case.

Nonetheless, although the application of Emission Theory seems sensible, I’m not sure that Mr Justice Floyd applied it so as to get the most pragmatic result. As it stands, he held that the act of “making available” takes place where the server is located.

Now, in this particular case that was the same country as the alleged infringers were themselves operating (i.e. Germany or Austria). But Sportradar could in principle have hosted their content in the USA. Had they done so, this decision would have meant that the act of making available happened in a country with no connection to any of  Sportradar, Football Dataco or the main set of viewers or the material.

A better interpretation might be to say that, going back to the satellite broadcast model, the server isn’t the equivalent of the uplink site. Rather, it’s the equivalent of the satellite, and what corresponds to the uplink site (and so the place where content is “made available”) is the computer that the content was uploaded to the server from.

That is presumably one belonging to Sportradar, right in their home country. And that’s going to be true irrespective of which country they host the content in. After all, going back to that legal wording, this is just as much the place where the content was ‘introduced’, and it avoids needless complications with third countries.

There is admittedly an argument against this approach. The full legal principle of the emission theory includes the words “...into an uninterrupted chain of communication”. Is the communication interrupted by placing it on a server where it can be downloaded?

In terms of time, it is. But in terms of content – and that is what such disputes are about – it is not. Having been uploaded it is not changed or further edited in any way. I suggest that a chain of communication does not have to be a single flow to be uninterrupted; after all, a modern communication channel is likely to be packet-based, buffered and perhaps even sent over diverse routes, but that does not comprise ‘interruption’.

So, in summary, this decision isn’t a new general principle about where infringement happens in the Cloud. But it may well form the basis of future legal argument over where, for legal purposes, online infringement takes place.

If it does, it may be that simpler and more straightforward results might come from taking Mr Justice Floyd’s argument a bit further and saying that the place where content is made available is the place where someone clicks on “upload” rather than the location of the server it’s uploaded to.

Simon Bradshaw is a barrister, former electronics engineer and is a consultant at the Cloud Legal Project, Queen Mary, University of London, which produced the paper Contracts for Clouds: Comparison and Analysis of the Terms and Conditions of Cloud Computing Services.

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