Direct liability on the Internet arises when an Internet user uploads copyrighted files without authorization, reproduces copyright protected works or/and sells or distributes them against the right holder’s will or makes any derivatives/modifications of the protected work. In trademark, direct infringement occurs when a person without authorization uses a registered mark on or in connection with the sale, offering for sale, distribution or advertising of goods or services that is likely to cause confusion, or to cause mistake, or to deceive. Internet users, who perform such actions online without the authorization of the intellectual property right holder, are liable as primary infringers. Closely linked to such direct liability is the secondary (or derived) liability, which always presupposes a primary infringer. In the online environment such secondary liability is vested in internet service providers, such as search engines, hosting and access providers, etc., which facilitate the direct infringement by providing the technological tools and facilities, necessary for the commitment of the primary infringement. Direct infringers, who upload or use copyright protected works online, are often numerous, acting anonymously, and difficult to reach or identify. This has motivated copyright owners to prefer going after service providers, which have provided the technical means to make the primary infringements online possible, since this entails considerably less legal and practical issues. This has brought secondary liability to the forefront of online violations.
Hence, informing your customers about their legal rights and obligations regarding their online behaviour constitutes an important part for the maintenance of a stable consumer base and for ensuring your business’ welfare. Pursuant to Directive 2000/31/EC on certain legal aspects of information society services, in particular electronic commerce (called in short the e-Commerce Directive) providers of hosting, caching and transitory communication services are exempt from liability for the information hosted/cached/transmitted through their service, insofar as they play a passive role of an information carrier and do not have any knowledge of the unlawful content of the relevant information. However, service or network providers that wish to avoid any liability and comply with this ‘safe harbour’ provisions are required to expeditiously remove infringing materials upon obtaining knowledge of any illegal activity related to their services. This due care obligation will become more complex and costly for your business; if your customers are not given any prior guidance on how maintain a legally ‘safe’ behaviour. Hence, from a service provider’s standpoint the topic of protecting your customer base from conduct which will make them prone to direct liability inherently contains an element of self-protection from secondary liability.
Businesses can try to keep their customers ‘IP-conscious’ through various instruments, such as detailed terms and conditions to be accepted before commencing any activities, providing guidelines on how to use a service in a legally compliant way, etc.