Social network liability for copyright infringement by users: Gala Records v. VKontake

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The Arbitrary Court of Saint Petersburg and Leningrad Oblast in its decision of February 3rd, 2012 has delivered its ruling in the lawsuit filed by two companies-rights-holders, which are part of the group «Gala Records», against the social network «VKontakte». The court found that the administrator and the owner of the site vkontakte.ru must be liable for infringement of the companies-rights-holders’ exclusive rights on the soundtrack and the products of pop band «Infinity» as well as the singer Maksim.

The lawsuit was filed in the autumn of 2010. Representatives of VKontakte claimed that the musical content has been uploaded by users, who were liable for the violations, and the social network has taken all necessary measures provided by the applicable laws and judicial practices. In support of its position the social network provided the Court with the relevant information about users’ ip-addresses. However, it has been found impossible to determine by whom and from what ip-address audio files have been uploaded.

Rights-holders argued that VKontakte had violated their rights by broadcasting the products and phonograms and communicating it to the public, and that the social network should be held liable, because all the contents which are kept on the network’s server are under the control of the site administration only. In addition, the plaintiffs pointed  out that the social network doesn’t take measures to prevent violations, on the contrary VKontakte creating technological conditions for the violations.

The trial, which lasted almost one and a half years, ended in a victory for rights-holders. Court decided to seek from VKontakte compensation of 210000 rubles. The Court agreed that the social network is not responsible for content posted by users. Such a liability could only be found only in case VKontakte itself illegally uploads content. The functioning of social networks provides that the personal pages are managed by users.

According to a decision, it isn’t even proved that VKontakte received direct benefits from using of the content. Nevertheless, VKontakte was found guilty, because it didn’t properly and effectively respond to rights-holders’ complaints. Plaintiffs asked to remove the controversial content, but the social network only blocked the search by artist name and song title. The court found it insufficient.

According to Gala Records, this decision can be a powerful argument in the rivalry between the rights-holders and VKontakte, which accumulates approximately 70 percents of the pirated content as believed by some sources. However, Gala Records is likely to appeal the decision, demanding to increase compensation to the originally requested 1.05 million rubles. VKontakte will appeal the decision too.

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