Germany's federal court of law, the Bundesgerichtshof (BGH), has decided that online file-hosting services are at least partly responsible for the contents of the files on their servers.
The legal wrangling started when Rapidshare deleted a file containing a pirated copy of the Atari game Alone in the Dark after the game company notified it of the copyright breach. Atari Europe decided to take the matter further, and went on to sue Rapidshare in order to force it to improve its anti-piracy measures.
The BGH has now overturned an earlier decision by the Higher Regional Court (Oberlandesgericht, OLG) in Düsseldorf which had found in Rapidshare's favour, after the company argued that it was impossible to check the contents of every file on its servers.
While its lawyers told the BGH that the company only offers file storing and transfer services, the argument failed to convince judge Wolfgang Kirchhoff: "The company is called Rapidshare and not Rapidstore," he said.
In its decision last week (Urt. v. 12.07.2012 - I ZR 18/11) the BGH ruled that file hosting in general is an accepted business model with perfectly legal use cases. However, it added, when a service provider is notified that a copyright violation has taken place, it must ensure by technical means that no further uploads of this kind happen.
Rapidshare must also browse its entire file collection to detect and delete pirated content, the court said. Should the service provider not carry out these measures, it will be liable for damages.
The BGH did leave Rapidshare some breathing room, however, by including a clause that anti-piracy measures must be within reasonable limits. What constitues "reasonable limits" is now up to the OLG Düsseldorf to decide, after the BGH handed the case back to the local court.