Federal Constitutional Court rules in favor of both manufacturers

The Federal Constitutional Court reversed a very controversial decision of the Dresden Higher Regional Court in favor of my client and upheld a constitutional complaint filed by my client.

Key Facts

Federal Constitutional Court revised a controversial decision of the Dresden Higher Regional Court in favor of my client.
My client was previously sued by Blizzard Entertainment for copyright infringement.
The BVerfG found that the decision constituted a violation of the prohibition of arbitrariness pursuant to Art. 3 para. 1 GG represents.
Conformities with the territoriality principle were assessed incorrectly, which made the decision contradictory.
The Supreme Court criticized the assumption of an obligation to act to prevent copying abroad.
The constitutional complaint was successfully filed and processed by Härting Rechtsanwälte.
This decision protects my client's professional freedom and right to be heard.

In the final and legally binding proceedings, which form the basis of the enforcement proceedings under appeal, Blizzard Entertainment successfully sued my client for injunctive relief, information, and a declaration of liability for damages due to copyright infringement. After the appellant’s appeal was largely rejected by the Federal Court of Justice (judgment of October 6, 2016 – I ZR 25/15 -, GRUR 2017, p. 266 – World of Warcraft I), the injunction issued by the Regional Court became final to the extent that the appellant is prohibited from using it under penalty of the statutory order,

“himself or through third parties (including a legal entity represented by him) to reproduce the client software for the online games […] in whole or in part, permanently or temporarily for commercial purposes, in particular by copying parts of the client software for the online games […] onto the hard disk of a PC and/or loading them into the RAM […] for the purpose of producing and/or processing automation software for these games for commercial purposes”.

After the BGH ruling, my client ensured that no more reproductions took place in the Federal Republic of Germany. Nevertheless, enforcement proceedings ensued. Pursuant to Section 890 of the German Code of Civil Procedure (ZPO), Blizzard Entertainment sought the imposition of an order against the client for violations of the titled cease-and-desist order. The complainant had made changes to the bot software that necessarily required the client software to run.

After my client argued that its domestic employees had been instructed in writing not to continue using Blizzard Entertainment’s client software and that it was clear that other employees involved in the development of the bot software were not in Germany but abroad, the Leipzig Regional Court dismissed the applications for the imposition of regulatory remedies. The Regional Court could not recognize that the reproductions took place in the Federal Republic of Germany.

On Blizzard Entertainment’s immediate appeal, the Dresden Higher Regional Court ruled grotesquely otherwise.

It is true that, according to the principle of territoriality, the infringement of a domestic property right by a foreign act is in principle out of the question. In the present case, however, there is no purely foreign action. In the enforcement proceedings, the focus was not on an act of infringement against the domestic property right, but on an infringement against the prohibition of the title, which was limited to the domestic territory. Moreover, it is sufficient if part of the act is committed domestically. In the case in dispute, the infringement of the title had taken place in Germany. The scope of the prohibition title also extends to participation in reproduction by third parties committed in Germany. The fact that the reproduction could be prevented, which is not the case abroad, is not a prerequisite for the title prohibition of a shareholding. The title required the debtor not only to refrain from doing anything in Germany, but also to do anything in Germany that was necessary in the specific case to prevent future reproductions of the game’s client software by third parties – even abroad.

My client could not rely on the fact that the infringement had occurred without his involvement, but must also influence third parties insofar as their actions were within his sphere of influence and benefited him economically. The complainant had not complied with this requirement. It was already not evident that he had sufficiently instructed and instructed all employees of his company from Germany. In addition, my client had made data and information available via an Internet domain registered and accessible in Germany for the further development of its bots that were the subject of the proceedings in the event of changes to the creditor’s software, without taking action against this as required by the title. In making these changes, the complainant’s client software had been duplicated by third parties subject to the complainant’s influence.

After the Dresden Higher Regional Court had also rejected an objection to a hearing, we had to file a constitutional complaint, claiming a violation of professional freedom under Art. 12 Para. 1 GG, the prohibition of arbitrariness from Art. 3 Para. 1 GG, the right to be heard under Art. 103 Para. 1 GG and the requirement of certainty under Art. 103 Para. 2 GG, alternatively from Art. 2 Para. 1 in conjunction with Art. 20 para. 3 GG reprimand.

The Federal Constitutional Court has now upheld this constitutional complaint!

The BVerfG ruled that the impugned decision infringed my client’s fundamental right under Article 3 (3) of the Basic Law. 1 of the Basic Law in its form as a prohibition of arbitrariness.

A judge’s decision violates the general principle of equality in its form as a prohibition of objective arbitrariness (Article 3 (1) of the Basic Law) if it is not legally justifiable under any conceivable aspect and therefore imposes the conclusion that it is based on extraneous considerations – without it being a question of culpable action. This is to be determined on the basis of objective criteria. However, incorrect application of the law alone does not make a court decision objectively arbitrary. On the contrary, a decision of a specialized court is only untenable if an obviously relevant norm is not taken into account, the content of a norm is blatantly misunderstood or otherwise applied in a way that is no longer comprehensible.

The BVerfG expressed itself clearly and unequivocally:

For example

The Higher Regional Court […] did not establish that the client software was reproduced in Germany. In such an initial situation, however, neither acts of participation in reproductions abroad nor the mere exploitation of the information obtained in the process are covered by the operative part of the complaint.

Insofar as the Higher Regional Court sees this in the fact that the complainant designed the business model of the GmbH and caused the infringing conduct of the employees, it fails to recognize that the business model as such does not constitute a state of interference under copyright law.

Equally a slap in the face of a higher regional court, are the following statements of the BVerfG:

The Higher Regional Court itself also initially states that, according to the principle of territoriality, an infringement of a domestic property right by a foreign act cannot be considered. However, it is then contradictory to the extent that the injunctive relief should also include the domestic duty to do everything that is necessary and reasonable in the specific case to prevent future reproductions by third parties abroad. A breach of this duty to act shall then constitute an act of reproduction in Germany relevant under copyright law. This legal construction of a perpetual infringement is inherently contradictory due to the inconsistent application of the principle of territoriality, because even a participation act relevant under copyright law requires an unlawful and thus at least partially domestic principal act.

According to the above, the legal construction of the established duty to act is not sustainable from any conceivable point of view and, moreover, is inherently contradictory. On the contrary, it must be concluded that the assumed duty to act is based on extraneous considerations. In conclusion, the Higher Regional Court prohibits the worldwide production of the bot software itself, or the failure to ensure that it is not produced abroad by third parties associated with the complainant. However, this is obviously not covered by the cease-and-desist order, because it was not the subject of the preliminary proceedings, which were solely directed at prohibiting acts of reproduction of the creditor’s software that is the subject of the proceedings.

The entire decision is available here. By the way, thanks to the colleagues from Härting Rechtsanwälte, who handled the constitutional complaint in an exemplary manner and with whom it was always possible to work very constructively!

Author: Marian Härtel

Marian Härtel ist Rechtsanwalt und Fachanwalt für IT-Recht mit einer über 25-jährigen Erfahrung als Unternehmer und Berater in den Bereichen Games, E-Sport, Blockchain, SaaS und Künstliche Intelligenz. Seine Beratungsschwerpunkte umfassen neben dem IT-Recht insbesondere das Urheberrecht, Medienrecht sowie Wettbewerbsrecht. Er betreut schwerpunktmäßig Start-ups, Agenturen und Influencer, die er in strategischen Fragen, komplexen Vertragsangelegenheiten sowie bei Investitionsprojekten begleitet. Dabei zeichnet sich seine Beratung durch einen interdisziplinären Ansatz aus, der juristische Expertise und langjährige unternehmerische Erfahrung miteinander verbindet. Ziel seiner Tätigkeit ist stets, Mandanten praxisorientierte Lösungen anzubieten und rechtlich fundierte Unterstützung bei der Umsetzung innovativer Geschäftsmodelle zu gewährleisten.