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Entrepreneurs: A recent ruling underscores the need for personal responsibility
In a ruling published today by the Frankfurt am Main Higher Regional Court (Case No. 4 W 13/23), it was made clear that entrepreneurs bear the responsibility for clarifying the copyright situation themselves and may not rely on service providers. This ruling has far-reaching implications for business practices and underscores the need for entrepreneurs to be aware of the legal aspects of their business.
The founder of the business, a paralegal, planned to build a professional existence by selling printed large pillowcases. The motifs were to be life-size images of the members of the South Korean boy band BTS, which customers could slip over cardboard stand-ups. It commissioned a company specializing in printing on textiles for just under €20,000. After payment of a good €11,000, the company pointed out that the start-up had to ensure a lack of copyright infringement. As a result, the start-up terminated the contract.
The Higher Regional Court of Frankfurt am Main declared the challenge declared by the founder of the business to be unfounded. It emphasized that it is part of general knowledge that one may not simply download images from the Internet without regard to third-party copyrights and then commercially exploit them oneself. It was held that there was no knowledge gap between the parties, as the business founder had acted as an entrepreneur and, as a paralegal, had had “at least some basic understanding of the legal system.”
The impact of the ruling and legal advice
This ruling has far-reaching implications for business practices. It underscores the need for entrepreneurs to be aware of the legal aspects of their business. Particularly with regard to copyright, it is important that business owners are aware that the responsibility for copyright compliance lies with them, not with the service provider.
Despite the district court’s rejection of a duty of disclosure on the part of the service provider and of deception, the Higher Regional Court granted partial legal aid to the business start-up. This was based on the assumption that the action could not be denied every prospect of success. The amount of the service provider’s expenses saved as a result of the termination was relevant to the amount of its repayment claim, among other things. For this purpose, the service provider would have to specifically state what has been missing up to now.
This ruling is an important reminder to all business owners that they should not blindly rely on third-party services. It is advisable to seek legal advice before embarking on any new business venture, especially when it involves the use of copyrighted material.
Marian Härtel is a lawyer and entrepreneur specializing in copyright law, competition law and IT/IP law, with a focus on games, esports, media and blockchain.
