Bundesgerichtshof [Federal Court of Justice of Germany], GEMA v. Rapidshare, I ZR 80/12

(1) This case concerns a dispute between the German copyright collecting society, GEMA, and the Swiss-based file-hosting service, RapidShare. GEMA sued RapidShare in Germany, alleging that over 4,800 copyrighted music files were shared via RapidShare without consent from GEMA or the right holders.

(2) According to the Court, although RapidShare’s business model is not primarily designed for violating rights, it nevertheless provides incentives to third parties to illegally share copyrighted content. It does so by (i) generating revenues through premium accounts which enhance massive data downloads, rather than on fees for storage space, as it is common for cloud computing; (ii) providing anonymous accounts to its user.; (iii) having an abuse rate of 5 to 6 percent - as acknowledged by Rapidshare - that corresponds to approximately 30,000 infringing acts daily.

(3) Therefore, the Court saw fit to impose some additional duties on RapidShare to mitigate infringements.  As the court announced earlier in  ATARI v. RapidShare (see below), RapidShare (and similar file-hosting services) should abide to more stringent monitoring duties.  File-hosting services are now required to actively monitor incoming links to discover copyrighted files as soon as there is a specific reason to do so and to then ensure that these files become inaccessible to the public.  As indicated by the Court, the service provider should use all possible resources - including search engines, Facebook, Twitter or web crawlers - to identify links made accessible to the public by user generated repositories of links.