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					Prof. Dr. Thomas Hoeren
Institute for Information, Telecommunications and Media Law
University of Muenster
Bispinghof 24/25
48143 Muenster




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July 2002
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   I. Introduction ..................................................................................................................... 8
   II. History of Information Law.............................................................................................. 9

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   I. Introduction ................................................................................................................... 15
   II. Technical Requirements............................................................................................... 16
      1. Hardware.................................................................................................................. 16
      2. Software................................................................................................................... 17
      3. Providers.................................................................................................................. 18
   III. Central Internet Services............................................................................................. 20
      1. E-mail....................................................................................................................... 20
      2. Discussion Groups ................................................................................................... 21
      3. FTP and Telnet ........................................................................................................ 23
      4. Gopher ..................................................................................................................... 24
      5. WWW....................................................................................................................... 25
   IV. National Connections.................................................................................................. 26
      1. European Foreign Countries..................................................................................... 27
      2. Other Foreign Countries ........................................................................................... 29

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   I. Practice of Address Registration ................................................................................... 33
      1. International Structures ............................................................................................ 33
      2. DeNIC eG................................................................................................................. 37
   II. Aspects of Trademark Law........................................................................................... 39
      1. Preliminary Questions of Conflict of Laws................................................................. 39
      2. Protection of Business Indications according to Trademark Law .............................. 41
      3. Protection of Titles according to § 5 [3] MarkenG ..................................................... 51
      4. Scope of § 826 BGB................................................................................................. 52
      5. General Name Protection according to § 12 BGB..................................................... 53
      6. Legal Consequences of an infringement of a trademark........................................... 56
      7. The Role of the DENIC............................................................................................. 58
      8. Reorganization of Domain Registration: UDRP, STOP and RDRP........................... 61
      9. Searching for Domains on the Internet ..................................................................... 66
      10. Domain as identification mark?............................................................................... 67

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   A. Introduction.................................................................................................................. 71
                                                  Thomas Hoeren-Internet Law                                                            II
B. Copyright law ............................................................................................................... 71
I. Questions of conflict of laws .......................................................................................... 74
II. Work capable of being protected.................................................................................. 78
   1. The catalogue of protected kinds of work ................................................................. 78
   2. Idea – Form.............................................................................................................. 79
   3. Height of creation ..................................................................................................... 80
   4. Pixel, sounds and bits .............................................................................................. 82
III. Industrial property and copyright protection law........................................................... 83
   1. Performing artists, §§ 73 – 84 UrhG ......................................................................... 84
   2. Producers of sound carriers, §§ 85, 85 UrhG ........................................................... 85
   3. Database producers ................................................................................................. 86
IV. Exploitation rights of the author................................................................................... 91
   1. Right of reproduction ................................................................................................ 91
   2. Adaptation ................................................................................................................ 94
   3. Public communication .............................................................................................. 95
   4. Right of distribution................................................................................................... 97
V. Personal rights of the author ........................................................................................ 97
   1. Prohibition of distortion ............................................................................................. 98
   2. The right to mention a name..................................................................................... 99
VI. Legal boundaries ........................................................................................................ 99
   1. Termination of protection period ............................................................................. 100
   2. Principle of exhaustion ........................................................................................... 101
   3. Public speeches (§ 48 UrhG).................................................................................. 102
   4. Newspaper articles (§ 49 UrhG) ............................................................................. 102
   5. Freedom of citation (§ 51 UrhG) ............................................................................. 105
   6. Indexation and preparation of abstracts.................................................................. 108
   7. Public, gratuitous communication, § 52 UrhG......................................................... 109
   8. Reproduction for personal use................................................................................ 110
   9. Compulsory Licenses in Antitrust Law .................................................................... 118
   10. Reform of Limitations?.......................................................................................... 120
VII. Copyright Collecting Societies ................................................................................. 123
   1. Gema ..................................................................................................................... 124
   2. VG Wort ................................................................................................................. 126
   3. VG Bild-Kunst......................................................................................................... 127
   4. Reform considerations............................................................................................ 129
VIII. Possibilities for transfer of rights via license agreement .......................................... 132
   1. Introductory considerations .................................................................................... 132


                                              Thomas Hoeren-Internet Law                                                         III
     2. The demarcation of rights of use ............................................................................ 133
     3. Scope of § 31 [4] UrhG: Internet as an unknown type of use.................................. 140
     4. The legal position of an employed multimedia- developer ...................................... 142
     5. Licenses in insolvency............................................................................................ 146
  IX. Code as code – protection of and against copy mechanisms.................................... 148
  X. Consequences of an infringement.............................................................................. 150
     1. Criminal sanctions .................................................................................................. 150
     2. Claims under civil law ............................................................................................. 152
  XI. Patent law................................................................................................................. 154
     1. Basic structures of patent law................................................................................. 155
     2. Patentability of software and business ideas .......................................................... 155
     3. Patent law in employment relations ........................................................................ 158

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  I. Choice of law aspects ................................................................................................. 161
  II. Applicable regulations ................................................................................................ 166
     1. Specific regulations with legal, competitive content ................................................ 166
     2. General competition law (§§ 1, 3 UWG) ................................................................. 180
     3. Questions of procedural law ................................................................................... 194

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  I. Questions of conflict of laws ........................................................................................ 196
     1. UN Convention on Contracts for the International Sale of Goods ........................... 196
     2. Main features of the EGBGB .................................................................................. 197
     3. Special points of contact......................................................................................... 199
     4. Special features of insurance law ........................................................................... 199
  II. Conclusion of contracts on the Internet ...................................................................... 200
     1. General rules.......................................................................................................... 201
     2. Conclusion of contracts in online auctions.............................................................. 203
  III. Avoidance, authority and receipt of electronic declarations of intent.......................... 205
     1. Legal situation according to the BGB...................................................................... 205
     2. The Electronic Commerce Directive ....................................................................... 207
  IV. Written form and digital signature.............................................................................. 208
     1. Directive on E-Commerce, Electronic Signature Directive and written form ............ 208
     2. New regulations regarding form.............................................................................. 210
     3. Specific characteristics of insurance law (§ 10 a VAG) ........................................... 212
     4. Form and money laundering................................................................................... 215
     5. General meetings and Internet ............................................................................... 215
     6. E-procurement and form......................................................................................... 216
                                                Thomas Hoeren-Internet Law                                                       IV
  V. Probative value of digital documents.......................................................................... 217
     1. Free evaluation of the evidence.............................................................................. 217
     2. Evidential stipulation............................................................................................... 218
     3. Amendment of laws................................................................................................ 218
     4. Directive on Electronic Signatures and the new Signature Act................................ 219
     5. Digital signature: technical application.................................................................... 222
  VI. The law of the General Conditions of Trade.............................................................. 228
  VII. Means of payment in electronic business................................................................. 231
  VIII. Consumer protection on the Internet ....................................................................... 235
     1. Questions of conflict of laws ................................................................................... 235
     2. Haustürwiderrufsgesetz (Revocation of Door-to-Door Sales and Similar Dealings Act)
      239
     3. Consumer credit provisions .................................................................................... 240
     4. Distance selling provisions ..................................................................................... 242
     5. Directive on Financial Services............................................................................... 253
     6. Summary: Obligations of merchants in e-contracting.............................................. 256

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  I. In advance: special personal rights ............................................................................. 257
  II. Previous history of data protection law ....................................................................... 258
     1. Previous history until the BDSG 1991..................................................................... 258
     2. The EU data protection directive and the second amendment of the BDSG. .......... 260
  III. Questions of conflict of laws ...................................................................................... 261
  IV. Basic structure of data protection law ....................................................................... 263
     1. Personal data, §3 [1] BDSG ................................................................................... 264
     2. Protected processing phases, §3 [4] to 7 BDSG..................................................... 267
  V. Basis of authorization................................................................................................. 271
     1. Consent.................................................................................................................. 271
     2. Collective agreement / union contract – introduction to internet and labor law........ 273
     3. Statutory authorization............................................................................................ 275
  VI. Liability for incorrect or unlawful data processing ...................................................... 282
     1. Contractual claims.................................................................................................. 282
     2. §§ 823 seqq. BGB .................................................................................................. 282
  VII. Special regulations for the online-sector .................................................................. 285
     1. Data protection in the telecommunications sector: TKG and TDSV ........................ 286
     2. TDDSG and MDStV ............................................................................................... 289
  VIII. A selection of special topics .................................................................................... 291
     1. Web-cookies .......................................................................................................... 291

                                               Thomas Hoeren-Internet Law                                                         V
      2. Logging of utilization data to combat abuse............................................................ 294
      3. Outsourcing............................................................................................................ 295
      4. Data mining and data warehousing ........................................................................ 298
      5. Cross-border exchange of data .............................................................................. 299
      6. Data protection in insolvency.................................................................................. 302

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  I. Preliminary questions of conflict of laws ...................................................................... 305
  II. The TDG in its revised version ................................................................................... 306
      1. The content-provider .............................................................................................. 307
      2. The access provider ............................................................................................... 310
      3. The host provider ................................................................................................... 312
      4. Liability for hyperlinks ............................................................................................. 314
      5. Liability for other intermediaries.............................................................................. 316
  III. The Media Services State Treaty .............................................................................. 317
  IV. Insurability ................................................................................................................ 318

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  I. Jurisdiction for intellectual property infringements ....................................................... 322
      1. Inner-German cases............................................................................................... 322
      2. International jurisdiction.......................................................................................... 323
  II. Jurisdiction in contractual matters .............................................................................. 327
  III. Enforcement of judgments......................................................................................... 328
  IV. Online dispute settlement.......................................................................................... 328




                                                Thomas Hoeren-Internet Law                                                         VI
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ABl. EG   Amtsblatt der Europäischen Gemeinschaften
Abs.      Absatz
AG        Amtsgericht (Local Court)
AGBG      Gesetz zur Regelung des Rechts der Allgemeinen Geschäftsbedingungen
AHB       Allgemeine Haftpflichtbedingungen
AJP       Aktuelle Juristische Praxis (Zeitschrift)
AOL       American Online
APNIC     Koordinierungsstelle für Domainnamen in Asien
ArchPT    Archiv für Post und Telekommunikation (Zeitschrift)
ARPA      Advanced Research Projects Agency
AuA       Arbeit und Arbeitsrecht (Zeitschrift)


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BAG       Bundesarbeitsgericht (German Labor Court)
BB        Betriebs-Berater (Zeitschrift)
BDSG      Bundesdatenschutzgesetz
BFH       Bundesfinanzhof (Federal Fiscal Court)
BGB       Bürgerliches Gesetzbuch
BGBl.     Bundesgeseztblatt
BGH       Bundesgerichtshof (Federal Supreme Court)
BMFT      Bundesministerium für Forschung und Telekommunikation
BMJ       Bundesministerium der Justiz (Federal Ministry of Justice)
BRAO      Bundesrechtsanwaltsordnung
BR-DrS    Bundesrats-Drucksache
BT-DrS    Bundestags-Drucksache
Btx       Bildschirmtext (interactive videotex)
BVerfG    Bundesverfassungsgericht (Federal Constitutional Court)
BVerwG    Bundesverwaltungsgericht (Federal Administrative Tribunal)
B2B       Business to Business
B2C       Business to Consumer


                                  Thomas Hoeren-Internet Law                    1
&
CD-ROM Compact Disc- Read only Memory
CERN     Kernforschungszentrum in Genf
CF       Computer Fachwissen (Zeitschrift)
cic      Culpa in contrahendo
CISG     Convention on the International Sale of Goods
CMMV     Clearingstelle Multimedia für Verwertungsgesellschaften von Urheber- und Leistungsschutzrec
Core     Internet Council of Internet Registrars
CPU      Central Processing Unit
CR       Computer und Recht (Zeitschrift)


'
DAB      Digital Audio Broadcasting
DB       Der Betrieb (Zeitschrift)
DENIC    Interessenverband Deutsches Network Information Center
DFÜ      Datenfernübertragung
DGRI     Deutsche Gesellschaft für Recht und Informatik
DIGI     Deutsche Interessengemeinschaft Internet
DNS      Domain Name System
DRiZ     Deutsche Richterzeitschrift
DuD      Datenschutz und Datensicherheit (Zeitschrift)
DV       Datenverarbeitung
DVD      Digital Versatile Disc
DVBl.    Deutsches Verwaltungsblatt (Zeitschrift)


(
ECLIP    Electronic Commerce Legal Issues Platform
ECLR     European Comparative Law Review
ECMS     Electronic Copyright Management Systems
E-Commerce Electronic Commerce
EDI      Elerctronic Data Interchange
EDV      elektronische Datenverarbeitung
EGBGB    Einführungsgesetz zum Bürgerlichen Gesetzbuche
EGG      Elektronischer Geschäftsverkehrgesetz
                                  Thomas Hoeren-Internet Law                          2
EIPR       European Intellectual Property Review
e-mail     Electronic Mail
EU         European Union
EuGH       Europäischer Gerichtshof (European Court of Justice)
EuGVÜ      Europäisches Übereinkommen über die gerichtliche Zuständigkeit und die Vollstreckung
           gerichtlicher Entscheidungen in Zivil- und Handelssachen
EuZW       Europäische Zeitschrift für Wirtschaftsrecht
EWR        Europäischer Wirtschaftsraum


)
FernAbsG Gesetz über Fernabsatzverträge und andere Fragen des Verbraucherrechts
FTC        Federal Trade Commission
FTP        File Transfer Protocol


*
GEMA       Gesellschaft für musikalische Aufführungsrechte
GewO       Gewerbeordnung
GRUR       Gewerblicher Rechtsschutz und Urheberrecht (Zeitschrift)
GRUR Int. Gewerblicher Rechtsschutz und Urheberrecht International (Zeitschrift)
gTDL       generic Topleveldomain
GVBl.      Gesetzes- und Verordnungsblatt
GVL        Gesellschaft zur Verwertung von Leistungsschutzrechten


+
HGB        Handelsgesetzbuch
HTML       Hyper Text Markup Language
HTTP       Hyper Text Transport Protocol
HWG        Heilmittelwerbegesetz
HWiG       Gesetz über den Widerruf von Haustürgeschäften und ähnlichen Geschäften


,
IAHC       International Ad Hoc Committee
IANA       Internet Assigned Numbers Authority
ICANN      Internet Corporation for Assigned Names and Numbers
                                    Thomas Hoeren-Internet Law                         3
ICC        International Chamber of Commerce
IHK        Industrie- und Handelskammer
IMP        Interface Message Processor
InterNIC   Internet Network Information Center´s Registration Service
IP         Internet Protocol
IPR        Internationales Privatrecht (Private International Law)
IPRax      Praxis des Internationalen Privat- und Verfahrensrechts (Zeitschrift)
IRC        International Relay Chat
ISDN       Integrated Services Digital Network
ISO        International Organization for Standardization
ISOC       Internet Society
ITM        Institute for Information, Telecommunications and Media Law
ITLP       International Trade Law Project
ITU...     International Telecommunications Union
IuKDG      Informations- und Telekommunikationsdienstegesetz
IZVR       Internationales Zivilverfahrensrecht


.
K&R        Kommunikation und Recht (Zeitschrift)
KJ         Kritische Justiz (Zeitschrift)
KUG        Kunsturheberrechtsgesetz
KWG        Kreditwesengesetz


/
LAG        Landesarbeitsgericht (District Labour Court)
LG         Landgericht (Regional Court)
LMBG       Lebensmittelbedarfsgesetz
LRG        Landesrundfunkgesetz
LUG        Literatururheberrechtsgesetz
LuGÜ       Lugano-Übereinkommen


0
MA         Markenartikel (Zeitschrift)
MarkenG Gesetz über den Schutz von Marken und sonstigen Kennzeichen
                                   Thomas Hoeren-Internet Law                      4
MDR        Monatsschrift für deutsches Recht (Zeitschrift)
MDStV      Mediendienstestaatsvertrag
MMR        Multimedia und Recht (Zeitschrift)
MMRCS      Multimedia Rights Clearance Systems


1
NJW        Neue Juristische Wochenschrift (Zeitschrift)
NJW-CoR Neue Jurististische Wochenschrift - Computerreport (Zeitschrift)
NJW-RR Neue Juristische Wochenschrift/Rchtsprechungsreport
NSI        Network Solutions Inc.
NW         Nordrhein-Westfalen
NZA        Neue Zeitschrift für Arbeitsrecht
NZV        Netzzugangsverordnung


2
OECD       Organisation for Economic Co-Operation and Development
OEM        Original Equipment Manufacturer
OLG        Oberlandesgericht (Higher Regional Court)
ONP        Open Network Provision
OVG        Oberverwaltungsgericht (Administrative Appeals Tribunal)


3
PatG       Patentgesetz
PC         Personal Computer
PersR      Der Personalrat (Zeitschrift)
pFV        positive Forderungsverletzung
PIN        Personal Identification Number
POP        Point of Presence
PTRegG     Regulierungsbehörde für Post und Telekommunikation
PVV        Positive Vertragsverletzung


5
RabelsZ    Rabels Zeitschrift für ausländisches und internationales Privatrecht
RAM        Random Access Memory
                                  Thomas Hoeren-Internet Law                      5
RBÜ       Revidierter Berner Übereinkunft
RdA       Recht der Arbeit (Zeitschrift)
RDV       Recht der Datenverarbeitung (Zeitschrift)
RdW       Recht der Wirtschaft (Zeitschrift)
RefE      Referentenentwurf
RegE      Regierungsentwurf
RegTP     Regulierungsbehörde für Post und Telekommunikation
RIPE-NCC Réseaux Internet Protocol Européen Network Coordination Center
RIW       Recht der internationalen Wirtschaft (Zeitschrift)


6
SET       Secure Electronic Transaction
SigG      Signaturgesetz
SigV      Signaturverordnung
SSL       Secure Socket Layer
StBerG    Steuerberatungsgesetz


7
TBDF      Transborder Data Flow
TDDSG     Teledienstedatenschutzgesetz
TDG       Teledienstgesetz
TDSV      Telekommunikationsdatenschutzverordnung
TKG       Telekommunikationsgesetz
TKR       Telekommunikationsrecht
TKV       Telekommunikationskundenschutzverordnung
TLD       Topleveldomain


8
UDRP      Uniform Dispute Resolution Procedure
UFITA     Archiv für Urheber-, Film-, Funk- und Theaterrecht (Zeitschrift)
UN        United Nations
UNCITRAL United Nations Commission on International Trade Law
Unverö    unveröffentlicht (unpublished)
UrhG      Urheberrechtsgesetz
                                  Thomas Hoeren-Internet Law                 6
URL       Uniform Respurce Locator
US        United States
UWG       Gesetz gegen den unlauteren Wettbewerb


9
VAG       Versicherungsaufsichtsgesetz
VAR       Value Added Reseller
VDZ       Verband Deutscher Zeitschriftenverleger
VerbrKrG Verbraucherkreditgesetz
VERDI     Very Extensive Rights Data Information (Projekt der EU)
VersR     Versicherungsrecht (Zeitschrift)
VG        Verwertungsgesellschaft (Copyright Collecting Society)
VO        Verordnung
VuR       Verbraucher und Recht (Zeitschrift)
VPRT      Verband Privater Rundfunk und Telekommunikation
VVG       Versicherungsvertragsgesetz


:
WCT       World Copyright Treaty
WIPO      World Intellectual Property Organization
WM        Wertpapier-Mitteilungen (Zeitschrift)
WPPT      World Performers and Producers Right Treaty
WRP       Wettbewerb in Recht und Praxis (Zeitschrift)
WTO       World Trade Organisation
WuW       Wirtschaft und Wettbewerb (Zeitschrift)
WWW       World Wide Web


=
ZfA       Zeitschrift für Arbeitsrecht
ZIP       Zeitschrift für Wirtschaftsrecht
ZUM       Zeitschrift für Urheber- und Medienrecht
ZUM-RD Zeitschrift für Urheber- und Medienrecht/Rechtsprechungsdienst
ZPO       Zivilprozeßordnung
ZZP       Zeitschrift für Zivilprozeß
                                 Thomas Hoeren-Internet Law             7
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Information Law is a new legal discipline whose roots are vague. This is due to the fact that
the focus of this subject cannot be distinctly defined. Nobody knows exactly what information
is. Indeed everybody seems to know what information is but without being able to define it
concretely.1 Negative definitions are often used, for example: information is not concrete, not
tangible, not limited in time. Such paraphrases are not helpful. Positive statements such as:
information is a “third original state of the world”, a “new kind of reality” besides the mate-
rial and intellectual reality, a “structural linking”, a “third universal basic element” are also
vague. These nebulous statements correspond to a multitude of information terms coming
from several special fields. The most sophisticated attempts to define information distinguish
between information as a process, as a subject, as an object and as a system. After all, infor-
mation describes semantically every relation of knowledge to every real or unreal subject-
matter in the world.2 But this definition is without any contours or boundaries. Nevertheless
there is obviously an economic value, which justifies assigning it to a single person. But one
has to take into account that this value can hardly be realized, because information can lose its
value in the moment that it is communicated to others; its only value might be that nobody
knows it.


At last the term “information law” can only be understood if it is seen in a phenomenological
way. It defines a cross-section matter which encloses phenomena like
      • the internet
      • soft- and hardware
      • art trade
      • radio and TV
      • music, theatre, film, photography, print media.


But information law is not a generic term for a loose collection of different subjects. Rather
information law contains a central question: How, to whom, when and why are exclusive
rights of information granted? This central question can be divided into separate problems.
For example in information law it has to be asked:

1
    See Wilhelm Steinmüller, Informationstechnologie und Gesellschaft, Darmstadt 1993, 189.

                                          Thomas Hoeren-Internet Law                           8
      • Which exclusive rights exist (e.g. intellectual property rights)?
      • How can these rights be separated from each other?
      • How can the public interest of free access to information be protected?
      • Which kinds of public interest justify prohibition of the use of information?


Regarding this it must be taken into account that information has – for lawyers of private law
- an unpleasant attribute: it is by nature available free of charge and intended to be dissemi-
nated. Therefore it is not suited for the creation of exclusive rights. Such rights can be created
reasonably only if a special reason for the granting of exclusive rights exist and insofar clear
and outwardly explicit criteria for the assignment exist. In dubio pro libertate – every doubt
about the reasonability of an information right is in favor of the freedom of information..



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Information law had its historical starting point in the early seventies when along with the
increasing significance of electronic data processing its risks also came under public discus-
sion. An extensive discussion about the protection of personal data began which was politi-
cally associated with the Social Democratic Party (SPD). In the following years the first Data
Protection Laws were enacted in Hessen (1974) and at federal level (1979). After the Census
of Population judgment (1983) the argument about the possibilities and limits of data protec-
tion appeared in public once more before disappearing again until today.


Within other fields the discussion began only slowly. At the start, “first generation issues”
were dealt with, especially the question of the applicability of traditional standard works to
software and hardware. So judicial decisions and literature dealt with the copyrightability or
the possible quality of software as a material asset. When these principle questions were clari-
fied by the judiciary the “second generation issues” were coming up, special questions like
the definition of duplication concerning random-access memory.


Research moved in calm waters until the late eighties when new topics came to the fore
through multimedia and internet. Up till now, research seems to have become stuck at “first
generation issues”. Several contributions have been published concerning the applicability of

2
    See also Welp, IuR 1988, 443, 445.
                                         Thomas Hoeren-Internet Law                             9
traditional advertising law to online marketing or protection against domain-grabbing. Mean-
while discussion has come down to a normal level. After the clarification (with the help of
amendments) that traditional regulations can be applied to internet-facts, we now enter a
phase now where questions of details must be clarified.


However, to date it has not been possible to constitute a clear dogmatic system of information
law. The connection between the different facets of information law awaits clarification and
discussion.




                                  Thomas Hoeren-Internet Law                               10
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There is not very much introductory literature concerning information law. The publishing
scene is still determined by a multitude of individual treatises and introductions on partial
aspects like data protection law or data processing contract law. In other respects you have to
note that the danger of obsolescence is great in information law: due to the fast pace of legis-
lation and jurisdiction in this field works are mostly obsolete when they are published. There-
fore you have to read works within this field (including this one) very carefully and scrutinize
them critically on current developments.
References to introductory literature concerning partial fields can be found in front of the re-
spective chapters of this work. Recommended basic literature is:


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                                     Thomas Hoeren-Internet Law                              11
Regarding professional journals there is a trend towards a flood of information. A multitude
of new journals has been issued during the last few years; obviously a lot of publishers see an
opportunity. But the quality of the contributions often leaves much to be desired; lots of con-
tent recurs, so you need to pay attention while reading. In detail, there are the following jour-
nals and law reviews in Germany (in alphabetical order):


   • Archiv für Post und Telekommunikation (ArchPT)
   • Archiv für Presserecht (AfP)
   • Computer und Recht (CR)
   • Computer und Recht international
   • Computerrecht intern, Praxis des EDV-, Multimedia- und Telekommunikationsrechts
   • Datenschutz-Nachrichten (DANA)
   • Datenschutz und Datensicherung (DuD)
   • Datenverarbeitung, Steuer, Wirtschaft, Recht (DSWR)
   • Datenverarbeitung im Recht (DVR; stoppen 1987))
   • Gewerblicher Rechtschutz und Urheberrecht (GRUR)
   • Gewerblicher Rechtsschutz und Urheberrecht. Internationaler Teil (GRUR Int)
   • Informatik und Recht (IuR; stopped 1988)
   • Kommunikation & Recht (K&R)
   • Kunst & Recht (KR)
   • Mutimedia und Recht (MMR)
   • Neue Juristische Wochenschrift. Computerreport (NJW-CoR)
   • Öffentliche Verwaltung und Datenverarbeitung (ÖVD; stopped1986)
   • Recht der Datenverarbeitung (RDV)
   • Zeitschrift für das gesamte Recht der Telekommunikation (RTkom)
   • Zeitschrift für Urheber- und Medienrecht (ZUM).


Austria:
   • Ecolex
   • Medien und Recht
   • Rundfunkrecht (RfR).



                                    Thomas Hoeren-Internet Law                                12
Switzerland:
    • sic!
    • Digma/Zeitschrift für Datenrecht und Informationssicherheit


In the international context the situation on the journal market is unclear and confusing. Here
is only a selection:
    • Actualidad Informatica Aranzadi (E)
    • Auteurs & Media (B)
    • Berkely Technology Law Journal (UK)
    • Columbia Visual Arts & Law Journal (USA)
    • Communications Law (Tolley`s)
    • Computer Law & Practice (UK)
    • Computer Law & Security Report (UK)
    • The Computer Lawyer (USA)
    • Computerrecht (NL)
    • EDI Law Review (NL)
    • European Intellectual Property Review (UK)
    • Information & Communications Technology Law (UK)
    • Informatierecht (NL)
    • Jurimetrics (USA)
    • Lamy Droit de l´informatique (F)
    • Revue internationale de Droit d´Auteur (F)
    • Rutgers Computer & Technology Law Joural (USA)
    • The John Marshal Journal of Computer & Information Law (USA)
    • Vanderbilt Journal of Law & Technology (USA)
    • World Intellectual Property Law (USA)


As far as research in specialized libraries is concerned, you need to bear in mind that informa-
tion law is a very new discipline which is located at only a few universities. The inexperi-
enced researcher will be disappointed if he or she tries to acquire relevant works through the
local faculty library. Libraries of the following institutions can be recommended:




                                   Thomas Hoeren-Internet Law                                13
   • Max-Planck-Institute für ausländisches und internationales Patent-, Urheber- und Wett-
     bewerbsrecht (Munich)
   • Institut für Rechtsinformatik (Universität Saarbrücken)
   • Institut für das Recht der Informations- und Kommunikationstechnik (Humboldt Uni-
     versität Berlin)
   • Professur für Arbeitsrecht und Bürgerliches Recht, Rechtsinformatik, insbesondere Da-
     tenschutz (Universität Frankfurt/M.)
   • Institut für Rechtsinformatik (Universität Hannover)
   • Zentrum für Rechtsinformatik (Universität Karlsruhe)
   • Gerd Brucerius-Stiftungsprofessur für Kommunikationsrecht (Universität Rostock)
   • Institut für Informations-, Telekommunications- und Medienrecht/ITM (Universität
     Münster)
   • Institut für Urheber- und Medienrecht (Munich)


In other European countries there are:
   • Institut voor Informatierecht (Universiteit Amsterdam/Netherlands)
   • Centre des Recherche Informatique et Droit/CRID (Université de Namur/Belgium)
   • Centre for Advanced Studies (London)
   • Institut für Rechtsphilosophie, Rechtssoziologie und Rechtsinformatik der Karl-
     Franzens-Universität Graz
   • Interdisciplinary Centre for Law & Information Technology (Leuven)
   • Norwegian Research Center for Computers and Law/NRCCL (Oslo)
   • Queen Mary and Westfield College/QMW (London)
   • Centre d’Estudis de Dret i Informática de Balears (Palma de Mallorca)


In the USA there are research institutes e.g. at the Harvard Law School: „Berkman Center for
Internet & Society“ and at the Yale University: „Center for Internet Studies“. Further research
institutes are at the Columbia Law School (New York) and the Universities of Stanford and
Berkeley.




                                   Thomas Hoeren-Internet Law                               14
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The Internet is an extensive network of all networks. The trigger for its development was the
cold war. In 1969 the United States Ministry of Defense ordered a research project from the
Advanced Research Projects Agency (ARPA) which became known under the name ARPA-
net (Advanced Research Projects Agency experimental pocket-switched network).
The project was intended to serve for interchanging data between different computers spread
all over the country and for working with all programs of other computers on one computer.
For the armed forces the most important characteristic was to maintain the transfer of data
despite a partial destruction of the communication network in case of a nuclear war.
Therefore, special computers, so called IMPs (Interface Message Processor) were developed.
They transferred data from totally different computers in one format independent of any ma-
chine and then transmitted them to remote IMPs. By connecting one IMP with several or all
other IMPs data communications were guaranteed through the other IMPs in the case of a
breakdown or destruction of the transmission network.
In 1971 23 military computers were connected via the Internet – today there are more than 30
million computers online.
In the meantime the Internet has been extended by commercial companies. Today it is a com-
pound system of different partial networks of mostly commercial companies. In Germany
operating companies are in particular Deutsche Telekom, the Wissenschaftsnetz (DFN),
                                  Thomas Hoeren-Internet Law                                 15
UUNet, AOL and others. They manage their partial networks and provide gateways that can
interconnect dissimilar networks. The largest gateway is the DECIX in Frankfurt where al-
most all big German providers are linked-up. The transition between the networks is transpar-
ent to the users, that means they do not know which networks their data goes through.
The importance of the non-commercial FidoNet has been reduced by the increasing dissemi-
nation of the internet. The FidoNet is a worldwide union of privately provided computers
(“Nodes”) which exchange data over direct connections pursuant to the Store-and-Forward-
Principle and which also have interfaces to the Internet.3
Besides Internet and FidoNet there are also commercial online services but their importance is
declining significantly too. Deutsche Telekom offers the service T-Online on the basis of the
former Datex-J-System which enables in particular access to the telebanking services of nu-
merous financial institutions. For journalists and computer scientists the CompuServe service
was especially important. It provides access to most of the national and international newspa-
pers and to the support areas of the big software producers. Almost all providers of online
services (in Germany these were T-Online, CompuServe and AOL) position themselves today
as Internet providers only. The content of their online services is rarely maintained. Yet, they
retain significance worth mentioning in limited areas like online-banking where security is
especially important.



,, 7HFKQLFDO 5HTXLUHPHQWV

Access to the Internet requires an appropriate technical set-up. Hardware and software must
be adjusted for network access; otherwise the system is likely to crash.



 +DUGZDUH

Access is only worth it if appropriate hardware is available – especially a computer with suf-
ficient storage capacity. Besides the computer, technical conditions are decisive for access to
networks. Users who cannot rely on internal fixed lines need telephone access via modem or
ISDN and a provider who makes access to the Internet possible for them. A modem should
have a transmission capacity of at least 33.600 bit/s, the current state of technology is already
at 56.000 bit/s. Additionally, there is the possibility of network access via ISDN-transmission
(meanwhile ASDL/TDLS-connection) which is superior to a modem with transmission rates



                                   Thomas Hoeren-Internet Law                                 16
of 64.000 bit/s. For this an ISDN-connection as well as an ISDN-card for the computer are
essential. The initial costs are about 250 Euro. The basic charges for an ISDN-connection are
higher in comparison to conventional analog telephone connections. The much better trans-
mission speed becomes especially apparent with complex WWW-sites and large transmis-
sions of data. The dial-up process can also be shortened. But it should not be ignored that the
higher basic charges are only compensated for by saved online-fees on the basis of higher
transmission bandwidths in exceptional cases.



 6RIWZDUH

As for operating systems the programs by Microsoft such as the Windows products are the
most common choices.
For the dial-up process you need the appropriate dial-up software first. With Windows this is
provided in the form of the remote data transmission-network as part of the operating system.
Some providers, for example T-Online, need their own software and provide it to their cus-
tomers in the form of a CD.
Once your connection to the Internet exists you will need special software to use the different
Internet services. Usually this will be a web browser. The market is controlled by two com-
peting products: Microsoft Internet Explorer and Netscape Communicator. Microsoft delivers
its browser together with the operating system. In a spectacular lawsuit a US federal court
judge decided in June 2000 after antitrust proceedings lasting more than two years, that the
Microsoft company had to be divided into two parts. The distribution of the applications
software had to be separated from the distribution of the operating system after this decision.
Both browsers can frequently be found on the CDs that are made available by the providers or
which are added to the relevant computer magazines in loose succession. You can download
updated versions from the Internet for free but this will result in very high online charges be-
cause of the large quantity of data.
Further, a mail-client is necessary for composing, sending and receiving e-mails. Netscape’s
web browser already contains a simple form of mail-client. Microsoft also makes a mail client
available as part of the operating system. More efficient mail programs such as Pegasus-Mail
can be downloaded as shareware from the Internet (http://www.pmail.com/). There are also
special German versions provided for Pegasus-Mail.



3
    More details about the FidoNet can be found under e.x. http://www.fidonet.org or http://www.was-ist-fido.de/
                                            Thomas Hoeren-Internet Law                                         17
Apart from Windows there is another very suitable operating system which is not as well
known as Windows, or rather has not been accepted worldwide yet: Linux. The first version
was programmed by the Finn Linus Torvalds, who is still working on further developments
today. The special feature of Linux and its additional programs is that students from universi-
ties all over the world are constantly developing them.
An advantage of Linux is that it can be used without any royalties. Providers (e.g. SUSE or
RedHat) are only allowed to charge fees for distribution i.e. compiling all parts of the pro-
gram into a complete system on one CD. Theoretically however it is possible to receive all
components of Linux and also later updates on the Internet for free.
Linux is designed to be used on an INTEL Pentium PC and is equivalent to the defaults of a
UNIX operating system in almost all points. It is therefore suitable for use in data networks as
well as the Internet.
Linux also has window systems and their application is very similar to those of Microsoft-
Windows. For surfing the Internet, Linux’s “Netscape Communicator” can be used too. There
is a multitude of tools and drivers which allow the operation of Linux with a lot of well-
known peripheral equipment (printer, scanner, modem).
Due to its stability Linux is a very good alternative to the Microsoft products but it requires
much more background information concerning installation and handling. Therefore, its suit-
ability for laymen is very limited at the moment.



 3URYLGHUV

In the meantime a large number of providers have appeared in Germany. First of all there are
supraregional providers who offer their services nationwide and who can be divided into two
groups. Some of them mainly offer access to the Internet for big customers, companies like
Eunet Germany (Dortmund), NTG/Xlink (Karlsruhe) and the DFN-association (Berlin). Other
providers like AOL and T-Online have mainly private individuals as their clients. Besides
them, there are regional providers who have not merged into nationwide associations. The
structure of tariff rates is extremely varied and splintered; so it is not possible to provide an
overview here. Depending on what kind and intensity of utilization you want, you should pay
attention to package deals and Internet-by-call offers.
The utilization of Internet-by-call – comparable to call-by-call within the field of normal tele-
phone services - can be very useful. You can choose a provider for one call (or one Internet
session) and the connection will be established through it. The telephone costs will be billed

                                   Thomas Hoeren-Internet Law                                 18
on your Telekom account, or a separate contract will be made with the provider. Comparable
to telephone call-by-call, a large number of providers now exist within this field who offer the
Internet-by-call service. You need to be aware that providers of Internet-by-call services have
varying general conditions for their services. The following points should be noted and if nec-
essary compared:
   • registration
   • contractual obligation
   • monthly basic charges and/or minimum turnover
   • fixed-intervals
   • costs
   • access software
   • further services (e-mail, webspace, …)


Due to the fast pace of development in this field you are better off choosing a flexible solution
with little obligations, that means no registration or contractual obligation, no basic charges or
minimum turnover and no special access software.
You can find an example of an overview of the different providers and their general condi-
tions on the website http://www.billiger-telefonieren.de under the category Internet-by-call.
Interesting for those looking for daily access to the Internet are providers who do not require a
registration or other specific features and who have a standard-login with a password. Even
within your local area it can be cheaper to use an Internet-by-call provider than to use local
providers in the form of a local call via Telekom. Access via Telekom is often offered by
computer centers of universities who do not impose charges. There can be advantages in us-
ing Internet-by-call providers in the form of lower costs per minute and in some cases ac-
counting periods of seconds.
Using Internet-by-call is relatively easy, as can be shown using MSN (Microsoft Net) as an
example:
Windows users need only to open an access profile on the remote data transmission-network.
There the telephone number 01088-0192658 should be entered. This access number can be
found on the provider’s webpage as well as on the overview page mentioned before. Other
adjustments do not need to be made. DNS-items as well as the IP-number will be conferred
dynamically with the access. Login (or user identification) and password are both “MSN”.
Despite this, a disadvantage of using of Internet-by-call should be stated: Usually the mail
servers of the providers need to be used for sending e-mails with the usual protocol SMTP. If

                                    Thomas Hoeren-Internet Law                                  19
you change the provider it will also be necessary to change the mail server and the mailing
address on your mailing program.



,,, &HQWUDO ,QWHUQHW 6HUYLFHV

There are different services on the Internet. Besides the already mentioned e-mail, a service
for sending electronic letters, there are also discussion groups (Usenet, Listserver), possibili-
ties for data transfer (FTP and Telnet) as well as the World Wide Web (WWW) which
spreads like an umbrella over the previously listed Internet information services. These six
services are the so-called pillars of the Internet.



 (PDLO

Electronic mail (in brief: e-mail) is the most-used service on the Internet. Via e-mail texts can
be transferred from one computer to another. Extensive manuscripts can be sent from conti-
nent to continent within seconds without incurring special postage charges. On the receiving
computer texts can be digitally processed immediately. Everyone who has a laptop, modem
and a mobile phone is able to sit on a Norwegian beach writing essays and sending them im-
mediately to the editorial department in Frankfurt where they will be revised right away. The
often annoying medium “paper” and the former necessity of postal delivery of floppy disks
have now been dropped.
To use e-mail you need an appropriate address which consists of two components: the user
identification (usually an abbreviation of your surname) and the name of the Internet com-
puter used, with a nationality identification.4 Both parts are connected with each other by a so
called spider monkey (“@”; pronounced “at”). The e-mail address of the author for example
is called “hoeren@uni-muenster.de”.




4
  Important identifications: „de“ (Germany), “uk“ (Great Britain), “edu“ (American universities), “gov“ (gov-
ernment departments), “com“ (commercial companies) and “org” (institutions, organizations). At the moment
there are thoughts of establishing additional identifications on an international basis to have more addresses at
users’ disposal and to make it easier to find users; for example the identification “art” for artists.
                                            Thomas Hoeren-Internet Law                                        20
 'LVFXVVLRQ *URXSV

Beyond e-mail, discussion groups have been established which consist of two systems. First,
so called mailing lists exist, where you have to register as user and then you can find public
platforms under the designation Newsgroups (former “Usenet”).


a) Mailing Lists

In the case of mailing lists contributions are sent to central addresses and are then automati-
cally transferred to all the people concerned. You can participate in a platform by registering
on the administrating computer by e-mail. The registration will be made under a personal ad-
dress. The following are important platforms and some tips:


   • Anwalt@mantis.de (platform for German lawyers)
     registration address: listserv@mantis.de
     registration text: sub anwalt first and last name


   • ComLaw-L@lawlib.wuacc.edu (communications law)
     registration address: listserv@lawlib.wuacc.edu
     registration text: sub comlaw-l first and last name


   • Computer-Law@socs.uts.edu.au (Copyright and Computer Law for practitioners)
     registration address: majordomo@socs.uts.edu.au
     registration text: subscribe computer-law


   • Cni-copyright@cni.org (copyright law)
     registration address: listserv@cni.org
     registration text: subscribe cni-copyright first and last name


   • contracts@austin.onu.edu (law of contract)
     registration address: listserv@austin.onu.edu
     registration text: subscribe contracts first and last name


   • Cti-law@mailbase.ac.uk (use of electronic data processing within British jurisprudence)
     registration address: mailbase@mailbase.ac.uk

                                   Thomas Hoeren-Internet Law                               21
  registration text: subscribe cti-law first and last name


• DATA-PROTECTION@mailbase.ac.uk (data protection law in the UK)
  registration address: mailbase@mailbase.ac.uk
  registration text: join data-protection first and last name


• DIGSIG@vm.temple.edu (digital signatures)
  registration address : listserv@vm.temple.edu
  registration text: subscribe digsig first and last name


• EFF-Talk@eorg (cyberspace issues of law)
  registration address: listserv@eorg
  registration text: subscribe comp-org-eff-talk


• Euro-lex@listserv.dfn.de (Europeanlaw sources)
  registration address: listserv@vm.dfn.de, listserv@dearn.bitnet
  registration text: subscribe euro-lex first and last name


• Recht-im-Internet@rz.uni-osnabrueck.de
  registration address: majordomo@rz.uni-osnabrueck.de
  registration text: subscribe recht-im-internet


• Securitieslaw-l@aall.wuacc.edu (securities law)
  registration address: listserv@aall.wuacc.edu
  registration text: subscribe securitieslaw-l first and last name


• tech-law@techlaw.com (electronic data processing law)
  registration address: listserver@techlaw.com
  registration text: subscribe tech-law


• Netlaw-l@listserv.dfn.de (legal questions of the Internet)
  registration address: netlaw-l-subscribe-request@listserv.dfn.de
  registration text: not required


                                Thomas Hoeren-Internet Law           22
   • tkrnews-l@listserv.gmd.de (current developments in media and telecommunications
     law)
     registration address: listserv@listserv.dfn.de
     registration text: subscribe tkrnews-l first and last name


   • Tltp-law@mailbase.ac.uk (electronic data processing applications within British legal
     education)
     registration address: mailbase@mailbase.ac.uk
     registration text: join tltp-law first and last name


b) Newsgroups

In addition to the mail distributors, the discussion groups of Usenet also offer the possibility
to exchange ideas on legal issues. Unlike mail distributors a registration is not required; in
principle all contributions from the discussion group will be presented by the provider. New
articles will automatically be loaded to your own computer by the appropriate software and
can be answered there. Examples of some the German language legal platforms available are:


   • at.fido.recht
   • at.gesellschaft.recht
   • at.mail.edv-recht
   • de.soc.recht
   • de.soc.recht.datennetze
   • fido.ger.recht
   • maus.recht
   • z-netz.rechtswesen.allgemein
   • z-netz.rechtswesen.anmerkungen
   • z-netz.rechtswesen.diskurs with different sub-groups
   • z-netz.rechtswesen.urteile with different sub-groups



 )73 DQG 7HOQHW

Another Internet service, the so called File Transfer Protocol (FTP), makes it possible to
transfer data from one computer to another. By using FTP users are able to access the data

                                    Thomas Hoeren-Internet Law                               23
base of another computer by using their own Internet computer. “Anonymous” computers
permit access for everybody without requiring a special password or a special identification.5
To access these computers you have to get in with the name “anonymous” or the identifica-
tion “ftp”. Usually (but not necessarily) you have to give your personal e-mail address as the
password. After the connection with the FTP server6 has been established you will be able to
transfer data to your computer by using instructions like dir, cd or ls. FTP is important mainly
for the delivery of shareware and software upgrades or software drivers. Producers like Com-
paq or IBM are increasingly transferring software of current interest to clients by FTP.
Because of the increasing importance of the WWW most FTP-providers now offer access via
a WWW-page; either as a direct download or a browser changeover to FTP. In the last case,
the annoying search for software on servers becomes unnecessary (e.g. Netscape, Microsoft,
IBM, and others).
If using Telnet, another Internet service, a direct transmission of data is not possible unlike
using FTP. Instead a Telnet-user will be able to use another computer like a “domestic” user
at a terminal. For example you will be able to run software which is not executable on your
personal computer. At the moment several Telnet applications can be found which are of in-
terest for lawyers. For example Latin American laws can be viewed in an English short ver-
sion over the Library of Congress Information System (telnet locis.loc.gov). But even this too
is made available via a WWW interface.



 *RSKHU

Originally a gopher was described as a digging, burrowing mammal of the common rat family
(Geomyidae).7 Besides this, it is also the name of a special basic Internet system program.
This program allows you to “go for” data by “burrowing” from one Gopher computer to an-
other using cross-references and complicated menus; a special net called the Gopherspace has
been developed in this way.
The texts of US American laws are available from the University of Cornell computer
(gopher://gopher.law.cornell.edu). The Instituto per la Documentazione Guiridica (Florence)
offers    access     to   electronic     bibliographies      of    all   fields    of    European      law
(gopher://gopher.idg.fi.cnr.it).

5
 See Hohndel, Software frei Haus. Anonymus FTP – Die Welt der freien Software, in: c`t 1993, vol. 2, 86
6
 If you are looking for special files on FTP-computers you can use the search programme Archie. For this you
will need to get into the Archie server of the Technische Hochschule Darmstadt via Telnet (telnet archie.th-
darmstadt.de) and enter the keyword “archie”. Alternatively there are also PC-clients like WS-Archie.

                                       Thomas Hoeren-Internet Law                                        24
It is important to note that the Gopher service is decreasing and will be replaced by WWW
services. If you work with Gopher servers you should always check whether they are up-to-
date or if the supply has been outsourced to WWW servers.



 :::

The World Wide Web (WWW)8 is a sub-service within the framework of the Internet. It was
developed in March 1989 by the physician Tim Berners-Lee from the Nuclear Research Cen-
tre CERN in Geneva. Within this development Berners-Lee combined four techniques and
facts, creating a program which makes utilization easier. He called the whole thing the World
Wide Web.
He connected the following things with each other:


    • The Internet which had been developed by the armed forces was spotted and usurped by
       science in the late eighties.
    • The “Hypertext-System” which had already been developed in the fifties was added.
       Due to its complementary cross-references with footnotes and its recommendations for
       further reading it is comparable to printed texts.
    • Computers increased in efficiency and had more storage space which made them more
       and more attractive for the production and storage of information.
    • In the end computers became smaller and smaller and reasonably priced. Therefore,
       Berners-Lee correctly assumed that everybody who wanted to look for information in
       the WWW had access to a computer terminal in some way.9
    • The aim of his project was to connect texts with each other electronically (so-called
       “Hypertext”)10 and to make them available to his colleagues online.
    • In time the WWW has changed: Increasingly it is being used for connecting images,
       text and music; indeed it is the online equivalent to multimedia presentation via CD-
       Rom and CD-I. Furthermore, the WWW integrated the previously described Internet
       services e-mail, NetNews, FTP, Telnet and Gopher into an entirety that you could ac-
       cess under a standardized surface.



7
  Vormanek, Das Internet und Gopher, jur-pc 9/1993, 2286.
8
  See for an introduction: Grau, Alles integriert. Informationssurfen im World Wide Web, c‘t 1994, vol. 6, 76.
9
  Korbmann/Berners-Lee – Im Schatten von WWW, Bild der Wissenschaft 3/1999, page 53.
10
   See Krüger, Hypertext für Juristen, jur-pc 1992, 1497.
                                           Thomas Hoeren-Internet Law                                          25
Because of these possibilities the WWW is now experiencing an enormous boom. In Novem-
ber 1992 there were 26 computers worldwide which presented information on the Internet,
eleven months later there were 200. Today the number is around more than one million and
more than 100 million users are able to recall information from the WWW.
The central position of CERN has been replaced by the MIT in Boston where the central page
http://www.w3.org is hosted.
For lawyers access takes place over legal information nodes. They summarize the most im-
portant WWW-services in the legal sector and thus make a goal-oriented journey across the
network possible. A list of all legal servers can be downloaded under “The Legal List” from
WWW (http://www.lcp.com). Similar worldwide information nodes are the “Seamless Web-
site – law” and the extensive overview of the University of Indiana.11



,9 1DWLRQDO &RQQHFWLRQV

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In the German-speaking area the Internet legal project at the University of Saarbrücken under
the charge of Professor Dr. Maximilian Herberger is well-known; their central WWW address
is: www.jura.uni-sb.de. Besides further information in Roman law and in American and
French legal history you can also find the Juris press reports concerning decisions of the Fed-
eral Supreme Courts there.
Furthermore the University of Münster makes constantly growing Internet legal services
available (http://www.uni-muenster.de/Jura/).
The            setting         up            of        the        Netlaw-Library   http://www.uni-
muenster.de/Jura.itm/netlaw/welcome.html by the Civil Law Department of the Institute for
Information Telecommunications and Media Law of the University of Muenster (ITM) makes
it possible to have a look at current judgments concerning the law of the new media, like for
example questions on data protection, trademark and copyright law. It is regularly updated
and contains international judicial decisions, articles and professional publications. Further-
more, there you can find a lot of further links and additional deepening references.


11
     http://www.law.indiana.edu/index.html
                                             Thomas Hoeren-Internet Law                         26
Besides the Netlaw-Library, the Public Law Department of the ITM headed by Prof. Dr. Hol-
znagel offers entry to the TKR-network (http://www.uni-muenster.de/Jura/tkr/netzwerk/). It
deals with a monthly newsletter about innovations in the field of telecommunications and me-
dia law as well as global overviews about public authorities and other authorities which take
part in the network (http://www.uni-muenster.de/Jura/tkr/netzwerk/global.html).
The page http://www.uni-muenster.de/Jura/tkr/netzwerk/global.html offers -similar to the
Netlaw Library- a lot of links which can be very useful for doing research within this field of
law.
Under the address http://www.uni-muenster.de/Jura/itm/internet/ you can find further links
e.g. a list of all Faculties of Law represented on the Internet as well as links to foreign WWW-
servers (http://www.jura.uni-sb.de/internet/).


The portal concept described is central to the creation of new WWW-servers. For this reason
more and more commercial providers offer legal information and extensive links on the Inter-
net. For example the ZAP-publishing house offers a free-of-charge database of all headnotes
since 1989 on the Internet for research (http://www.zap-verlag.de) as well as an extensive
thematically arranged collection of further links.
Other providers make full texts of Federal Supreme Court and Higher Regional Court deci-
sions available to users willing to pay the costs (e.g. http://www.marktplatz-recht.de or in fu-
ture also http://www.legalis.de). There is also a trend towards establishing Push-services.
With these users subscribe to certain subject areas and get current information automatically
via e-mail. An example of this is the service JurM@il from the ZAP-publishing house
(http://www.zap-verlag.de) with full-text decisions of Federal Supreme Courts. Finally, spe-
cial   legal   search   engines   are   new      features.   The   best   known   is   “Fahnder”
(http://www.fahnder.de), which has lately become user-pays.



 (XURSHDQ )RUHLJQ &RXQWULHV

As well as German WWW-servers there are judicial applications in European foreign coun-
tries, too.


a) Central WWW-Addresses

An almost legendary address is the faculty of law server at the University of Tromsö (Nor-
way). There, an International Trade Law Project (ITLP) was suggested very early. Its scope

                                   Thomas Hoeren-Internet Law                                 27
includes making electronic access to central information of public international law and inter-
national trade law possible. Under the WWW-address http://www.lexmercatoria.org you can
get the complete text of central international trade agreements. Besides this information and
materials about every field of law, from IPR to copyright law to banking and insurance law,
are available.


b) Miscellaneous

Besides the services accessible via Tromsö many other European WWW-addresses which are
of interest to lawyers can be found, including (but not necessarily limited to) the following:


   • University of Bristol: http://www.bris.ac.uk/
   • University of Hull: http://www.hull.ac.uk/
   • University of Rotterdam: http://www.eur.nl/frg/index.html
   • University of Salzburg: http://www.edvz.sbg.ac.at/jus/home.htm
   • University of Stockholm: http://www.juridicum.su.se
   • University of Tromsö (Norway): http://itl.irv.uit.no
   • University of Oslo: http://www.uio.no
   • University of Warwick: http://www.warwick.ac.uk
   • University of Vienna: http://www.juridicum.at


c) Government Offices

Along with universities government offices are also busy setting up WWW-information ser-
vices. The European Commission has the online address http://www.europa.eu.int/. The Brit-
ish government has been provided with its own server (http://www.open.gov.uk). The situa-
tion for Treasury is similar (http://www.hm-treasury.gov.uk).
The German Federal Government is available at http://bundesregierung.de/ where you can
also find information about ministries, offices and the Federal Republic of Germany in gen-
eral. The page of the Ministry of Justice informs about new draft bills and the way they are
developing       as   well   as   points   of   emphasis   and      other   areas   of   responsibility
(http://www.bmj.bund.de).




                                       Thomas Hoeren-Internet Law                                   28
 2WKHU )RUHLJQ &RXQWULHV

Much more confusing than the European WWW-landscape is the situation on other conti-
nents, especially in the USA. For several years the United States have had a pioneering role
concerning the application of the Internet for lawyers. Accordingly, almost all law schools
make information available via the WWW. Additionally, in the United States the WWW has
been spotted by lawyers as a medium for commercial advertising. An enormous stream of
information results from this which is nearly overwhelming. Now, only the central WWW-
lists for lawyers, the so-called “Law Lists” give support:


       • Einet Galaxy Law and Regulation List (http://andromeda.einet.net/galaxy/Law.html
       • “Law Links” (http://www.counsel.com)
       • “The       Law        List”      of     the     Law     School        of   Indiana     University
         (http://www.law.indiana.edu/law/lawindex.html)
       • “Law Related Sites on Internet” of the University of Waikato/New Zealand
         (http://www2.waikato.ac.nz/law/law-related.html)
       • “The Legal Automation and Internet Review” of the Tarlton Law Library/University of
         Texas (http://www.law.utexas.edu)
       • “The       Legal       Information        Institute”   of       the    Cornell   Law      School
         (http://www.law.cornell.edu/lii.table.html)
       • “The Legal List” (http://www.lcp.com)
       • “Legal Resource Locator” (http://www.dorsai.org/p-law)
       • “Meta-Index for Legal Research” (http://gsulaw.gsu.edu/metaindex/)


The lists named contain references to hundreds of further information services which can be
chosen by a simple mouse-click. These information services make available things such as the
latest decisions of the US Supreme Court in full text or the Law Library Catalogue of the Co-
lumbia Law School.12 Even the full-text draft bills of the Senate and the House of Representa-
tives are available (http://thomas.loc.gov). As well as this, you can find information about
consumer law, company law13 or about legal questions concerning the Internet.14
In Canada you can retrieve decisions of the Supreme Court and government documents from

12
     Both available through the University of Cornell.
13
     http://www.law.uc.edu/CCL/.



                                            Thomas Hoeren-Internet Law                                  29
     • the Communications Research Centre (http://info.ic.gc.ca) or
     • the        University           of         Montreal           /Prof.         Daniel          Poulin
       (http://www.droit.umontreal.ca/english.html)




14
  You can find material like this at Fenwick & Wesz Electronic Papers (http://www.batnet.com/oikoumene/), in
contributions of the Electronic Frontier Foundation (http://www.eorg) and from the Information Law Web
(http://seamless.com/rcl/infolaw.html).
                                         Thomas Hoeren-Internet Law                                      30
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                                 Thomas Hoeren-Internet Law                              31
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„Internet“ – that was the magic word in recent years. Everybody who was concerned about
their image had an e-mail address or even a homepage on the WWW. Companies, associa-
tions, public offices – everyone had spotted the anarchical network of networks as an impor-
tant marketing instrument and tried to establish themselves as an information provider. In the
middle of 1996 about 100.000 companies worldwide and 100 companies in Germany were




                                  Thomas Hoeren-Internet Law                               32
presenting their services on the Internet.15 Since then about 4.25 million domain names have
been registered by the DENIC eG, the German registration department.16
But everyone who wants to be accessible on the Internet needs an unambiguous address. Oth-
erwise neither the electronic post will get through nor will the user be able to retrieve the in-
formation supplied. Internet addresses are very limited. They can be given away only once;
for this reason it is obvious that there is a run on these registrations. Already the first digital
address dealers have appeared, looking for valuable registrations which they will reserve for
themselves to sell later for a lot of money. Discussions on trademark law are bound to happen
and judicial decisions concerning this field of problems are increasing at home and abroad.



, 3UDFWLFH RI $GGUHVV 5HJLVWUDWLRQ

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Enforcing the provisions of trademark law requires noting the actual characteristics of address
registration on the Internet.17 Only an officially registered address can be routed duly, that
means take part in the Internet.



 ,QWHUQDWLRQDO 6WUXFWXUHV

The IP-addresses required for communications between several computers are not allocated
by the “National Science Foundation”, the financial backbone of the Internet. Instead IANA
(“Internet Assigned Numbers Authority”) was responsible on behalf of the Internet Society
and the US Federal Network Council. IANA itself delegated the administration of the an-
nouncements and registrations of IP-addresses to the InterNIC (“Internet Network Informa-
tion Center’s Registration Service”) which operates through a private company called Net-
work Solutions Inc. (NSI). InterNIC in the USA is equivalent to RIPE-NCC in Europe and
APNIC in Asia.18



15
   See Bohr, Deutsche EDV-Unternehmen im Internet – eine empirische Studie, CR 1996, 633.
16
   As of 28 March 2001.
17
   See also Semeria, Understanding IP Adressing: Everything You Ever Wanted to Know

                                       Thomas Hoeren-Internet Law                               33
Meanwhile ICANN (“Internet Corporation for Assigned Names and Numbers”) has suc-
ceeded this institution.19 ICANN was founded in autumn 1998 in the USA as a non-profit-
public benefit organization according to §§5110-6910 of the California Corporation Code20. It
is based in California. ICANN has taken on the responsibilities of NSI, whose contract with
the US-government expired on 30 September 2000. The ICANN is led by the Board of Direc-
tors that consists of 19 persons. Three of them are appointed by three supporting organiza-
tions.21 Nine are elected by the “internet society” (who ever that may be); till this date only
five of them have been appointed. These 18 directors elect the 19th director, the president. The
ICANN has extensive powers within the domain name system, amongst others:
     • The control and administration of the Root-Server-System (except the prime A-Root-
       Server, that lies under the control of the US-government; its administration will be
       transferred to the ICANN in September 2001 at the earliest)
     • The registration and administration of IP-addresses with the help of the Numbering Au-
       thorities ARIN (for America), RIPE (for Europe and Africa) and APNIC (for the re-
       gions Asia and Pacific)
     • The registration and administration of Top-Level-Domains, both the country-code Top-
       Level-Domains (ccTLD) and the generic Top-Level-Domains (gTLDs); ICANN accred-
       its so-called registrars where the particular domain names can be registered.


At present there are the following gTLDs:
     • com (“Commercial”)
     • net (for services with relating to the internet)
     • org (for non-commercial organizations)
     • arpa (ARPANet)
     • edu (educational institutions)
     • int (international organizations)
     • mil (US-Military)
     • gov (US-government) 22


18
   See Dan L. Burk, Trademarks on the InfoBahn, Richmond Journal of Law & Technology 1996, page 2.
19
   See Kleinwächter, MMR 1999, pp. 452.
20
     See also the Articles of Incorporation of the ICANN from 28. January 1998, available at
http://www.icann.org/articles-pr23nov98.html - further on the Bylaws from November 1998.
21
   These are the DNSO (Domain Name Supporting Organisation), the ASO (Address Supporting Organization)
and the PSO (Protocol Supporting Organisation).
22
   In order to find the competent registrars for these domains see http://www.icann.org/registrars/accredited-
list.html
                                         Thomas Hoeren-Internet Law                                         34
At the end of 2000 additional gTLDs were accepted, but there is no agreement on the register-
ing offices yet.23 These are
       • info (Information services)
       • biz (companies)
       • aero (air traffic)
       • coop (cooperative societies)
       • museum
       • pro (professional persons: doctors, lawyers, accountants)
       • name (individuals with their names)


There is a procedure of awarding contracts for the “biz” and “info” domain stated by the
ICANN in May 2001. neulevel.com is responsible for the awarding of “biz”. In principle reg-
istrations have been possible since 1. October 2001. But right now there are legal proceedings
underway against the previous principle governing registration of domains, which were re-
quested by several persons (so-called “affected names”). For the registration of affected
names the new Round-Robin-distribution process24 was set up whereby the requested do-
mains are compared with existing applications of trademark owners in the IP Claim Database
and after notification of the interested parties the domain is assigned in several selection
rounds. If the domain collides with an IP-application, the registration process is stopped for
30 days, i.e. the domain can not be used during this period and can not be transferred. If there
is no collision the registration is carried out and the domain is made available to the applicant.


There is a similar procedure for the “info”-domains. They are assigned by afilias.com. The
distribution process started with the so-called “sunrise-period”, where owners of trademarks
that were registered before 2. October 2000 had the chance to register the identical domain
with priority. On 22. September 2001 the sunrise-domains were activated and the rest were
distributed randomly. Since 1. October 2001 it has been possible to register domains in “real-
time”. Until 26. December 2001 it was possible by way of the Sunrise Challenge Process to
check if the domains registered by trademark owners accorded with the sunrise-conditions. As
of 6. December 2001 requirements have been extended:



23
     compare Emert, Ein Königreich für einen (Internet) Namen, in c’t 25/2000, 66.
24
     http://www.nic.biz/faqs/distr_methods.html
                                           Thomas Hoeren-Internet Law                           35
       • A trademark owner who has won a Sunrise-Challenge-Process must prove a valid regis-
         tration
       • Furthermore the national registrars can correct and delete data in the WHOIS-data base.


“name” is distributed by Global Name Registry Ltd. (GNR) and this company also holds the
right to administer the Second Level Domain (e.g. hoeren.name) and the e-mail-addresses.
The national registrars will only be able to offer Third Level Domains. The first name-
domains will work from 15. January 2001, the sunrise period ended 17. December 2001. The
implementation contains two phases: the start-up phase (randomly) and the Shared Registra-
tion System Phase (“First-Come, First-Served”), that concerns only existing and working do-
mains.


Museum is already functioning and is made available by the Museum Domain Management
Association (MuseDoma). Aero is made available by the Société Internationale de
Télécommunications Aéronautiques SC (SITA). At present there are negotiations between the
SITA and ICANN, so that the implementation of the domains is planned for the first quarter
of 2002. RigistryPro, Ltd. is responsible for pro-Domains, though they are still negotiating
with ICANN. The responsible company for coop-domains is the National Cooperative Busi-
ness Association (NCBA); the domain is not yet working.


There are 239 different country-code Top-Level-Domains.25 The most important are:
       • de (Germany)
       • uk (Great Britain)
       • nl (Netherlands)
       • fr (France)
       • jp (Japan)
       • es (Spain)
       • no (Norway)
       • ch (Switzerland)
       • at (Austria)




25
     See a list at http://www.din.de/gremien/nas/nabd/iso3166ma/codlstp/en_listp1.html.
                                             Thomas Hoeren-Internet Law                       36
The domain “us” (for USA) exists, but is not common. Domains that have a further meaning
beside their country code have a special attraction; like for example “tv” (for Tuvalu, in de-
mand by TV-stations) and “ag” (for Antigua, at the same time an abbreviation for “Aktienge-
sellschaft” - German for “Stock Corporation”).


In September 2000 ICANN decided to accept “eu” al a ccTLD. At the same time the Euro-
pean Commission presented a proposal for a regulation on the implementation of the Internet
Top Level Domain ".EU".26 The “Regulation no 733/2002 of the European Parliament and of
the Council of 22 April 2002 on the implementation of the .eu Top Level Domain” set up the
final legal basis for the European Top Level Domain .eu (dotEU). The regulation is directly
applicable in the Member States. The regulation regulates the conditions for the implementa-
tion of .eu, especially for the registry and the framework according to which the registry will
work. The details of registration have not yet been not yet stated in the regulation. But it is
certain that individuals, companies and organizations of the EU can obtain an eu-Address.27



 'H1,& H*

Since 1 January 1994 the IV-DENIC (“Interessenverband Deutsches Network Information
Center”) has been keeping watch over the institution of a German domain below the top-
level-domain “.de” and its connection to the Internet.28 Most IP-Providers in Germany and the
“Deutsche Interessengemeinschaft Internet” (DIGI) are members of this association.29 DENIC
eG has been in existence since 17 December 1996.30 In March 2000 there were 89 members
(13 per office). One of them was the Deutsche Telekom AG which had only had guest status
before then. Responsibilities of DENIC are the management of the Primary-Nameservers for
the top-level domain “.de”, the nationwide central allocation of domains below the top-level




26
   COM (2000) 827, 12. December 2000
27
   see also http://www.doteu.info/presse/artansicht.php3?Inkid=00000030.
28
   In Austria the responsible office is the NIC.AT GmbH, in Switzerland SWITCH (Swiss Academic and Re-
search Network). Addresses: nic.at, Jakob-HaringerStr. 8, A-5020 Salzburg, Tel.: +43/662/466913, Fax:
+43/622/466947, email: info@nic.at, http://www.nic.at; for SWITCH, Neumühlequai 6, CH-8001 Zürich, Tel.:
+41/848/844080, Fax: +41/848/844081, email:helpdesk@nic.ch
29
   Since 1 November 1995 a fee has to be paid for assignment of a number which is 1.200,- ¼ IRU WKH ILUVW UHJLs-
tration and 500,- ¼  \HDU IRU IXUWKHU XWLOL]DWLRQ
30
   The DeNIC is allowed to say that it operates without a view to profit and that is a non-profit-organization, see
LG Frankfurt, judgment of 24 October 2001, MMR 2002, 126.
                                             Thomas Hoeren-Internet Law                                          37
domain “.de” and the administration of the Internet in cooperation with international commit-
tees.31


DENIC eG has laid down precisely which structure domain names must have. A valid domain
name consists of at least three32 and no more than 63 letters, digits and hyphens. It starts and
ends with a letter or a digit, but it must contain at least one letter.33 There is no distinction in
capitalization. Names of already existing top-level domains (arpa, com, int, gov, mil, nato,
net, org, edu), 1- and 2-letter abbreviations as well as German car registration numbers, um-
lauts and special characters34 are not permissible. A further division (subdomain) is possible
but would be established by the provider or the user not by DENIC eG.


Domains that are still available can be found with the help of search engines like
http://www.denic.de
http://www.domaincrawler.de
http://www.speenames.com
The registration of available domains is seldom done via DeNIC itself. In general it is done
via retailers, e.g. discount providers like Strato or Puretec.


According to the registration terms and conditions of DENIC35 customers are responsible for
consequences arising from trademark law and the right to use of a name resulting from the
registration of the domain name by the client36. Clients assure the DENIC that they have
checked for compliance with the trademark law provisions and that there has not been any
indication of an infringement of third party rights (§ 3 [1]). Accordingly, double address reg-
istration cannot be prevented by DENIC. Everyone who has found a free name may register
the name as a second-level domain to DENIC.37 However, they take the risk that somebody


31
    The DeNIC can be contacted at Wiesenhüttenplatz 26, 60329 Frankfurt, Tel.: +49/1802/336420, Fax:
+49/69/27235235, email: info@denic.de, http://www.denic.de
32
   There are 4 exceptions for 2-digit domains because of stock protection reasons: http://www.db.de, ix.de,
hw.de, bb.de.
33
   see LG Frankfurt, judgment of 22. March 2000, MMR 2000, 627 with notes by Welzel, that states that there is
no claim to register a domain against the DeNIC according to §§19 I, 20 II GWB, if according to the registration
terms and consitions there are objective reasons – especially technical reasons – against the registration (in this
case the domains 01051.de).
34
   But it is conceivable to register multilingual domain-names (MDNs) that can display special characters and
umlauts by the so-called RACE-method; see Huber/Dingeldey, Ratgeber Domain-Namn, Starnberg 2001, 43
35
      The     conditions    are    from     15    August    2000     (available    on    the    Internet     under
http://www.denic.de/doc/DENIC/agb.htm).
36
   Paragraph „domain names“, I. (5).
37
   Besides this you can also apply for an IP-net at the NIC where 254 numbers are available for further registra-
tions (ClassC-net).
                                           Thomas Hoeren-Internet Law                                           38
will take action to compel them to refrain from using this trademark. To prevent a fast transfer
of a domain from one domain-grabber to another DENIC provides a so-called Dispute-
Registration - if a third party is able to establish that it holds the right to the domain and that it
is asserting its right in relation to the domain owner (§ 2 [3] sentence 1 of the registration
conditions). This registration will be valid for one year, and then it will be renewed on re-
quest. If a Dispute-Registration already exists it is not possible to obtain a second Dispute-
Registration. A domain name which is subject to a Dispute-Registration can be used by the
owner but not transferred. Furthermore the Dispute-Registration ensures that the beneficiary
of the Registration is automatically the new domain owner, if the previous owner releases the
domain. Until August 2000 DENIC also recognized a so-called WAIT-registration which
meant that a client could have its name put down on a list in case a domain was released. This
list no longer exists.


The initiative “beatnic” has recently offered twenty new German-language endings for web-
addresses among them “.buch”, “.auto”, “.oeko”, “.musik”, “.edv” or “.intern”. This initiative
is based on preparatory work of the “Open Root Server Confederation” (www.open-rsc.org,
ORSC), which has been developing more flexible alternatives for the existing system of do-
main names compared to the ICANN.38 Actually these are normal domains at third and fourth
level owned by the company, where a technical trick makes it possible to give the impression
that they are first and second level domains.



,, $VSHFWV RI 7UDGHPDUN /DZ

 3UHOLPLQDU\ 4XHVWLRQV RI &RQIOLFW RI /DZV

Trademark law is situated at the interface of competition law and intellectual property rights.
Where conflict of laws is concerned the principle of territoriality is applied even though it is
not compatible with the trademark law concept of final market interference. The possibility of
a technical request decides which law is applied; for trademark law any law of any State of
request will be effective.39 Advertisement by the producer for a trademark infringing product




38
     From the „taz“ No. 6397, 03-15-2001, page 17.
39
     KG, CR 1997, 685 – Concert Concept.
                                           Thomas Hoeren-Internet Law                              39
on the internet makes the producer an accomplice, even though the advertisement was carried
out under a .com-domain that was registered abroad.40


Legal marks which are not protected by trademark law, like for example §§ 12, 823 BGB, are
treated differently. In this field the principle of the request as directed will be effective.41 Ac-
cording to this not the law of the state of request but the law of the state where intended users
are citizens will be effective.


The local jurisdiction of a court results from § 32 ZPO (Code of Civil Procedure), as long as
the general place of jurisdiction defined by §12 ZPO (domicile of the defendant) is out of the
question. Concerning the jurisdiction for tort law stated by §32 ZPO it is decisive where the
domain can be accessed via the internet.42 For international jurisdiction the jurisdiction regu-
lations of the ZPO are applied analogously, unless bi- or multilateral treaties (especially
Regulation 44/2001) are applied.43 The new regulation no 44/2001 on jurisdiction was also
created on the assumption of a general jurisdiction regarding the residence of the defendant
(art. 2) and the tort law jurisdiction regarding the place where the harmful event occurs. The
latter possibility in particular leads to an almost free choice of place of jurisdiction, as is the
case in as press law.


The OLD Karlsruhe argues differently and states that it is decisive where the intended request
of the domain name can take place.44 Then it has to be clarified whether the dissemination
was not randomly, but intentionally in Germany. But the “Intent” of a Homepage can in most
cases only be ascertained with great difficulty. Some criteria for this are
The language of a Website45 (Problem: English language),
The German citizenship of the plaintiff and defendant,46
The usage of German currency,47
Advertisement for the Website in Germany.48



40
   Austrian Supreme Court, judgment of 24. April 2001, GRUR Int. 2002, 265
41
   E.g. OLG Karlsruhe, 9 June 1999 – 6 U 62/99, K & R 1999, 423 – Bad-Wilbad.com.
42
   LG München I, judgment of 8. December 1999, MMR 2000, 443.
43
   See also the considerations at the end of this script
44
   OLG Karlsruhe, judgment of 9 June 1999, MMR 1999, 604 = CR 1999, 783 = AfP 1999, 378; similar KG
NJW 1997, 3321 – concert concept.
45
   LG Hamburg, MD 2001, 354 – nimm2.com
46
   LG Braunschweig, CR 1998, 364 – delta.com
47
   LG Hamburg, MD 2001, 354 – nimm2.com.

                                    Thomas Hoeren-Internet Law                                   40
Quite important are disclaimer on the website that state that the homepage addresses only
customers from certain countries. But the validity of such a disclaimer is very doubtful – es-
pecially regarding domain names.



 3URWHFWLRQ RI %XVLQHVV ,QGLFDWLRQV DFFRUGLQJ WR 7UDGHPDUN /DZ

According to § 5 [1] MarkenG trademarks of companies are protected as business designa-
tions. Trademarks of companies according to the legal definition of § 5 [2] MarkenG are
marks which are protected in business dealings as names, firm names or special marks of
business enterprises or companies.49


a) Domains – Technical Indications or Company Trademarks?

Even on the Internet company trademarks are under the protection of trademark law. But this
is not uncontroversial for domains. Though it is partially accepted that domain names fulfil a
function of individualization and identification some authors find it difficult to accept them as
trademarks of companies within the meaning of trademark law. The background for this is the
technical function of domain names. Internet addresses are actually multi-digit numbers that
you can hardly remember. Therefore these numbers are overwritten by combinations of let-
ters. Upon entering this combination of letters it will be converted into an IP-address (combi-
nation of numbers) and will serve for the identification of a certain computer. For this reason
a direct application of principles of trademark law and the right to the use of a name is par-
tially rejected. The reason for that is that domain names first of all should have the function of
assigning a certain computer and not a certain person.50
But this interpretation fails to appreciate that domains which contain a name or something
similar to a name are today used as marks.51 Therefore the OLG Munich decided that Internet
domain names can be trademarks of companies if the used mark has an original function of


48
   LG Hamburg, CR 2000, 617 – last-minute.com
49
   For the legal position in Austria see the fundamental judgment of the Austrian OGH, judgment of 13. Septem-
ber 1999, MMR 2000, 352 with notes by Haller.
50
   Kur, CR 1996, 325, 327; similar Gabel, Internet: Die Domain-Namen, NJW-CoR 1996, 322; Graefe, Marken
und Internet, MA 3/96.
51
   Also KG, CR 1997, 685 – Concert Concept; OLG Karlsruhe, WRP 1998, 900; OLG Düsseldorf, WRP 1999,
343, 346; OLG Hamm, CR 1998, 241, 242; OLG Stuttgart, CR 1998, 621; OLG Köln, NJW-CoR 1999, 171; LG
Hamburg, CR 1997, 157. Here it is not relevant if the MarkenG generally requires a utilization of legal marks;
see recommending Sack, Sonderschutz bekannter Marken, GRUR 1995, 81, 93; Keller, Die zeichenmäßige Be-
nutzung im Markenrecht, GRUR 1996, 607. Critical of that Fezer, Rechtsverletzende Benutzung einer Marke als
Handeln im geschäftlichen Verkehr, GRUR 1996, 566; Starck, Markenmäßiger Gebrauch – Besondere Voraus-
setzung für die Annahmen einer Merkenverletzung, GRUR 1996, 688.
                                            Thomas Hoeren-Internet Law                                      41
identification or general acceptance in trade. This is the case where the domain name stands
for the service-rendering enterprise and this meaning is used in business dealings.52
Since domains were established for user-friendly reasons the market quickly recognized the
enormous potential for global marketing. Domains nowadays are marketing instruments
which are deliberately chosen and inserted for the identification of a company or a product on
the WWW. Besides this the comparable judicial decisions concerning the utilization of tele-
grams and telex identifications has to be considered. In older judgements protection under
identification mark law was denied within this field.53 The BGH based its “Fernschreiberken-
nung”54-decision on the fact that the use of a (potentially confusing) telex code infringes the
prior identification if being used as an identification mark. The court of appeal also assumed
this regarding the use of a telex code consisting of the firm name. The court found it signifi-
cant that the telex participant had been able to choose the identification himself and therefore
had been able to choose an identification which because of its combination of letters was suit-
able for referring to himself. The use of a telex code on business stationery also justifies un-
derstanding the code as an identification reference to the company.55 Even the use of a name
as a third-level domain should be a utilization of identification marks according to these
ideas.56
There could be a change in the legal situation if the utilization of search engines becomes
relevant. Such tools (as for example “Alta Vista” or “Yahoo”) give comprehensive details
about the question of which company is hidden behind each homepage. The implementation
of new First Level Domains (see above) could also lighten the legal trademark situation. The
danger of the domain name referring to the wrong company and hence the danger of mistaken
identity, would be rare. Domains would then again be reduced to their technical function of
identification.


In addition it needs to be clarified if the identification mark that is the matter of the dispute
has distinctive characteristics. This is not the case for example for “online” as part of a com-
pany’s name57 or for the name “toolshop”.58



52
   OLG München, 16 September 1999, ZUM 2000, 71.
53
   See RGZ 102, 89 – EKA; BGHZ 8, 387 – Telefonnummern; BGH, GRUR 1955, 481, 484 – Telegrammadre-
sen.
54
   BGH, GRUR 1986, 475; compare to this OLG Hamburg, GRUR 1983, 191.
55
   Similar the US-American decisions like Morrim v. Midco Communication, 726 F Supp. 1195 (D Minn. 1989).
56
   LG Duisburg, judgment of 2. December 1999, MMR 2000, 168 = NJW-CoR 2000, 237 (headnote).
57
   OLG Köln, judgment of 27. October 2000 – 6 U 209/99 (not published).
58
   KG, judgment of 13. June 2000, K&R 2000, 514 headnote.
                                         Thomas Hoeren-Internet Law                                    42
b) Utilization in Business Dealings

Protection by § 5 [1] MarkenG requires a “utilization of the company’s identification mark in
business dealings”. The use of identifications by private users is generally not included.59 But
it is questionable whether the assignment of domains to private persons for the purpose of
reselling them to companies comes within the scope of the MarkenG. Because of the fact that
the assignment to private persons normally has the purpose of a private utilization the Mark-
enG is only applicable if there are clear indications of planning a business use.60 For this it is
sufficient that there are advertisements on the website that is the matter in dispute.61 If the
private person supplies the reacquisition on a payment basis this can be a matter of circum-
stantial evidence of business activity. At least it is sufficient for a preventive action for an
injunction. Detached from the character of business dealings it is possible to fall back on § 12
BGB subsidiary, provided that it is about a company’s identification mark. But the use of an-
other’s trademark as part of a domains leaves an important loophole. Even if the registration
of such a domains is regarded as a utilization as defined by § 14 MarkenG,62 you cannot say
anything about the similarity to goods or services regarding the danger of confusion.


c) Utilization as Identification Marks

Pursuant to § 16 WZG, the predecessor of the Markengesetz, using the trademark of another
was permitted if the utilization took place as “non-trademark” use. The prevailing opinion
therefore concluded that only the use as an identification mark was protected by the WZG.
The MarkenG has given up this restriction.63 §§ 14, 15 MarkenG refer to only the use in gen-
eral without restricting it. The case of merely mentioning a name does not come under trade-
mark law and the right to the use of a name: A football fan for example is allowed to use the
name “Armenia Bielefeld” as a search item on the Internet.64 This use is comparable to the
(also non-restricted) use of a name in press reports, on the index of a sports book or as a
headword in an encyclopedia. According to this the use of a name is allowed if everyone can
tell that not the owner of the name itself is speaking, but rather that third parties are saying
something about it.

59
   Also OLG Köln, judgment of 26 october 2001, MMR 2002, 167 – lotto-privat.de.
60
   See also Kur, Festgabe Beier 1996, 265, 273.
61
   LG Hamburg, court order of 1. March 2000, MMR 2000, 436 – luckystrike.
62
    In favor Ubber, WRP 1997, 497, 507; against it with good reasons OLG Dresden, CR 2001, 408 –
kurt.biedenkopf; OLG Köln, judgment of 26 october 2001, MMR 2002, 167 – lotto-privat.de; OLG Karlsruhe,
judgment of 12. September 2001, MMR 2002, 118 – dino.de; Bücking, NJW 1997, 1886, 1888; Völker/Weidert,
WRP 1997, 652, 657.
63
   Different opinion Sack, GRUR 1995, 81.

                                      Thomas Hoeren-Internet Law                                    43
d) Danger of Confusion

If someone uses a domain which contains the identification mark of another company or a
similar mark without authorization and thus creates a danger of confusion, they can be sued
for an injunction (§ 15 [2] and [4] MarkenG).65 But even without a danger of confusion third
persons are not allowed to use marks of another provided that their meaning of identification
or esteem will be taken advantage of in an unfair way or will be interfered with (§ 15 [3]
MarkenG). If the tortfeasor acts wilfully or negligently he will be liable for compensation (§
15 [5] MarkenG). The owner of a business is responsible for the misconduct of employees or
authorized persons (§ 15 [6] in connection with § 14 [7] MarkenG).


Transferring these given standards onto the Internet according to § 15 [2] and [4] MarkenG
every company is able to forbid the use of its identification mark in an Internet address by a
business competitor. The competitive relation can arise already where the impression is given
that the trademark owner and the domain owner could be collaborating. Links on homepages
are especially dangerous. An attribution already lies in the fact that the user associates the
homepage with the trademark owner – for example with the help of links or frames that lead
to companies in the same branch of trade.66 Even if there are no links a reference to an exter-
nal website should be sufficient.67


If the companies act in different branches or if they address different target groups with their
trademarks a danger of confusion is not given normally.68 This is particularly the case for do-
mains which have merely been registered, which of course do not have relation to any
branch.69 Even non-competitive companies are not allowed to use other –well known- desig-
nations as part of their address pursuant to § 14 [2] no. 1, 2, § 15 [3] MarkenG if this leads to
an exploitation or rather an infringement of the distinctiveness or esteem.

64
   LG Detmold, 26 February 1997 – 2 S 308/96 (not published).
65
   Indirect danger of confusion is sufficient; see the judgment of the United States District Court, N.D. Illinois of
17 July 1996 in the matter of Actmedia Inc. V. Active Media International, Civil Docket Nr. 96C3448, 1996 WL
466527 (N.D. Ill.).
66
   See for the danger of confusion through links on homepages in the same industry LG Mannheim, judgment of
10. September 1000, MMR 2000, 47.
67
   LG Berlin, judgment of 30. October 1997 – 16 O 236/97 (not published).
68
   OLG Frankfurt, judgment of 4. May 2000, MMR 2000, 486 = WRP 2000, 772
69
   Other opinion LG Düsseldorf, CR 1996, 325 epson. The regional court wanted to entirely dispense with the
verification of the product similarity in there cases; similar OLG Rostock, MMR 2001, 128; LG München I,
NJW-CoR 1998, 111; LG Bochum, judgment of 27. November 1997 – 14 O 152/97 – hellweg; Biermann, WRP


                                           Thomas Hoeren-Internet Law                                             44
Concerning the exploitation of reputation it should be sufficient that an internet-user is en-
ticed to call up a homepage that he or she otherwise would not have – without the infringing
use of an identification mark. In any case this applies to well-known marks.70 A necessary
criticism is however, that the mere utilization of a increased attention is not yet an exploita-
tion of reputation. To fulfil this, the reputation of the products of the domain owner itself must
have been improved through use of the domain. Therefore the respective website of the do-
main owner and the products advertised there must be inspected.


An interference with commercial expansion is assumed if the domain name is blocked for the
owner of the trademark.71 A registration without any relevant cause is as such grounds for an
accusation.72 Similar rules apply to a direct redirection from a website to another central web-
site of the domain owner.73 The mass registration of domains with relation to known trade-
marks (so-called domain name trafficking) is sufficient.74 Similar rules are applied to the
claim of excessive payment for the transfer of a domain to the trademark owner.75


Further it will be sufficient if customers of the trademark are given the impression has that the
owner is in financial difficulties because of the lack of use of the connected website.76 The
Higher Regional Court of Hamm77 however in its “Krupp” decision, despite the differences
between the branches – steel industry against an online agency – found that not only the dan-
ger of dilution but also the danger of confusion had been established. The reason was the par-
ticularly large significance of the “Krupp” company in business dealings, which stands for a
whole era of German industrial history and which had already become a synonym for the steel
industry per se.




1999, 999; Wagner, ZHR 1998, 712seq. Other opinion rightly Bettinger, in Mayer-Schönberger and others (Ed.),
Das Recht der Domains, Vienna 2001, 128, 147seq.; Fezer, WRP 2000, 669.
70
   OLG München, MMR 1998, 668 – Freundin; Olg Karlsruhe, MMR 1999, 171 – Zwilling; OLD Düsseldorf,
NJW-WettbewerbsR 1999, 626 – UFA (at present in appealing); OLG Hamburg, MD 2001, 315; similar LG
München I, judgment of 9. January 1997 – 4 HKO 14792/96 (not published); LG Hamburg, judgment of 13.
Janury 1999 – 315 O 478/98; LG Mannheim, K&R 1998, 558 – Brockhaus.
71
   OLD Dresden, K&R 1999, 133, 136; LG Hambrug, MD 2001, 376; LG Köln, judgment of 19. June 1999 – 31
O 55/99.
72
   OLG München, MMR 1998, 668, 669; OLG Karlsruhe, MMR 1999, 171, 172.
73
   OLG München, MMR 2000, 100, 101.
74
   OLG München, MMR 2000, 100, 101; LG Hamburg, judgment of 13. January 1999 – 315 O 417/98.
75
   LG München I, judgment of 7. May 1997 – 7 HKO 2682/97; LG Bonn, judgment of 22. September 1997 – v1
O 374/97.
76
   LG Bremen, judgment of 13. January 2000 – 12 O 453/99 (res judicata), MMR 6/2000.
77
   OLG Hamm, 13 January 1998, 214 with notes by Berlit.
                                       Thomas Hoeren-Internet Law                                        45
e) Protection against Similar Domains?

In German law the competitors‘ need for unrestricted use has to taken into consideration in
the protection of identification marks. Addresses are limited on the Internet; this is especially
the case for specifications on the second-level domain. Concerning the earlier protection of
typical presentation and appearance of goods according to § 25 WZG the judiciary was of the
opinion that there was a predominant need of the general public to keep simple descriptions of
nature and intended purpose unrestricted.78 Therefore companies are protected if competitors
use an address identical to the identification mark of the company on the second- or third-
level domain79 (e.g. “ibm.de” or “ibm.eunet.de”). In such a case the NIC or the provider in
each case will later change the name. But it is arguable if a trademark owner can take action
against similar domains. A part of the jurisdiction refuses this. The Frankfurt Higher Re-
gional Court stated in its decision of 13 February 199780, that a registered online address only
conflicts with an identical use by another person so that even by using slight modifications or
supplements the actual blocking effect can be overcome. But in my opinion the general juris-
diction about the danger of confusion must be applied here.81 The Regional Court Koblenz
did not forbid the use of the domain name “allesueberwein.de” despite an injunction concern-
ing the domain “alles-ueber-wein.de”.82 The Regional Court Düsseldorf argued also gener-
ously, that there is no danger of confusion between “T-Online” and “donline” because of the
low distinction of the term “T-Online”.83 The danger of confusion between the domain pizza-
direkt.de and the (almost seen as a describing term) trademark pizza-direct was negated.84 An
infringement of a trademark by the internet domain mbp.de in relation to the trademark
“MB&P” was also negated.85 The OLD Rostock takes a different view in the judgement mue-
ritz-online.de86 According to this there is an infringement of a trademark if the domain name




78
   BGH, GRUR 1960, 541 – „Grüne Vierkantflasche“; GRUR 1960, 83 – „Nährbier“; GRUR 1971, 305, 308 –
„Konservendosen II“; GRUR 1979, 470 – „RBB/RBT“.
79
   See LG Duisburg, judgment of 2.December 1999, MMR 2000, 168 = NJW-CoR 2000, 237 (headnote) – kam-
plintfort.cty.de.
80
   13 February 1997, WRP 1997, 341 f.
81
   Austrian OGH, court order of 3. April 2001, GRUR Int. 2002, 450; also Biermann, WRP 1999,999,1000;
similar Bettinger GRUR Int. 1997, 402, 415; Kur, CR 1996, 590, 593; Viefhues, NJW 2000, 3239, 3241.
82
   LG Koblenz, MMR 2000, 571.
83
   LG Düsseldorf, judgment of 21. July 1999 – 34 O 56/99 (unpublished). Differently LF Frankfurt, court order
of 15. July 1997 – 2-06 O 409/97 in the case t-online vs. t-offline.
84
   OLG Hamm, NJW-RR 1999, 632.
85
   OLD München, judgment of 20. September 2001, MMR, 170 – mbp.de
86
   judgment of 16. February 2000, MMR 2001, 128 (headnote) = K&R 2000, 303 = NJWE-WettbewR 2000,
161.
                                          Thomas Hoeren-Internet Law                                       46
and the trademark differ only in umlauts and case sensitivity. A danger of confusion was also
assumed in the case “intershop” vs. “intershopping”.87


f) “com”-Addresses

The legal situation concerning “com”-addresses is also unclear. In general a trademark owner
can take action against the use of its trademark within a com-address in the same way as with
de-addresses.88 Similar rules apply to the use of other gTLDs, like in the case of “WDR.org”
for a portal about specialized journalism.89 The gTLDs do not have a distinguishing effect; the
Second-Level-Domain is decisive.90


There, conflicts often arise between owners of foreign and German designations, for example
use of the name “persil.com” for the (in British law legitimate) Unilever.
The main problem in these cases is the enforcement of claims to compel someone to refrain
from doing something. Because if only the top-level domain changes, often both domain
owners are authorized within their area of legal protection of identification marks. So the
American owner of the domain “baynet.com” can legitimately refer to its rights according to
US-American trademark law as well as the Bavarian government to the German rights to use
the domain “baynet.de”. If you wanted to make the operative provisions of a judgement in
such a case you would have to restrict the entitlement to use the domain only within the rele-
vant home state. But such a restriction is technically unenforceable. Because of the technical
organization alone of the WWW the providers of the site “baynet.com” are unable to prevent
the Bavarian government making their baynet.de service available to be called up in the USA.
On this basis the Kammergericht (Court of Appeal) in its Concept-decision91 took the neces-
sary step of refusing to allow a disrupting party’s attempt to rely on potential restrictions on
worldwide availability as a defense against this sanction.


g) Use of the Same Name

It is doubtful whether a domain name which has been fairly derived from an owner’s name
can be used if it collides with another name. On this score part of the literature refers to the


87
   OLG München, judgment of 20. January 2000, MMR 2000, 277 = NJW-CoR 2000, 308 (headnote)
88
   OLG Karlsruhe, judgment of 9. June 1999, MMR 1999, 604 = CR 1999, 783 = AfP 1999, 378.
89
   LG Köln, judgment of 23 March 2000, MMR 2000, 625.
90
    Also recently the Hanseatic Higher Regional Court – court order of 4.2.2002 – 3 W 8/02;
http://www.jurpc.de/rechtspr/20020153.htm
91
   KG, 25 March 1997 – 5 U 659/97, NJW 1997, 3321.
                                        Thomas Hoeren-Internet Law                         47
same-name-right (§ 23 Nr.1 MarkenG).92 Accordingly, the person who has registered the do-
main first gets the opportunity. In relation to this, the owner of an older mark with priority
which has not been registered yet only has a right to restrain the other party if the use of the
domain name is against public policy.
In this context the Bochum Regional Court and the Hamm Higher Regional Court93 decided
on appeal that the owner of a firm name has a right of restraint against a user of the same
name who is younger in priority according to the application of the same-name-right from
trademark law. The owner of a retail trade business had chosen his family name as a domain
name, which was identical to the firm’s name. After a weighing of interests the court was of
the opinion that it was appropriate for the trader to make slight additions which did not affect
the actual distinctiveness of the address. However he had to waive his chosen domain address
anyway to prevent the danger of confusion. But if it is not a well-known company (as was the
description “Krupp” in the case of the OLD Hamm), the principle “first come, first served” is
applied in favor of the one who registered his family name which is identical to a firm name
first.94 This jurisdiction was advanced by other courts, for example in the case of the firm
name Wolfgang Joop.95 These principles are valid only for well-known trade-marks or identi-
fication marks of companies, not for small companies and their names.96 The OLG Koblenz
takes the view that the principle “first come, first served” should be applied to “normal”
names of cities in case of equal names.97
A solution that contains an agreement on demarcation, where a common portal for both right-
owners is created, is also conceivable (e.g. http://www.winterthur.ch).


f) Generic Terms

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92
   Kur, Festgabe Beier 1996, 265, 276.
93
   OLG Hamm, 13 January 1998 – 4 U 135/97, MMR 1998, 214 with annotation by Berlit.
94
   LG Paderborn, judgment of 1. September 1999, MMR 2000, 49.
95
   LG Hamburg, judgment of 1. August 2000, MMR 2000, 6220 with notes by Bottenschein.
96
   See LG Paderborn, judgment of 1. September 1999, MMR 2000, 49 = ZUM-RD 2000, 344.
97
   OLG Koblenz, judgment of 25. January 2002, WRP 2002, 340 = K&R 2002, 201 – vallendar.de.
                                        Thomas Hoeren-Internet Law                            48
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 0DWW]KLDV 6FKU|GHU =XU =XOlVVLJNHLW YRQ *DWWXQJVEH]HLFKQXQJHQ DOV 'RPDLQV LQ
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 7KLHOH5RKOILQJ *DWWXQJVEH]HLFKQXQJHQ DOV 'RPDLQ1DPHV LQ 005   %HWWL
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Finally the question arises as to whether generic terms and descriptive specifications can be
registered as domain names.98 According to trademark law such specifications cannot be
given to a single person because of the lack of distinctiveness (§ 8 [3] Nr. 1 MarkenG) or be-
cause of a special need to keep terms free (§ 8 [2] Nr. 2 MarkenG). As a result the utilization
of domains like “anwalt.de” (lawyer), “messe.de” (tradefair) or “notar.de” (notary) is admis-
sible. But in all these cases it has to be noted that the designation must not contravene canons
of professional etiquette or competition rules. As a result the use of the domain “lawyer” will
be reserved for lawyers. A non-lawyer would contravene canons of professional etiquette or
would – because of the connected channeling of customers - infringe § 3 UWG.
With this in mind the OLG Frankfurt emphasized in its decision of 13 February 199799 that
only descriptive terms and therefore terms which need to be kept freely available like “econ-
omy” or “economy-online” are not protected by trademark law. Limitations for the choice of
such descriptions could at most arise from §§ 1, 3 UWG. The channeling function of the do-
main names has to be considered, particularly if a user simply chooses the online-supply with
the most extensive list of addresses and does not pay any attention to other suppliers. This
effect would be excluded if online-addresses were used merely for publicity campaigns by the
respective companies. In addition, they would have to be adjusted more precisely to particular
user-habits.
The Higher Regional Court of Hamburg, which had to decide about the domain “mitwohnzen-
trale.de” also precluded an analogous application of § 8 MarkenG to domain registration.100
When it came to an assessment of competition law however, the court came to a different
conclusion from the aforesaid decision. It decided that the use of the domain by an association
of housing agencies was anticompetitive because it fell under the category of channeling cli-
ents according to § 1 UWG. Customers who wanted better service in the field of housemate-
finding services would be “caught” by the domain. The court considered the users` habits


98
   See also Kur, CR 1996, 325, 328.
99
    WRP 1997, 341seq.. similar also OLG Braunschweig, MMR 2000, 610 – stahlguss.de. Incorrect OLG
München, MMR 1999, 547 – Buecher.de, which confused the question of the generic term with the use accord-
ing to trademark law.
100
    OLG Hamburg, judgment of 13. July 1999, MMR 2000, 40 = CR 1999, 779 with notes by Hartmann = K&R
2000, 190 with notes by Strömer; see also EwiR 2000, 193 (Hoeren). Other opinion Mankowski, MDR 2002, 47,
48, who pleads for an analogous application of § 8 MarkenG.
                                         Thomas Hoeren-Internet Law                                    49
when looking for Internet services. A significant fraction of users did not just use search en-
gines but also tried entering a domain address which included the company or trademark
name they were searching for. This practice would extend to industries, product and generic
terms. Significant numbers of users who found a website in this way ceased looking for alter-
native services for reasons of convenience. Other courts followed this opinion, e.g concerning
the terms “Rechtsanwalt”,101 “rechtsanwaelte.de”,102 “zwangsversteigerung.de”103 of “haupt-
bahnhof.de”104. In the literature these guidelines were also followed.105 Other courts dissented
                                                                  106
on this opinion, e.g. concerning terms like “stahlguss.de”              , “lastminute.com”107, “zeitar-
beit.de”108, “autovermietung.com”109, “fahrplan.de”110, “sauna.de”111 or “kueche.de”112. Here
it was important that there were a lot of descriptive terms for this field of activity.113 The OLD
Braunschweig stated even more clearly in the above-mentioned judgement that channeling
through the registration of purely descriptive domain names is not by itself an infringement of
competition law.114 The LG Hamburg focuses on whether the impression is given that this is a
portal for an inventive and new service. The danger of channeling does not exist if interested
parties know that a large number of companies offer this service.115 For the LG Darmstadt it
was important for the “kueche.de”-case if a “careful, critically testing and understanding con-
sumer” could immediately tell when accessing the website that he or she was obtaining the
services of a single individual enterprise.


In the meantime the BGH (Federal Supreme Court) adjudged the case “mietwohnzentrale.de”
on 17. May 2001.116 The usage of generic terms is generally admissible; in particular there is
no infringement of public policy as defined by § 1 UWG and the developed cases. The do-
main owner only made use of an advantage on offer without interfering unfairly with third

101
    OLG Stuttgart, MMR 2000, 164 concerning a vanity-number.
102
    LG München I, judgment of 16. November 2000, MMR 2001, 179 with notes by Ernst = CR 2001, 128 =
K&R 2001, 108 with notes by Soznitza.
103
    LG Köln, judgment of 10. October 2000, MMR 2001, 55.
104
    LG Köln, judgment of 23. September 1999, MMR 2000, 45 = CR 1999, 649
105
    Also similar to this Bettinger, CR 1997, 273; Sosnitza, K&R 2000, 209, 212; Ubber, WRP 1997, 497.
106
    OLG Braunschweig, MMR 2000, 610.
107
    LG Hamburg, MMR 2000, 763, 765.
108
    LG Köln, MMR 2001, 197.
109
    LG München, judgment of 20. September 2000, MMR 2001, 185.
110
    LG Köln, 1 December 1999 – 31 O 513/99.
111
    OLG Hamm, judgment of 2. November 2000, MMR 2001, 237. Similar LG Münster, judgment of 14. April
2000 – 23 O 60/00
112
    LG Darmstadt, judgment of 17. April 2001 – 16 O 501/00 (unpublished).
113
    LG München, judgment of 28. September 2000, MMR 2001, 185.
114
    OLG Braunschweig, MMR 2000, 610
115
    LG Hamburg, MMR 2000, 763, 765


                                     Thomas Hoeren-Internet Law                                     50
parties. There is no need for a new case group for domain names. And there is no need to ap-
ply trademark law analogously and the need to keep generic terms freely available which ex-
ists there, because here there is no exclusive right. The BGH draws a limitation where there
may be an abuse of legal rights, e.g. if the generic term is blocked by the user both under dif-
ferent TLDs and in different spellings. Further it must be assessed if the identifier “mit-
wohnzentrale.de” creates a relevant danger of misleading because the impression may be
given that this is the only or most important service within this category.117 The necessity of
both limitations was criticized in the literature rightly.118 Nevertheless this judgment and its
argumentation is doing the rounds at the moment: the LG Düsseldorf119 judged that the use of
the generic term “literaturen.de” (literatures.de) could be contrary to public policy, if the for-
mal position is used to gain profit at a level which does not correspond to any service being
provided by the right-owner. The LG Frankfurt assumed that the offer to purchase sub-
domains under “drogerie.de” (drugstore) is misleading as defined by § 3 UWG.120 The OLD
Nürnberg decided using the same argumentation concerning the use of the domain
www.steuererklaerung.de (tax declaration) by an association that helps with wage taxes.121



 3URWHFWLRQ RI 7LWOHV DFFRUGLQJ WR †  >@ 0DUNHQ*

The special protection of magazine, journal or book titles under § 5 [3] MarkenG is also very
important.122 The protection of titles has gained special acceptance in the digital market due to
the fact that the Federal Supreme Court (BGH) in its FTOS and PowerPoint decisions123 ad-
mitted a protection of titles for software too. In this way a general name protection for all in-
tellectual products which can be named was established, which also includes websites and
CD-ROMs.




116
    MMR 2001, 66 with annotations by Hoeren = WRP 2001, 1286 with review by Abel 1426 = MDR 2002, 45
with annotations by Mankowski.
117
    Mankowski, MDR 2002, 47, 48 assumes that every acquisition of a generic term by a single competitor is a
misleading announcement of a leading market position.
118
    See Abel, WRP 2001, 1426, 1429seqq.
119
    LG Düsseldorf, judgment of 6. July 2001, MMR 2002, 126.
120
    LG Frankfurt, judgment of 23. March 2001, 3/12 O 4/01.
121
    OLG Nürnberg, judgment of 6. November 2001, K&R 2002, 155 = GRUR 2002, 460.
122
     The special protection of geographic terms of origin according to § 127 MarkenG should be incidentally
mentioned, but this however does not help against the use of a term of origin for the creation of an information
platform; see also OLD München, judgment of 20. September 2001, MMR 2002, 115.
123
    Court order of 24 April 1997 – I ZR 44/95, CR 1998, 5 – PowerPoint with annotation by Lehmann=NJW
1997, 3313=MMR 1998, 52 (headnote) with annotation by Hoeren. Court order of 24 April 1997 – I ZR 233/94
– FTOS, NJW 1997, 3315=CR 1998, 6=MMR 1998, 52 (headnote).
                                         Thomas Hoeren-Internet Law                                           51
As for the scope of title protection against providers, the “Karriere” decision of the Cologne
Regional Court is relevant.124 The applicant, the publishing group “Handelsblatt”, defended
itself successfully against the use of the word “Karriere” as part of a domain
(www.karriere.de). It referred to the title protection the Cologne Regional Court had already
awarded the “Handelsblatt” years before for its supplement “Karriere”.125 A user of the Inter-
net would at least assume connections in organization between the parties which in fact did
not exist. The Cologne Regional Court granted the request in its entirety; the opponent did not
oppose. The Mannheim Regional Court argued in the same generous way concerning the term
“bautip”.126
The Hamburg Regional Court holds a different opinion on the scope of title protection. In its
decision of 13 August 1997127 the court emphasized that a title protection can only be claimed
against domain addresses if the title is well-known to such an extent that the use of the Inter-
net address would point users to the magazine. For this reason the court refused to prohibit the
use of the address http://www.bike.de for a publicity platform. The word “bike” was held to
be of an obviously descriptive nature and nothing had been submitted concerning the familiar-
ity of the magazine “bike”. Only a protection of a concrete work can come into considera-
tion.128



 6FRSH RI †  %*%

The Frankfurt Higher Regional Court pursued a different path in its “Weideglück” deci-
sion.129 According to this decision everyone can be liable for immoral obstruction if they reg-
ister a domain which contains names or parts of names that are not connected with their own
name or activities, and if they do not have an understandable personal interest in the domain
in question. In this particular case a student had registered the domain “weideglueck.de” for
himself. During proceedings he submitted contradictory and barely comprehensible argu-
ments. Therefore the court decided in favour of the plaintiff who could point to a series of
registered trademarks with the name “Weideglück”. By applying § 826 BGB the senate filled


124
    Court order of 10 May 1996 – 31 O 315/96.
125
    AfP 1990, 330, 331.
126
    Judgment of 18. December 1998, CR 1999, 528 (headnote).
127
    MMR 1998, 46.
128
    OLG Hamburg, judgment of 5. November, MMR 1998, 159 = CR 1999, 184 with annotations Hackbart =
NJW-RR 1999, 625.
129
    Court order of 12 April 2000, MMR 2000, 424 = CR 2000, 615 = WRP 2000, 645 = MDR 2000, 1268. Simi-
lar also OLG Nürnberg, 1 January 2000, CR 2001, 54; and OLG Frankfurt, 8. March 2001, MMR 2001, 532 –
praline-tv.de
                                        Thomas Hoeren-Internet Law                                 52
a dangerous gap in protection. The gap occurs because § 14 MarkenG does not apply if a do-
main which contains another trademark is not being used in a competitive way. Neither does §
12 BGB help (see below), because § 12 BGB only protects names of companies but not
names of products. However, the Higher Regional Court decision must be treated with cau-
tion; it dealt with a very special case where the defendant made very inconsistent submissions
to the obvious annoyance of the court.


Additionally the OLG Frankfurt also applied § 826 BGB where someone registered thousands
of domains in order to sell them and demanded remuneration from third parties wanting to
offer their services under their own identification mark on the internet.130 In this case the
newspaper “Die Welt” took action against the owner of the domain “weltonline.de”. Accord-
ing to the Frankfurt judges the newspaper had to accept someone using the terms “Welt” and
“Online” as descriptive terms within a domain. But this does not apply to a speculator with-
out any personal interest wanting to hamper the trademark owner and/or make it buy the do-
main.



 *HQHUDO 1DPH 3URWHFWLRQ DFFRUGLQJ WR †  %*%

§ 12 BGB is the source of protection of identification marks. As lex generalis it includes the
MarkenG and § 37 HGB. Protected are names of natural persons, professional and stage
names131 as well as names of legal persons, especially those of firms. In particular, public-law
corporations are protected by § 12 BGB against unauthorized use of their names in civil law
dealings.132 Also the name of a registered association enjoys the protection of § 12 BGB, if
the name is sufficiently distinctive.133 Not protected are generic terms like “Marine”134,
“Volksbank”135 or “Datenzentrale”136. In Germany the decision of the Mannheim Regional
Court in the matter of “Heidelberg” caused quite a sensation in this area.137 According to this
decision the use of the Internet address www.heidelberg.de by the Heidelberger Druck-

130
    judgment of 10. May 2001, MMR 2001, 696 – weltonline.de
131
    For pseudonyms see LG Köln, judgment of 23. February 2000 – 14 O 322/99, CI 2000, 106.
132
    BGH, GRUR 1964, 38 – Dortmund grüßt.
133
    OLG München, judgment of 15. Novemeber 2001, MMR 2002, 166 – Literaturhaus.
134
    LG Hamburg, judgment of 13 Oktober 2000, MMR 2001, 196 = K&R 2000, 613.
135
    BGH, NJW-RR 1992, 1454.
136
    BGH, GRUR 1977, 503.
137
    LG Mannheim, 8 March 1996 – 7 O 60/96, ZUM 1996, 705 with annotation Flechsig = CR 1996, 353 with
annotation by Hoeren. Similar LG Braunschweig, 28 January 1997 – 9 O 450/96, CR 1997, 414 = NJW 1997,
2687 – (Braunschweig) and OLG Hamm, 13 January 1998 – 4 U 135/97, MMR 1998, 214 with annotation by


                                     Thomas Hoeren-Internet Law                                   53
maschinen GbR infringed the city of Heidelberg’s right to use of a name under § 12 BGB.
Taking exactly the opposite approach, the Cologne Regional Court rejected the applicability
of § 12 BGB in several decisions138 for the reason that domain names, like telephone num-
bers, bank or post codes, can be freely chosen. Besides, the identification function was not a
general feature. These decisions – judged by a general civil chamber – could well be incorrect
however.
In the meantime it has become generally accepted that names of communities are also pro-
tected by the right to use of a name where they are used as part of a domain.139 This protection
also covers names of city districts140, the all-inclusive term “Deutschland” 141 or the names of
national organizations.142 This does not include small towns, whose names have no out-
standing importance, at least if the domain is the family name of the manager of a company
which uses the domain.143 Moreover everyone who chooses the name of a city for their home-
page domain is making use of a name protected by § 12 BGB and giving the impression that
their domain is in fact the internet presence of the city itself, acting as the owner of the name.


As well as protection against name-denial, § 12 BGB also provides protection against usurpa-
tion of names. The latter includes especially so-called confusion of association.144 This is the
case when the false impression is given that the name owner has consented to the use of its
name.145 In principle everybody has the right to use their own name in business dealings. But
there is an exception for names of non-natural persons. With the names of legal entities espe-
cially the point in time when a designation became a name within the meaning of § 12 BGB is
decisive. The right to use the name depends on which name was used first. These guidelines
determine above all the jurisdiction concerning city names, according to which every use of a
city name as part of a domain is a usurpation of the name.146 But it is always decisive what the



Berlit; LG Lüneburg, CR 1997, 288; LG Ansbach, NJW 1997, 2688 – (“Ansbach”); OLG Köln, court order, 18
January 1999, GRUR 2000, 799.
138
    LG Köln, court orders, 17 December 1996, CR 1997, 291 f = BB 1997, 1121 = GRUR 1997, 377.
139
    See OLG Karlsruhe, K&R 1999, 423 = OLGR 99, 376; – Bad.Wildbad.com. OLG Brandenburg, 12. April
2000, K&R 2000, 406 with notes by Gnielinski; OLG Köln, 18. December 1998, MMR 1999, 556 (headnote) =
CR 1999, 385 with notes by Biere = K&R 1999, 234.
140
    See LG Flensburg, 8. January 2002, K&R 2002, 204 – sandwig.de (though the judgment rejected a claim of
the city because of the same name of a private person).
141
    LG Berlin, 10 August 2000, MMR 2001, 57 = CR 2000, 700.
142
    LG Nürnberg, 24. February 2000, MMR 2000, 629 – Pinakothek.
143
    LG Augsburg, 15. November 2000 – 6 O 3536/00, MMR 2001, 243 – boos with notes by Florstedt 825, con-
firmed by the OLD München, 11. July 2001, MMR 2001, 692 = CR 2002, 56.
144
    BGHZ 91, 117, 120; 98, 95.
145
    BGHZ 119, 237, 245; NJW 1983, 1186.
146
    OLG Köln, 18 December, MMR 1999, 556=CR 1999, 385; similar OLG Karlsruhe, 9 June 1999, MMR 1999,
604=CR 1999, 783; OLG Rostock, 16 February 2000, K&R 2000, 303 with annotation by Jaeger.
                                          Thomas Hoeren-Internet Law                                    54
predominant section of internet-users of the same language area of the Top-Level-Domain
associates with the term of the Second-Level-Domain. A town with the name “Winzer”
(winegrower) can not take any legal action against the use of this term, which is understood as
a generic term by most of the users.147 The use of an external name for a domain that leads to
a critical discussion forum can be authorized by the freedom of opinion protected by basic
rights. In fact the LG Berlin prohibited the organization Greenpeace from using the domain
oil-of-elf.de because of the danger of confusion.148 But this decision was reversed by the
Court of Appeal with reference to the special interests of Greenpeace.149 The usurpation of a
name can already result from the mere registration of a domain with parts of an external
name.150 But the use of a generic domain does not infringe the rights of a name of a family
name that is coincidentally similar to a generic term (here the term “Säugling” – infant).151
Further the use of the domain “Duisburg.info.de” by a publishing house for city maps does
not lead to an assignment confusion that disadvantages the city of Duisburg.152


The Munich Regional Court I in its decision of 15 January 1997153 affirmed an injunction
relief for Juris GmbH against a computer firm which had reserved the name “juris.de”. An
infringement of the right to use of a name according to § 12 BGB was also affirmed. Even
though the term “juris” was only an abbreviation of the firm name, a GmbH firm also comes
under the protection of § 12 BGB, as do abbreviations and catchwords derived from the firm
name, even if the firm does not take the form of a partnership. The abbreviation “juris” was
the only distinctive part of the firm name which could be understood in business dealings as
an abbreviation of the firm name.


Another interesting decision154 concerning proceedings about the use of terms of origin in
domain names was made by the Rostock Higher Regional Court. The plaintiff, a regional pri-
vate information provider, wanted to protect its designation “Müritz-Online” which was rec-
ognized as a brand name, against the use of the domain name “mueritz-online.de” by the fed-
eral state of Mecklenburg-Vorpommern. The court affirmed a right of restraint in favour of
the plaintiff. It had been registered at the Patent Office as owner of the name before the fed-


147
    LG Deggendorf, judgment of 14. December 2000, CR 2001, 266.
148
    LG Berlin, court order of 18. January 2001 – 16 O 421/97
149
    Judgment of 23.10.2001 – 5 U 101/01
150
    OLG Düsseldorf, MMR 1999, 369 – nazar.
151
    LG München I, 8. March 2001, CR 2001, 555 – saeugling.de
152
    LG Düsseldorf, 9. May 2001 – 34 O 16/01.
153
    1 HKO 3146/96, WM 1997, 1455; NJW-RR 1998, 973.
154
    OLG Rostock, 16 February 2000, K&R 2000, 303.
                                           Thomas Hoeren-Internet Law                       55
eral state became interested in “mueritz-online”. So he got there first. The federal state as a
territorial entity did not have the same rights to its name as a city. There would have been a
great danger of confusion so the right of restraint was affirmed.



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a) Injunctive Relief

First of all it should be remembered that trademark law is based on injunctive relief. The in-
fringing party has to make a declaration of injunctive relief. If it does not it can be compelled
to do so under §890 ZPO. When somebody is ordered to refrain they are responsible for mak-
ing sure the domain is deleted at the DeNIC and in search engines.155 A notice on the website
that the homepage is not accessible because of a server change-over is insufficient.156 The
OLD Köln lightens the obligations of the domain owner concerning search engines; he or she
cannot be imputed if search engines refer users to the forbidden domain later on.157


b) Compensation for Damages because of Surrender

Another aspect is the injured party’s claim for damages. The status that would have existed
without the infringing event has to be restored (§249 s. 1 BGB). In this respect the injured
party can always demand that the injuring party send a declaration of waiver to the DeNIC.


When the domain is deleted in the DeNIC-Registry the risk arises of a third party acquiring
the now available domain, meaning the right-holder now has to take legal action again. If the
right-holder demands a transfer of the domain to itself, the injuring party would be obliged to
declare its consent to such a transfer of names to the respective member of the DENIC from
which it previously received the domain.158


155
    LG Berlin, 4. October 1999, MMR 2000. 495; similar LG Berlin, 29.July 1999, K&R 2000, 91.
156
    LG Berlin, 29. July 1999, K&R 2000, 91.
157
    OLG Köln, 13. June 2001, MMR 2001, 695
158
    So LG Hamburg, 25. March 1998 – 315 O 792/97 – eltern.de, K&R 1998, 365.
                                        Thomas Hoeren-Internet Law                              56
Whether such a claim is admissible is very controversial, because in this case the tortfeasor
would be obliged to enhance the right-holder’s position and not just to abate the nuisance. In
this regard the OLG Hamm assumes in its “krupp.de” decision159 that §12 BGB does not pro-
vide a claim to transfer a domain. In favor of this solution is the fact that the requirements of
injunctive relief are regularly met by “doing nothing”. At the most the deletion of the domain
could be seen as part of the claim of abatement. In fact it is unclear why the tortfeasor should
be obliged to transfer the domain. The Munich Higher Regional Court however decided dif-
ferently in March 1999 about the domain “shell.de”160. The situation of an owner of an identi-
fication mark was held comparable to that of an inventor. Where an unauthorized patent regis-
tration has already led to a patent, the authorized person is able to demand not just the erasure
but also the transfer of the patent according to § 8 [1] PatG. Similar to this § 894 BGB grants
a right to consent to the correction of the land register to everyone whose right is not regis-
tered at all or not registered correctly, against any person who is affected by the correction.
Because the legal questions connected with the Internet had not yet been regulated the afore-
said rules could be taken into account in formulating a solution to the domain conflict. Thus,
the owner of an identification mark has a right to the transfer of the domain and/or to a correc-
tion of the domain registration against the tortfeasor. However, in its decision of August
1999161 the Munich Higher Regional Court did not apply the principles it had itself estab-
lished and rejected a right of transfer. The LG Hamburg on the other hand affirmed the right
of transfer, where this would only cancel out the damage caused.162 Meanwhile, in the dispute
between München and Hamm the BGH followed the opinion of the OLG Hamm and in the
matter of “Shell” rejected a claim to transfer.163 The authorized right-holder therefore has no
claim to transfer against the unauthorized holder of the domain name, but rather only a claim
to delete the domain name.




159
    Judgment of 13 January 1998, MMR 1998, 214 with annotations by Berlit. Similar OLG Frankfurt, 5. De-
cember 2000, MMR 2001, 158.
160
    25 March 1999 – 6 U 4557/98, MMR 1999, 427 (headnote) = CR 1999, 382 with annotations by Hackbart
384 = WRP 1999, 955 = BB 1999, 1287 = ZIP 1999, 895 = K&R 1999, 326; similar also LG Hamburg, 12 July
2000, K&R 2000, 613 – audi-lamborghini (with a consideration of a claim to eliminate consequences resulting
from §§823, 1004 BGB).
161
    rolls-royce.de, MMR 2000, 104.
162
    LG Hamburg, 17. July 2000, K&R 2000, 613 – “audi Lamborghini”; similar the judgment of 13 October
2000, K&R, 613 – marine; differently the judgment of 1 August 2000, MMR, 620 – joop.
163
    BGH, 22. November 2001, I ZR 138/99 (still unpublished)
                                        Thomas Hoeren-Internet Law                                       57
c) Removal at the DeNIC

It is not clear how the elimination of such illegal situations is supposed to occur with respect
to DENIC, the central registration service for domains in Germany.164 Partly courts165 assume
that enforcement will be done according to §890 ZPO. By maintaining the registration the
user reserves the offering of a service, so that in case of a breach of an obligation to refrain
the court can impose an administrative fine. Other courts mostly order tortfeasors to make a
declaration of intention to DENIC to the effect that the domain reservation in question should
be erased.166 In such a case enforcement is analogously applied via § 894 ZPO, so that with a
legally binding order a further enforcement (e.g. with administrative fines) is not necessary.
However it remains controversial whether an obligation to make a declaration of intention can
be imposed by court order, without an oral court hearing.167 But it is clear that because of the
danger of an anticipation of the merits of the case a temporary transfer based on a preliminary
injunction must be an exception, for example if this is the only possibility to be available via
e-mail.168 Otherwise the consent to a change of the registration can not be claimed in an expe-
dited process in general.169



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The responsibility of DENIC and its members in terms of trademark law is still unclear. The
Mannheim Regional Court in its famous “Heidelberg”-decision170 has already raised the point
of whether the registration office itself could be held liable for aiding and abetting an in-
fringement of trademark rights. However the court left this question open. In view of chang-


164
    Concerning technical details of the allocation of domains see Bähler/Lubich/Schneider/Widmer, Internet-
Domainnamen, Zürich 1996.
165
    E.g. LG Berlin, 6. February 2001, MMR 2001, 323 – deutschland.de
166
    Similar LG Wiesbaden, 9 August 2000, MMR 2001, 59.
167
    Positively LG Wiesbaden, 9 August 2000, MMR 2001, 59seq; negatively OLG Nürnberg, 11.January 2000,
CR 2001, 54 (headnote); OLG Frankfurt, 27 July 2000, MMR 2000, 752 = GRUR-RR 2001, 5 = CR 2001, 412 –
mediafacts; LG München I, court order, 4 April 2000, MMR 2001, 61.
168
    For the Austrian situation Burgstaller, MR 2002, 49.
169
    OLG Hamm, 31. May 2001, MMR 2001, 695; OLG Frankfurt, 27. July 2000, MMR 2000, 752, 753.
170
    NJW 1996, 2736.
                                            Thomas Hoeren-Internet Law                                  58
ing registration rules and organization structures we will have to wait and see what further
developments involve.171 The Magdeburg Regional Court172 affirmed a responsibility of
DENICs.173 DENIC as a neutral admission service only has a duty to examine the registration
of domain names to see whether they are clearly and obviously being used in breach of
trademark and competition law. But DENIC could not rely on this “privilege” once the factual
and legal position was brought to its knowledge as co-defendant during the oral court hearing
before the court of first instance. If DENIC continued to refuse to release the domain it would
be held jointly responsible and would be ordered to refrain. From this point on DENIC would
also be liable for damages according to §§ 12, 823 BGB and §§ 5, 15 MarkenG.
The OLD Dresden assumed in its decision “kurt-biedenkopf.de”174 that the administration of
domains by the DENIC eG is not a use of a name in a legal sense. Therefore the DENIC is not
obliged to examine the right of a registering party with regard to third party name rights. It is
only obliged to register or delete a domain if there is a legally binding and enforceable judg-
ment that prohibits the use of a domain by the defendant. The LG Wiesbaden175 pursues a
similar aim for the assertion of claims to delete a domain against the DENIC because of of-
fensive statements on a homepage. The Nassauan savings bank demanded that DENIC delete
the domain r-e-y.de, because allegedly there were offensive statements on it (“Hessian sav-
ings bank buggers”). In the judge’s opinion an examination of the web-content is neither pos-
sible nor desirable, because the only task of the DENIC is the administration of domain
names. Otherwise one could demand from service providers like Telekom the closure of a
line, if offensive statements were made during a phone call. In case of an infringement one
should contact the domain owner directly.


The Frankfurt Higher Regional Court also rejected a responsibility of DENIC176 for trademark
law infringements and overturned a differing decision by the Frankfurt Regional Court. The
registration office would only be held jointly responsible for an infringement of trademark
rights under special circumstances. This restriction would also be valid in antitrust law terms
of the assessment of § 20 par.1 GWB, which is applicable to DENIC as a monopoly company.
Special circumstances would only arise where DENIC intentionally supported a likewise in-


171
    Similar also LG Köln, 18 July 1997 – 31 O 570/97 about “com”-domains.
172
    18 June 1999 – 36 O 11/99, K&R 1999, 426; the appeal before the OLG Naumburg is pending under the file
number 7 U (Hs) 78/99.
173
    Meanwhile the decision has been set aside by the OLG Naumburg.
174
    28. November 2000, CR 2000, 408 with annotations by Röhrborn.
175
    10 O 116/01
176
    14 September 1999, MMR 2000, 36 – Ambiente,.
                                          Thomas Hoeren-Internet Law                                   59
tentional infringement by a third party, or approved it tacitly despite knowledge of the illegal-
ity. Further, a joint responsibility would be considered as a possibility where the admission
service failed to suspend the registration after gaining notice of the alleged illegality, even
though it was obvious to it that trademark or competition law was being infringed. This last
case would be assumed if the admission service could easily recognize that the domain name
applied for corresponded to a well-known designation belonging to a third party. Unlike the
Magdeburg Regional Court the Frankfurt Higher Regional Court will hold court proceedings
to be knowledge only once an enforceable judgment to refrain has been given.


In the “Ambiente” case there we now have the decision of the BGH on appeal.177 DENIC is
not obliged to examine during the registration if there are rights of third parties attaching to
the domain being registered. If it is brought to DENIC’s attention that there is an allegedly
better right to the domain it can if necessary refer the question between the domain owner and
the claimant to a judicial decision. Only if the infringement is obvious and self-explanatory to
the DENIC does it have to cancel the objected registration. In any other case it may not act
until a legally binding decision has been made or a corresponding agreement with the owner
of the registration acknowledges the stronger right of the claimant.178


It is further controversial whether DENIC has a duty to maintain a negative list. The Frankfurt
Regional Court ordered DENIC in a now legally binding decision not to assign certain do-
mains to third parties where designation rights of an owner obviously conflict with a registra-
tion.179 This order was modified by the OLG Dresden in its decision “kurt-biedenkopf.de”.180
The blocking of a domain name is only justified where any registration by a third party is an
infringement that is obvious to the party attempting to register. An obligation to act therefore
only exists for obvious infringements and where a legally binding and provisionally enforce-
able decision exists.




177
    17. May 2001, BGHZ 148, 13 = MMR 2001, 671 with annotations by Welzel 744.
178
    Similar the Austrian OGH in its decision of 13. September 2000 – 4 Ob 166/00s, that deals with the obliga-
tions to examine of the Austrian NIC during the assignment of the domain fpoe.at to a provider of right wing
extremist content. The OGH limits the liability to where the injured party demands an intervention and that the
infringement is obvious even to a juristic layperson without any further research.
179
    LG Frankfurt, 24 May 2000, MMR 2001 vol. 4 = WM 2000, 1750 = CR 2001, 51.
180
    28. November 2000, CR 201, 408, 410.
                                           Thomas Hoeren-Internet Law                                        60
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Finally, the question of a - regarding the global nature of the Internet preferably as interna-
tional as possible – reorganization of the domain registration system should be settled. The
ICANN (which has already been mentioned) is responsible for the coordination of the domain
area. Its powers stem ultimately from historical coincidences and in fact dispense with any
sort of legal foundation whatsoever.181 As long as the circle of providers was small and re-
mained within reasonable limits, the registration of domains could be managed by way of
gentlemen’s agreements. Because of the immense growth of the Internet and the number of
providers this tacit consensus is liable to break down. A solution needs to be found which
combines freedom of competition and technical stability. A central non-commercial organiza-
tion should take over the management of the IP-addresses and the functions of the IANA. The
registration of the second-level domains and the management of the top-level domain utiliza-
tion should be taken over by different organizations in free competition with each other. The
influence of the US-government on the ICANN would also be worth scrutinizing.


a) Second Domain Name Process

The present efforts to develop international domain law must also be considered, especially
within the scope of the WIPO. Following the first WIPO-round, which dealt with the area of
tension between trademarks and domains, a second round was initiated which took place from
24. September until 3. October 2001 in Geneva. There possibilities were sought for prevent-
ing bad faith and misleading use of domains which match identifying marks other than trade-
marks.
Such identifying marks are the following:
       • International Nonproprietary Names (INN’s) of pharmaceutical substances
       • Names and acronyms of (cross-national) international organizations (IGO’s)
       • Names of individuals


181
      See Nordemann/Czychowski/Grüter, NJW 1997, 1897.
                                        Thomas Hoeren-Internet Law                          61
   • Geographical data, terms and names of origin: geographical descriptions that refer to a
       certain quality, reputation or other characteristics (e.g. Cassis de Dijon or Black Forest
       raspberry brandy)
   • Trade names


It was stated that the use of such identification marks as domain names can also infringe in-
terests of the owner and this is promoted by the “First Come, First Served”-system. The re-
sults of the second WIPO-round therefore were the following recommendations:


   • INN’s: the injured party is to notify the WIPO of the identical names. The WIPO will
     then examine together with the World Health Organization (WHO) and inform the
     ICANN, whereupon the domain name will be blocked.
   • IGO’s: The respective states should solve the conflict within the scope of an administra-
     tive process, in which they can claim no entitlement to a right to use the name or the
     possible misleading effect of the domain.
   • Names of individuals: at the moment there are no international regulations concerning
     the protection of a name; merely on a national level are there some approaches. The in-
     ternational community will have to decide whether new ways of protection will be de-
     veloped.
   • Geographical data: at the moment the use of false geographical data is prevented by
     several international regulations, firstly the Paris convention, the Madrid agreement and
     the TRIPS-agreements. But there are no protection rules against the use of misleading
     geographical data in domain names. A decision about the development of such regula-
     tions or the adaptation of existing regulations on domains is still absent.
   • Trade names: the situation here corresponds with the situation of geographical names.
     But it was recommended not to set up any regulations in this area because most trade
     names are protected as trademarks anyway. Furthermore there would be a diversity of
     national protection laws, so an arbitration board would firstly have to determine the law
     that is applicable to the online-dispute.


b) Dispute Settlement

Along with the regulation of domain distribution ICANN has given thought to the settlement
of disputes. As a consequence the “Uniform Dispute Resolution Policy” (UDPR) was enacted


                                   Thomas Hoeren-Internet Law                                 62
in August 1999.182 This policy provides for dispute resolution to take place where registration
of names in the top-level domains .com, .org and .net has been abused. Added to these are the
specific country codes of certain island states (e.g. Tuvalu)183. DENIC has not accepted this
kind of dispute settlement yet. The new gTLDs .info and .biz also come under the UDRP.184


Four different organizations licensed by ICANN arrange dispute resolution:
      • The Arbitration Center of the WIPO (http://arbiter.wipo.int/domains)
      • The National Arbitration forum (http://www.arb-forum.com/domains)
      • eResolution Consortium (http://www.resolution.ca)
      • The CPR – Institute for Dispute Resolution (http://cpradr.org).


Complainants have the choice either to take legal action before civil courts or to bring the
matter to the UDRP dispute resolution organization. However, it is also possible to take legal
action before state-run courts despite the fact that a decision has already been made in a dis-
pute resolution process (Art. 4 (k) UDRP). There is no internal court of appeal however.185


The enforcability of the arbitration and its decisions is not based on national law; in particular
these are not arbitration courts. The jurisdiction of the arbitration committees is of a contrac-
tual nature. If you register a domain, you agree in advance to accept the decisions of arbitra-
tion tribunals within the scope of the UDRP.


DD 8'53

The complaint can be filed via the homepage of the chosen arbitration center; the necessary
forms can be found there and must be also filled out in writing and be sent by mail (The
original and 4 copies). The complainant has to pay the costs of the arbitration (from 1500 to
3000 $). The defendant has 20 days to respond. A case administrator checks the formal pre-
requisites of the complaint and the response and then appoints an arbitrator. Then the arbitra-
tor must decide within 14 days after his or her appointment; in total the procedure lasts no
longer than 2 months in general. The entire decision is published on the website of the arbitra-
tion center with all the names of the parties concerned.


182
    Above this are the „Rules for Uniform Domain Name Dispute Policy“ which were enacted in October 1999.
183
    See the list on http://www.arbiter.wipo.int/domains/ccTLD/index.html
184
    See http://arbiter.wipo.int/domains/decisions/index-info.html
185
    But see the proposal of M. Scott Donahey concerning the implementation of an UDRP Appellate Panel in:
Journal of International Arbitration 18 (1) 2001, 131seqq.
                                           Thomas Hoeren-Internet Law                                   63
The dispute resolution organizations do not decide in compliance with national law. Rather, in
accordance with US-American laws, they only recognize a restricted area of trade mark pi-
racy. In this Art. 4 (a) of the UDRP is decisive:
          “You are required to submit a mandatory administrative proceeding in the event that
          a third party (a “complainant”) asserts to the applicable Provider, in compliance with
          the Rules of Procedure, that
          (i) your domain name is identical or confusingly similar to a trademark or service
          mark in which the complainant has rights; and
          (ii) you have no rights or legitimate interests in respect of the domain name; and
          (iii) your domain name has been registered and is being used in bad faith.”


Each of these three characteristic features needs to be explained. With the first feature you
should note that the term “trademark or service mark” is to be interpreted widely. For exam-
ple it also means marks which are protected by US Common Law. The protected marks have
to be demarcated from identification marks which merely indicate companies or a general
usage in trade.
Everyone who can prove use of a domain as a fan-forum, for critical statements of opinion or
for their own business can refer to “legitimate interests”. The mere intention of such a use will
not be sufficient. As far as this is concerned the onus of presentation and proof lies with the
domain user. The reference to the identical nature of the names is not sufficient.186


The most difficult to put into concrete terms is the characteristic feature of “bad faith”. The
complainant has to prove that an address has been registered and is being used “in bad
faith”.187 To put this general concept of law into concrete terms § 4 (b) of the UDRP needs to
be referred to:


      For the purposes of Paragraph 4 (a)(iii), the following circumstances, in particular but
      without limitation, if found by the Panel to be present, shall be evidence of the registra-
      tion and use of a domain name in bad faith:




186
    See the decision in the case “Peter Frampton” http://arbiter.wipo.int/domains/decisions/html/2002/d2002-
0141.html
187
    This characteristic comes from the US Cybersquatting Act 1999, Pub L No. 106-133, § 3002 (a), 113 Stat.
1501, 1537, that provides a corresponding modification of lit. d § 43 Lanham Act.
                                         Thomas Hoeren-Internet Law                                       64
           (i) circumstances indicating that you have registered or you have acquired the domain
                name primarily for the purpose of selling, renting, or otherwise transferring the
                domain name registration to the complainant who is the owner of the trademark or
                service mark or to a competitor of that complainant, for valuable consideration in
                excess of your documented out-of-pocket costs directly related to the domain
                name; or


           (ii) you have registered the domain name in order to prevent the owner of the trade-
                mark or service mark from reflecting the mark in a corresponding domain name,
                provided that you have engaged in a pattern of such conduct; or


           (iii) you have registered the domain name primarily for the purpose of disrupting the
                business of a competitor; or


           (iv) by using the domain name, you have intentionally attempted to attract, for com-
                mercial gain, Internet users to your web site or other online location, by creating a
                likelihood of confusion with the complainant‘s mark as to the source, sponsorship,
                affiliation, or endorsement of your web site or location or of a product or service
                on your web site or location.”


This category of possible “bad faith”-cases is not closed (“in particular but without limita-
tion”). In time the area of WIPO has developed its own jurisprudence which has carved out
further cases of “bad faith”. But critics accuse the WIPO of assuming “bad faith” in favor of
the complainant too fast.188


EE 6723

Beside the UDRP for the area of .biz domains there is the “Start-Up Trademark Opposition
Policy” (STOP).189 STOP regulates legal disputes concerning biz-domains that were regis-
tered during the biz-start up-phase (25. June until 21. September 2001). Applicants must reg-
ister their complaint at the TLD-provider Neulevel and then they receive a ticket number. If
they do not, they can only take the UDRP-path. The STOP-process is in its procedural and
material characteristics similar to the UDRP guidelines. But STOP only defends against iden-


188
      see http://www.icannot.org and http://www.icannwatch.org.
189
      see also http://arbiter.wipo.int/domains/gtld/biz/stop/index.html
                                              Thomas Hoeren-Internet Law                          65
tical domains; other cases concerning danger of confusion are not included. Furthermore,
STOP-cases are decided by only one arbitrator. Infringements of registration conditions can
be redressed with the “Restrictions Dispute Resolution Policy” (RDRP).


With regard to the info-domain there was a Sunrise Challenge Policy (SCP), that could only
be enforced by the WIPO. The Sunrise Challenge Period ended 26. December 2001; the
WIPO does not accept new complaints anymore. The SCP is applied if a domain owner can-
not prove the registration of a trademark or if this occurred after 2. October 2000. The com-
plainant must prove that it owns a registered trademark.



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If a company wants to find out if its desired domain name is still free it can start a search via
the DENIC website (http://www.denic.de) for domain names which have already been regis-
tered, reserved or become active. If a name has already been registered you should look for
the address of the owner. Addresses of activated names can be found via the search service
“whois”.190 It is also worth using further search engines (e.g. “Alta Vista” and “Lycos”). But
it is questionable if the usage of data in Whois-databases is admissible according to data pro-
tection law. Everybody can do research in such databases and get a lot of personal informa-
tion, in particular about the domain owner. According to the Teledienstedatenschutzgesetz
(Tele-Services data protection law) relevant here, such a transfer of data is permissible only
with consent or because of a concrete purpose that the user has to explain. Therefore the use
of the database should depend on a legitimate interest.


The DENIC has already reacted to complaints concerning data protection. Since the end of
June 2000 information about .de-domain names for Germany has only been available via
DENIC. At this time the transfer of data to the European internet-organization RIPE in Am-
sterdam was stopped. Furthermore the reverse query about domain owners (Listing of all do-
main names of a certain person) and the alphabetical listing of all registered domain names
was shut down. Still possible is the search for the owner of a certain domain because this in-
formation is needed for lawsuits. For quite a while now the DENIC has no longer shown the
telephone numbers of registrants. The query for domain owners can be made on the internet
at http://www.denic.de/servlet/Whois.

190
      http://www.nic.de/servlet/Whois.
                                         Thomas Hoeren-Internet Law                           66
There is a different situation concerning com-domains where the NSI offers data with detailed
information on customers including names, addresses, telephone numbers and information
about the safety precautions of certain websites, if the site is actively used or if the site con-
tains an e-commerce-service.


Search on trademarks can be done at:
       • https://dpinfo.dpma de (German trademarks)
       • http://www.patent.bmwa.gv.at (Austria)
       • http://www.ige.ch (Switzerland)
       • http://oami.eu.int (Community trademark)


Title protection registers are also available online, for example:


       • title protection gazettes (“www.presse.de”)
       • software registers (“www.software-register.de”).



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a) Domain as Trademark

A domain can be the subject of particular trademark rights. Attention must be paid to the fact
that trademark protection not only arises via registration with the DPMA, but can also be
based on an original identification value or on validity through trade use. If somebody uses a
domain, this can be accompanied by a trademark protection because of validity through trade
use.191 However it must be noted that the mere availability of a homepage does not lead to a
worldwide validity through trade use. In fact the validity through trade use depends on if the
domain is used in a trademark sense and on the extent of the domain’s fame. In the absence of


191
      OLG München, 16. September 1999, CR 1999, 778 = ZUM 2000, 72
                                        Thomas Hoeren-Internet Law                             67
enough trade use it often happens that a domain which is older in priority must make way for
a trademark that is younger in priority. There is no identification value in the sign “@”192 and
the supplement “e” for “electronic”.193 Furthermore “interconnect”194 and “online”195 are not
protected.


b) Protection of Titles

A title protection for a domain is also a consideration, if it labels a product which is open to a
title protection. The title protection for an internet newspaper exists only when the product is
complete and not for advertisements e.g. a table of contents.196


c) Domain as a Name

The jurisdiction is now convinced that domain names despite the fact that they can be chosen
freely are under the protection of §12 BGB.197 The LG Frankfurt assumes (in its decision of
10.9.1997)198 that especially because of the free choice of a domain name e.g with any com-
bination of digits and/or letters, they are suitable for use as an identification with a naming
function where a company name is chosen - as it was in this case where the L.I.T Logistik-
Information-Transport Lager & Logistik GmbH wanted to use the domain lit.de. In the same
way the LG Bonn in its decision of 22.9.1997 put the domain name detag.de under the protec-
tion of § 12 BGB, because the combination of letters consisted of the first letters of the com-
pany’s name, the Deutsche Telekom AG.


d) Attachment of Domains

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In relation to the acceptance of domains as an assessable good the question concerning their
seizure in execution arises. Concerning this there are different opinions by several courts. The




192
    BpatG, court order of 8. April 2000, CR 2000, 841.
193
    LG München I, 30. August 2000, CR 2001, 48.
194
    OLG Karlsruhe, 16. July 2000 – 6 U 222/99 (unpublished)
195
    OLG Köln, 17. October 2000 – 6 U 209/99 (unpublished)
196
    OLG München, 11. January 2001, CR 2001, 406 – kuecheonline; similar Fezer, WRP 2000, 969, 973.
197
    OLG Köln, 6. July 2000, MMR 2001, 170 = CR 2000, 696 = K&R 2000, 514 (headnote).
198
    LG Frankfurt, 10.9.1997 – 1/6 O 261/97, NJW-RR, 974.
                                          Thomas Hoeren-Internet Law                                 68
LG München I199 rejected the possibility of a seizure as defined by § 857 ZPO. The LG Essen
on the other hand admitted the seizure.200 Irrespective of this dispute the attachment of claims
to connect of the domain owner against the DENIC eG with an attachment of a debt is ac-
cepted.201 But the realization of this debt is difficult, since a transfer is not possible because
the execution creditor lacks an interest in performance.


Besides this, measures against the insolvency of an access provider are important too. At pre-
sent a large number of insolvencies occur in this area (anders-hamburg.de, expressoweb.de,
bayreuth-web.de).
If a provider has to file for bankruptcy, the DENIC acts. A few weeks after the application for
insolvency almost every domain concerned is temporarily hosted by the DENIC and regis-
tered in their own name servers and entered in the Zone-c of the domain. In the case where the
Zone-c is already at the DENIC (recognizable at the HD4-RIPE in the Zone-c in the DENIC-
Whois), one just has to send the notice to the old provider and the KK-Fax to the DENIC.


In this regard the question of the valuation of domains arises. The most common formula is
the RICK-formula.202 4 facts are important:
      • The risk of encountering legal difficulties in using the domain = R
      • The image of the Domain = I
      • The possibilities of commercial use = C
      • The shortness of the domain = K (German “Kürze” means shortness)


The so-called Horatius-formula203 is more differentiated and uses many indicators, amongst
others
      • The visits
      • The registrations in search engines
      • The maintenance of the domain
      • The duration of existence.


199
     LG München I, court order of 12. February 2001, CR 2001, 342; left open in LG München I, court order of
28. June 2000, MMR 2000, 565 = K&R 2000, 563 = ZUM 2000, 875 = CR 2000, 620 with annotations by
Hanloser on p. 703.
200
     LG Essen, court order of 22. September 1999, MMR, 286 with annotations by Viefhues = CR 2000, 247.
Similar AG Lindau, court order of 17. April 2000 – M 192/00 (unpublished); LG Düsseldorf, judgment of 16.
March 2001, ZUM 2002, 155.
201
     Hanloser, Rechtspfleger 2000, 525, 527; the same, CR 2001, 344, 345; Welzel, MMR 2001, 131, 132.
202
     See http://www.rick-formel.de
203
    http://www.adresso.de/index.php?action=show&content=horatius-formel
                                          Thomas Hoeren-Internet Law                                     69
Even more differentiated are the criteria of the SCHARF-model which works with over 40
indicators.204


For the assessment of the value in dispute as defined by §12 [1] GKG the court takes into
consideration the economic value of the domain for the person entitled, where it especially
considers the expected number of visits and other indications for possible returns and market-
ing effects. For well-known companies there have been values in dispute of up to ¼
500.000.205




204
  http://www.bewertungsformel.de
205
   see judgment of the LG Düsseldorf of 17. September 1997 – 34 O 118/97 in the case cartronic.de; see also
Schmidt/Schröder, K&R 2002, 189seqq.
                                      Thomas Hoeren-Internet Law                                         70
†  7KH &RQWHQW ,QWHOOHFWXDO 3URSHUW\ /DZ

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The BGB is influenced by the primacy of production of goods corresponding to the economic
circumstances at the end of the 19th century. Its focus therefore lies on the purchase of goods
in the sense of § 90 BGB. These goods can be property; they can be sold, rented, processed
and reshaped. The services sector is underrepresented in the BGB in a legal sense. Despite
vehement protests in the Reichtstag (parliament) terms like employer-employee-relationship
and employee were explicitly not included when the BGB came into force. There are no dif-
ferentiations between independent, personal or economically dependent work. Instead there
are some short regulations on business and service management contracts.


The BGB is even less suitable for the assessment of information, the basic element of the
modern information society.206 As an immaterial good, information cannot be property. An
assessment of property is done by the BGH via the property of data carriers. But with regard
tothe decreasing importance of data carriers this approach is doubtful. The assessment via §
17 UWG is also getting more and more blurred, because in an information society there is no
clear dividing line between secret and non-secret knowledge.


In this situation intellectual property law comes forward. Copyright law in particular allows
a clear assessment of information rights as long as its selection or arrangement contains a per-
sonal-intellectual creation. This does not create an exclusive right of the information itself,
but with protection of the form the collections of information are protected as well. Copyright
law will play a key role in the information society. Its importance will at least equal the im-
portance of the BGB.



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206
    For more information see Druey, Information als Gegenstand des Rechts, Zürich/Baden-Baden 1995, especi-
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                                        Thomas Hoeren-Internet Law                                      71
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The creation of websites interferes extensively with copyrights. At present the content indus-
try uses works of third parties without any inhibitions. Music, text and photographs are digi-
talized and integrated in an online system without a thought being wasted on the legal admis-
                                  Thomas Hoeren-Internet Law                               72
sibility of this procedure. As presented below, this legal blindness can prove to be very dan-
gerous. Currently every producer faces the threat of civil and criminal sanctions if he or she
uses material of another person within their work.
Online providers have to fight their way through the jungle of intellectual property rights be-
fore being able to begin a project.207 The distinction between copyright law and patent law is
extremely important here. Copyright law protects artistic or scientific/technical achievements
which display a certain originality and creativity. The protection exists independent of regis-
tration, a copyright symbol or other formalities. The protection begins with the creation of the
work and ends 70 years after the death of the author. Besides copyright law there is patent law
which regulates the protection of innovative inventions. For protection by patent law registra-
tion at the German (or European) patent office is necessary. Even then protection will only
exist for 20 years after registration; after that period the invention will become free for general
use. Next to copyright and patent law there are various protection systems which will not be
mentioned in great detail here. These are as follows:
      • design and petty patent law
      • amendatory protection guaranteed by Art. 1 UWG
      • secrecy protection (Art. 17 UWG)
      • protection guaranteed by tort law (Art. 823 [1] BGB)
      • possibility of unlawful enrichment (Art. 812 [1] s.1, alt.1)(“Eingriffskondition”)


Copyright law is regulated in the Copyright Act (Urheberrechtsgesetz) of 1965, an act that
because of its age alone cannot make reference to the Internet. Therefore, newer regulations -
especially in international copyright law – must be consulted as well, i.e. the WCT, WPPRT
and the InfoSoc-directive of the EU.


WCT and WPPRT are two international treaties that were negotiated in December 1996
within the framework of the WIPO. They provide for an extensive right of reproduction and a
new “right of making available to the public” (see below). The WCT was enforced on 6th
March 2002, the WPPRT was enforced on 30th May 2002. The provisions of these agreements
are intended to be converted uniformly throughout the E.U. into national law through the Di-
rective on Copyright Law within the Information Society.208 In December 1997 the Commis-



207
    Concerning patent protection for business ideas see Markus Hössle, Patentierung von Geschäftsmethoden –
Aufregung umsonst? , in: Mitteilungen der deutschen Patentawnwälte 2000, 331.
208
    See also Hoeren, MMR 2000, 515.
                                         Thomas Hoeren-Internet Law                                      73
sion of the European Communities submitted a first “Proposal for a Directive of the European
Parliament and the WEU Council for Harmonizing Certain Aspects of Copyright Law and
related Protective Rights within the Information Society”.209 Early in 1999 this draft was dis-
cussed in the Parliament in great detail and a multitude of proposals for amendment were
made.210 On 21 May 1999 the Commission published its changed proposal which integrated
several proposals of the Parliament but essentially accorded with the initial text.211 After sev-
eral further interim drafts the Council determined a “common standpoint”212 on 28 September
2000 which after some minor changes 213 was accepted by the Parliament. The member states’
governments accepted the text on 9th April 2001. On 22nd June 2001 it was published in the
Official Journal of the EU, and was enforced the same day.214 The term of implementation
runs out on 21st July 2003.


The directive is aimed at the harmonization of copyright standards and related protective
rights within the information society. It deals with the central exclusive rights of the author,
the right of reproduction, the right of distribution and the right of public communication. The
main emphasis is on the right of reproduction which has the greatest significance in the digital
era. It also aims for harmonization of this with the WIPO agreements of 1996.



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209
    Draft of 10 December 1997 – COM (97) 628 final, Abl. C 108 from 7 April 1998, 6. See Dietz, MMR 1998,
438; Flechsig, CR 1998, 225; Haller, Medien und Recht 1998, 61; Lewinski, MMR 1998, 115; Reinbothe, ZUM
1998, 429.
210
    The unpublished last report of the Parliament is dated 10 February 1999 (file number A4-0026/99).
211
    Draft of 21 May 1999 – COM (99) 250 final, Abl. C 150/171 from 28 May 1999. The text is available on the
Internet under http://europa.eu.int/comm/dg15/de/intprop/intprop/copy2.htm.
212
    Common Standpoint (EG) Nr. 48/2000, Abl. C 3441/1 of 1 December 2000.
213
    See the legislative resolution of the Parliament of January 2001, A%-0043/2001.
214
     ABl. L 167 of 22.06.2001, p. 10 seq.; http://europa.eu.int/eur-lex/de/oj/2001/l_16720010622de.html or
http://europa.eu.int/eur-lex/en/oj/2001/l_16720010622de.html (english Version).

                                       Thomas Hoeren-Internet Law                                        74
The information industry is an internationally oriented business sector. Information is by its
very nature ubiquitous, that is to say, widespread. It can be reproduced without high expendi-
ture and it can be transferred within seconds – for example via international data networks.
Phenomena like transmission via satellite or the Internet in particular show that national bor-
ders are no longer of special significance. Thus, the question arises if and when German copy-
right law is applicable to information products.


The applicable law can (ostensibly) be contractually regulated by a “choice of law clause”.
The parties agree on the application of certain copyright rules to their legal relations. Accord-
ing to §§ 27, 28 EGBGB a contract is primarily subject to the law chosen by the parties.215 If
the parties have reached an agreement concerning the applicable law this will take priority.
Here even the assumption of an implied choice of law should be considered. In particular,
agreement on a jurisdictional venue should be a (refutable) matter of circumstantial evidence
indicating the choice of the effective substantive law in force where the court is located.216
German copyright law includes compulsory regulations in favor of the author that cannot be
removed by a choice of law clause.217 These include regulations concerning inherent rights of
the author, the principle that exploitation rights are only assigned for a particular purpose, the
invalidity of granting rights of utilization according to § 31 [4] UrhG, the author’s participa-
tion in an extraordinarily successful work (§ 36 UrhG) as well as the right of recall for rea-
sons of changed conviction (§ 41 UrhG). Furthermore, a choice of law clause does not apply
to the act of transferring, which is the legal assessment of the assignment of utilization rights
and the claims of a license holder.218 Even though it is possible for parties to choose the law
applicable to their contractual relations there are a lot of fields which this choice of law will
not apply to. Moreover, it is important to consider that the chosen law will only be decisive in
terms of the contractual legal relations. Therefore, the chosen contract law statute will not
apply to those legal questions frequently arising in tort law, instead these will be assessed
according to the relevant tort law statute. Although it is controversial whether the lex loci
delicti commissi according to § 40 [1] EGBGB added in 1999 is directly applicable to in-
fringements of copyright, or if the escape clause pursuant to § 41 EGBGB is applicable219, the


215
    See also concerning contractual conflicts of laws the remarks under § 9 I.
216
    Said so by the German Federal Supreme Court, JZ 1961, 261; WM 1969, 1140, 1141; the Higher Regional
Court in Hamburg, VersR 1982, 236, the Higher Regional Court in Frankfurt, RIW 1983, 785
217
    See also Hoeren/Thum, in: Dittrich (Ed.), Beiträge zum Urheberrecht V, Wien 1997, 78.
218
    See also the German Federal Supreme Court, MMR 1998, 35 =NJW 1998, 1395 = GRUR Int. 1998, 427 –
gambling house affair with annotations by Schricker. On this, decided similary by the Higher Regional Court in
Munich, judgment from 10th January 2002 – 6 U 3331/94, MMR 2002, 312.
219
    Compare Rolf Sack, WRP 2000, 269, 271.
                                           Thomas Hoeren-Internet Law                                      75
principle of the country of protection will be valid according to the general concurrence of
opinion concerning intellectual property rights.220 That means the law of the state in which
protection is applied for is applicable, the so-called lex loci protectionis.221 In contrast to the
infringement of property ownership rights, in the case of an infringement of intellectual prop-
erty rights the preliminary questions of conflict of laws also comply with the lex loci protec-
tionis.222 This includes the development of copyright law223, the first ownership of a copyright
and the question of whether powers can be assigned and if so, which ones.224 The validity of
the principle of country of protection causes problems for people who make use of their inter-
net rights. Those users who want to behave legally have to adjust their online presence in all
those states where their service can be called up, because any of these states might potentially
be a country of protection.225 However, this renders having an internet presence a legally im-
possible undertaking, because all of the known copyright regulations worldwide (technically
speaking any of the worldwide regulations at all) need to be taken into consideration if you
want to ensure the legality of your presence. A change in the contact point of conflict of law
regulations is not within view at the moment. The regulatory system of the “Satellite-
Directive 93/83/EWG”226 does lead to a reliance on the country of origin rule227; but it has
been restricted to the field of satellite transmission. In the (amended) proposal for a directive
on legal questions of electronic commerce a transfer of the principles of satellite law to the
internet was rejected.228 Thus, intellectual property rights have been widely excluded from the
scope of the country of origin rule embodied in Art. 3 [2] of the draft.229 However, this deci-
sion is open to doubt. The harmonization of copyright law has reached an extent that would
justify the application of the country of origin rule. The differences extend at most to the field
of inherent rights of the author (which are not included in the jurisdiction of European or-
gans). But even here there exists a minimum of EU-standardized protection rights by virtue of


220
    RGZ 129, 385, 388; BGHZ 118, 394, 397 f.; BGHZ 126, 252,255; BGHZ 136, 380, 385, 386; Staudinger/v.
Hoffmann (1998), Art. 38 EGBGB, no. 574.
221
    Sack, WRP 2000, 269, 270.
222
    Diverging opinion for a long time Schack, currently in MMR 2000, 59, 63 f.
223
    Like this also BGHZ 49, 331, 334, 335; BGH, IPRax 1983, 178; OLG Frankfurt, BB 1983, 1745; OLG
München, GRUR Int. 1990, 75.
224
    BGH, 2 Oktober 1997 – I ZR 88/95, MMR 1998, 35 – Spielbankaffaire with annotation by Schricker. De-
cided similarly by the Appellate Court in Hamburg, judgment of 4th September 2001, NJW 2002, 623
225
    Concerning the related problems of liability see in general Decker, MMR 1999, 7 and Waldenberger, ZUM
1997, 176.
226
    27 September 1993, Abl. EG Nr. L 248, p. 5.
227
    Actually, only on the level subject rules has it been uniformly defined that the place of infringement is within
the country of transmission, compare Katzenberger in Schricker, vor §§ 120 ff. UrhG, no. 142.
228
    See the changed proposal of 1 September 1999. The preliminary draft is from 18 November 1998 – Doc.
COM (98) 586 final, Abl. C 30 from 5 February 1999, p. 4. See also Hoeren, MMR 1999, 192; Maennel, MMR
1999, 187; Waldenberger, EuZW 1999, 296.
229
    Hoeren, MMR 1999, 192, 195, 196.
                                            Thomas Hoeren-Internet Law                                            76
international copyright agreements especially the revised convention of Berne. Newer re-
search works show that even in Great Britain a minimum of protection has been established
within the field of personal rights of the author. Hence, it seems justified to consider a regula-
tory system like that which exists for the similar case of satellite transmission.230 However
even then the problem with third-party states would not be solved. In relation to Non-
European countries those exercising their rights would continue to be confronted with the
circumstance that their actions potentially have to comply with all the legal systems of the
world.


Besides this, the situation might have been changed by the World Copyright Treaty (WCT)
which was passed at the WIPO-level in December 1996.231 Art. 8 of the treaty has established
an exclusive right of “making available to the public” within an extensive right of public
communication. Within the World Performers and Producers Rights Treaty (WPPT) the right
of public communication is regulated separately from the new right of “making available to
the public” (Art. 10, 14 and 15 WPPT). The legal nature of this right is unclear. It is not clear
to what extent this new online-right can be seen as a right independent from other rights in
relation to the general right of public reproduction. The consequences of both WIPO-treaties
concerning conflicts of laws have hardly been discussed yet. The procedure of “making avail-
able to the public” technically takes place at the server location. In this the new law could
involve an earlier placement of the point of entry for conflict of law provisions and in this
way a content provider would only have to be aware of the law of the location of the server.
But you could also refer to the fact that this law has been set in place within the WCT and
WPPT in that “members of the public may access these works from a place and at a time in-
dividually chosen by them”. Or you could also take the view that the individual call-up by a
user is part of the process of making available. This would be the prevailing opinion. The
European Commission especially construes Art. 8 WCT in the Draft of the Multimedia Direc-
tive in this way. However the commission merely takes up the WIPO formulation within Art.
3 of the draft without discussing its significance to the law of conflicts in detail. But then as
an introduction it does deal with the question of international private law and emphasizes that
application of the principle of country of protection results in the consequence that “several
national laws may apply in general”232. Besides this the commission rejects any application to


230
    At the level of subject matters the place of infringement could be defined as being located in the country of
injection.
231
    Compare Vinje, EIPR 5 (1997), 230.
232
    Chapter 2 II 8, p.11.
                                           Thomas Hoeren-Internet Law                                          77
the server location within the same context as inappropriate. It would lead “to a delocalization
of services being provided from the country with the lowest level of protection for copyright
and related rights“. Hence, further discussion is necessary - especially in terms of the imple-
mentation of the directive – concerning the question as to what extent the new “making-
available-right” has consequences for conflicts of law.



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If German copyright law is applicable to the law of conflicts the next logical question is
which works are capable of being protected under copyright law.



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According to § 1 UrhG protection extends to works of literature, science and art. To that ex-
tent the catalogue is complete; works which do not come under these three categories will not
be protected by the UrhG. This raises the question of whether changes to the UrhG are needed
with respect to new kinds of work such as multimedia products, for example. However, no
discussion on this is necessary. By means of a broad interpretation of the terms “literature,
science and art” new forms of creativity have been successfully integrated into the UrhG. For
example software is seen as a work of literature and therefore is explicitly included in § 2 [1]
no.1 UrhG. More difficult is the qualification of multimedia works. The problem is that the
term “multimedia” is too vague to serve as the point of contact for categorization under copy-
right law. Hence every case has to be individually decided when determining whether a prod-
uct is a work in the sense of the UrhG, especially a work similar to cinematographic works, a
work of fine arts or a literary work. The works named in § 2 UrhG are included under the pro-
tection of § 1 UrhG. § 2 [1] UrhG contains a catalogue of examples of protected works which
is not final but open for future technical developments. According to this, literary works,
works of music, works of fine arts as well as photographic and cinematographic works are
protected as works of literature, science and fine arts. Software belongs to literary works (§ 2
[1] no.1 UrhG). Fonts also fall under the software protection.233
Besides this, within the multimedia context photos, texts, graphics and music have to be
named as the most important kinds of work. Meanwhile new Internet-specific kinds of work
have come along in addition to the classic works. In particular, reference should be made to



                                   Thomas Hoeren-Internet Law                                78
the field of virtual characters in the field of television.234 Such computer animations are
mostly seen as works of fine art and are consequently protected by § 2 [1] no. 4 UrhG; this
protection also extends to a character’s electronic movement grid.



 ,GHD ± )RUP

It should be noted however that the UrhG only protects the form of a work, meaning its com-
position, structure and presentation. The idea that underlies the work is not protected. The
more definite the adoption of certain creative elements, the closer you come to a copyright
infringement. It is almost impossible to draw boundaries between idea and form. Here you
have to understand that differentiation cannot be made ontologically but instead will be based
on a social decision in favor of freedom of use.


Advertising methods and academic theories as well as other information are examples of
ideas regarded as public property. In the field of television the distinction between idea and
form is central where show formats are in question.235 The idea for a new game show is just
as unprotected236 as a reference to new subjects for reporting. In the software field § 69 a [2]
sentence 2 UrhG states that the basic ideas and principles of an element of a computer pro-
gram as well as the basic principles underlying the interfaces are not protected. This means
the problem-solving processes and the mathematical principles of a computer program are
essentially excluded from protection by copyright law, although making the distinction be-
tween this and a concrete formulation of the principle (which is protected) is extremely diffi-
cult.
While scientific and technical content is subject to a special need to maintain freedom of use,
literary works require more a protection of content. Hence the judiciary has affirmed a copy-
right law protection for novels not only of the text itself but also for the components of the
work reflecting the personal style of the author, based on his or her creative fantasy - like for
example the plot direction and the characteristics and roles of the characters involved.237




233
    LG Köln, 12 January 2000, MMR 2000, 492 seq.
234
    Compare Schulze, ZUM 1997, 77 as well as (more general) Rehbinder, Zum Urheberrechtsschutz für fiktive
Figuren, insbesondere für die Träger von Film- und Fernsehserien, Baden-Baden 1988.
235
    See Litten, MMR 1998, 412.
236
    Compare OLG München, ZUM 1999, 244.
237
    BGH, ZUM 1999, 644 (647); OLG München, ZUM 1999, 149 (151).
                                         Thomas Hoeren-Internet Law                                     79
For those affected, the free exploitation of ideas is an insoluble problem. There are plenty of
industries where creativity and success is based on ideas alone. For example much effort is
required in the advertising industry to develop an idea for an advertising strategy. In the fast-
moving television industry ideas for new program concepts have enormous importance. In all
these industries the originators of the ideas are unprotected. They are unable to prevent the
exploitation of their ideas. Even a registration is of no help because it does not change the fact
that ideas cannot be protected. Industrial property laws (especially the PatentG and the Ge-
brauchsmusterG) only offer protection of technical inventions if very limited conditions are
met. Even the anti-competition statute (UWG) essentially does not protect against the take-
over of ideas.



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According to § 2 [2] UrhG “works” in the sense of the law are only those which can be seen
as personal intellectual creations. With regard to “creation” the statute refers to the height of
creation which has to be proved for each work in every individual case. Not every work is
protected, rather only those works whose form contains a sufficient measure of creativity. In
this the relationship between public freedom and intellectual property rights previously men-
tioned should also be considered. Copyright law is an exception to the principle of freedom of
information. Setting the standard for capability of protection too low would distort the balance
between rule and exception.
Instead of the general freedom of ideas and free access to information, an exclusive right of
the creator lasting up to 70 years after death is normal. The long duration of the protection is a
reason in itself to regularly demand a special standard of creation before affirming copy-
rightability.


The judiciary is therefore correct to distinguish between works of fine art and applied art. The
fine arts belong to the traditionally protected goods of copyright law. Here it is therefore suf-
ficient that the selection and arrangement of the material has individual characteristic features.
In this regard the Supreme Court of the German Reich established the doctrine of the “kleinen
Münze”238 (so-called small coin) according to which minor characteristic features in the field
of the fine arts can be enough to justify protection. However, it is doubtful whether nowadays
that generosity would still be shared, which the Supreme Court of the German Reich showed

238
      RGSt 39, 282, 283 – Theaterzettel; RGZ 81, 120, 122 – Kochrezepte; RGZ 116, 292, 294 – Adressbuch.
                                           Thomas Hoeren-Internet Law                                      80
in finding such a characteristic feature in a telephone book. The judgment of the Supreme
Court of the German Reich could have been appropriate in view of the fact that the duration
of protection according to the copyright law of 1870 was merely thirty years post mortem
auctoris. At any rate, the extension of the time-limits on protection up to fifty years in the year
1934 and up to seventy years in 1965, as well as the gradual extension of protection to indus-
trial-technical works have to lead to a change in the criteria for the standard of creation. In
any case, a raised standard of creation is necessary for works of applied art including purpose-
based texts. As Erdmann239 rightly emphasized, the requirements for the standard of creation
can vary for different kinds of work, and can be set higher for art without any purpose, than
for industrial works designed for actual use. For this very reason the BGH in the past always
insisted on the prerequisite that the form of such works clearly exceeded the average crea-
tion.240 The individual characteristic features must indicate above average ability. The stan-
dard of protection is fixed well beyond average and trade skills.241 This is necessary if only
because otherwise the division between copyright law and the Registered Designs Act which
is also applicable to applied works of art would be invalidated. Besides, a lowering of the
standard of creation in this field would be dangerous,242 because such a generous precedent
would create the risk of an unlimited extension of copyright protection beyond the key areas
of literature, music and art. Even with minimal creative input some form of a monopoly pro-
tection would have to be granted up to 70 years after the death of the creator.243


However this traditional view has been criticized in parts. The criterion of standard of creation
is seen as “specifically German law” and the tendency toward European harmonization de-
mands a move away from it.244 But this opinion fails to recognize that within other member
states of the European Union also, a very high standard of creation is seen as a basic require-
ment for protection under copyright law, this is especially the case for those subscribing to the




239
    Festschrift von Gamm 1990, 389, 401.
240
    BGH, GRUR 1986, 739, 740 f. – Anwaltsschriftsatz; see also BGH, GRUR 1972, 38, 39 – Vasenleuchter;
BGHZ 94, 276, 286 – Inkasso-Programm; BGH, GRUR 1995, 581 f. – Silberdistel.
241
    The Austrian adjudication has decided differently, because they only demand individual, non-routine ele-
ments, compare the Austrian Supreme Court, decision of 24th April 2001, MMR 2002, 42 – telering.at.
242
    See Schraube, UFITA 61 (1971), 127, 141; Dietz, a.a.O., Rdnr. 68 and 82; Thoms, Der urheberrechtliche
Schutz der kleinen Münze, München 1980, 260 with further references.
243
    But it has to be considered that next to copyright law trade mark protection is possible. Advertising slogans
can, therefore, be registered as an EU trade mark, if the average informed customer identifies the origin with the
slogan. The ECJ decided that the slogan “The Principal of Comfort” is distinguishable for products from class 20
(home furniture), ECJ, judgment of 11th December 2001, T 138/00.
244
    Schricker, GRUR 1996, 815, 818; similar Schricker, Festschrift Kreile, 715 and the same person, GRUR
1991, Band II, 1095, 1102; Nordemann/Heise, ZUM 2001, 128 ff.
                                           Thomas Hoeren-Internet Law                                           81
continental-European tradition of the “Droit d´auteur”.245 Even within the US-American ju-
risdiction a tendency to apply strict criteria to the granting of copyrights has become appar-
ent.246 Referring to European directives especially the Software Protection or Database Direc-
tive does not get one any further. Certainly the conditions for granting protection to computer
programs have been reduced in comparison with the former legal situation through § 69 a [3]
s. 2 UrhG which forbids the use of qualitative criteria in the test for the copyrightability of
software. But this does not mean that every ordinary, everyday or trivial program is protected
by copyright law. Rather the jurisdiction will continue to refer to reduced yet still value-based
quality criteria, because without them the concept of “creation” could never be meaningful.
Leaving aside the question of how the protectability of software or databases is determined,
both regulatory complexes are special subject matters. §§ 69a UrhG only extends to all forms
of computer program according to § 69a [1] UrhG.247 The European Database Directive
merely regulates the protection of information collections. In both cases full protection under
copyright law including author’s personal rights and extending up to 70 years after death will
be granted, even though the creation standard here corresponds more to the standards of in-
dustrial property and copyright protection law.



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Online presentations cause difficulties insofar as at times not complete literary, photographic
or cinematographic works are inserted, but rather just small parts of the works concerned are
used. So with music sometimes only the “sound” will be copied; and the melody will not be
adopted.248 However drum beats, bass lines or keyboard settings are not protected by copy-


245
    Compare Dietz, Das Urheberrecht in der europäischen Gemeinschaft, Baden-Baden 1978, Rdnr. 78; Colom-
bet, Major principles of copyright and neighbouring rights in the world, Paris 1987, 11; Cerina, IIC 1993, 579,
582.
246
    See the decision of the Supreme Court of the United States No. 89.1909 of 27 March 1991 in the matter of
Feist Publications Inc. v. Rural Telephone Service Company, Sup. Ct. 111 (1991), 1282 = GRUR Int. 1991, 933.
247
    The web-site as such is not included, even if it is in HTML code, see the Austrian Supreme Court, decision of
10th July 2001, GRUR Int. 2002, 452. Disagreeing Cichon, ZUM 1998, 897, 899, Lehmann/ von Tucher, CR
1999, 700, 703; Schack, MMR 2001, 9, 12f.
248
    Compare Allen, Entertainment & Sports Law Review 9 (1992), 179, 181; Keyt, CalLR 76 (1988), 421, 427;
McGraw, High Technology LJ 4 (1989), 147, 148. Concerning the German law see Münker, Urheberrechtliche
                                           Thomas Hoeren-Internet Law                                         82
right law according to general opinion249 because they do not carry the melody but are instead
merely abstract ideas without a concrete form. In this respect the distinction between idea and
form is getting its revenge, by leading to the fact that only the melody is viewed as protectable
under copyright law. Here some rethinking has to be done which would also see the “sound”
as capable of being protected by copyright law.250



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As well as the rights of the author there are also laws of industrial property and copyright pro-
tection (§§ 70 – 87e UrhG). According to these, performances are also protected by copyright
law if they do not contain personal-intellectual creations. However, the protection for works
capable of being protected by copyright law is limited in extent and duration.


Five kinds of industrial property and copyright protection rights are of special importance:


    • the protection of the photographer (§ 72 UrhG),
    • the protection of performing artists (§§ 73 - 84 UrhG),
    • the protection of phonogram producers (§§ 85, 86 UrhG),
    • the protection of producers of films (§§ 88 - 94 UrhG),
    • the sui generis protection of database produces (§§ 87a - 87e UrhG).


All protected persons named above receive protection for their performances under special
laws anchored in competition law. A photographer’s performance for example is the produc-
tion of photographs which show an originality below the level of personal-intellectual crea-
tion. Artists receive protection of the way in which they perform their work or take part in a
performance or a rendering (§ 73 UrhG). A producer of phonograms (e.g. compact discs, cas-
settes) produces the technical-economic performance of recording and marketing works on
such devices (§ 85 UrhG). The producer of films transfers films onto reels (§§ 94, 95 UrhG).




Zustimmungserfordernisse beim Digital Sampling, Frankfurt 1995; Bortloff, ZUM 1993, 476; Lewinski, Ver-
wandte Schutzrechte, in: Schricker (Ed.) Urheberrecht auf dem Weg zur Informationsgesellschaft, Baden-Baden
1997, 231.
249
    Like this Wolpert, UFITA 50 (1967), 769, 770.
250
    See the references in Bindhardt, Der Schutz von in der Popularmusik verwendeten elektronisch erzeugten
Einzelsounds nach dem Urheberrechtsgesetz und dem Gesetz gegen den unlauteren Wettbewerb, Frankfurt 1998,
102; Bortloff, ZUM 1993, 477; Hoeren, GRUR 1989, 11, 13; Müller, ZUM 1999, 555.
                                         Thomas Hoeren-Internet Law                                      83
A database producer is protected on the basis of the investment-intensive procurement, ex-
amination and presentation of the database content.
However, this system of protection under industrial property and copyright laws raises a lot of
unanswered questions connected to the contradictions and gaps within the present copyright
law system.



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An example of a problematic area is the position of performing artists, particularly in the case
of “borrowing” sounds from studio musicians.251 According to § 75 [2] UrhG image and
sound carriers which contain performances of performing artists may only be reproduced with
the artist’s consent. According to general opinion this right is also due to studio musicians
even if they do not directly perform a work (compare § 73 UrhG).252 It is still unclear today if
studio musicians can defend themselves against sound sampling and the integration of “their”
sounds into a multimedia product. According to dominant opinion, protection can only be
taken into consideration if the work shows a minimum of individuality.253 This results from
the fact that the law of industrial property and copyright protection is a legal institute heavily
influenced by competition law. Therefore, it is only that part of the artist’s work which ex-
presses his or her individual artistic creativity that is protected by Art. 75 [2] UrhG. But this
artistic creativity will not usually be in question where merely “sound” is adopted from a mu-
sician. This is because samples are mostly only fractions of a second of a certain sound; like a
tiny segment of a percussion passage or drum solo. Even where an E-guitarist plays several
chords in the studio and these chords are later sampled by a third party without consent, gen-
erally an individual performance of the guitarist has not been reproduced. Instead this is a
case of random noises which in and of themselves do not express the individual creativity of
the performer, but are rather sounds which any other artist could have produced just as easily.
Samples like these therefore belong to the “public domain” which means material which is
freely accessible with respect to copyright law; their use does not affect the rights of perform-
ing artists. Accordingly, complete sound libraries are sold as “public domain” without their
origin being important in terms of industrial property and copyright protection laws.

251
  In general: Müller, ZUM 1999, p. 555-560.
252
   Schricker/Krüger, Urheberrecht, 2. Volume. München 1999, § 73 Rdnr. 16; Gentz, GRUR 1974, p. 328, 330;
Schack, Urheber- und Urhebervertragsrecht, Tübingen 1997, margin note 589. Partially § 73 is applied analo-
gously; compare Dünnwald, UFITA 52 (1969), p. 49, 63, 64.; the same person, UFITA 65 (1972), p. 99, 106.



                                       Thomas Hoeren-Internet Law                                       84
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There are also difficulties surrounding the legal position of phonogram producers with respect
to new exploitation technologies. If they transfer music protected by copyright law onto pho-
nogram devices and without their consent these are then copied partially or completely, they
can definitely turn to the right of industrial property and copyright protection under § 85 [1]
UrhG. It is disputed whether a production company can defend itself against sound plagiarism
for example, even though sounds as such are not protected by copyright law.254 Concerning
this question Hertin255 and Schorn256 are of the opinion that phonogram producers can defend
themselves against excerpt-based utilization of their devices and hence also against the adop-
tion of single parts of melodies (licks), even though these melody parts are not capable of be-
ing protected under copyright law. The Hamburg Higher Regional Court257 rejected this legal
theory: The phonogram producer could not have more far-reaching rights than the author. If a
sound was not capable of being protected neither the author nor the record company could
take action against the unauthorized exploitation of these sounds.258
The situation is also bad for music producers dealing with Digital Audio Broadcastings
(DAB). Though the producers have their own right of industrial property and copyright pro-
tection, this merely includes the control of reproduction and distribution of phonograms pro-
duced by them, § 85 [1] UrhG. In the broadcast of a professional artist’s performance from a
phonogram the producer only has a right to participation as against the professional artist ac-
cording to § 86 UrhG, and this will be exercised by a performing rights society. As a result,
the producer has no way to prevent the broadcast of such a recorded performance as far as
DAB is concerned. Digital broadcasting in particular leads to the situation where a user can
produce digital copies that cannot be qualitatively distinguished from the original. In this way
the phonogram market could be gradually replaced by content distribution via digital broad-
casting. However, it is possible for phonogram producers to control DAB indirectly: They can




253
    Different Möhring/Nicolini, § 73 ann. 2: „Es ist dabei nicht notwendig, dass der Vortrag oder die Aufführung
des Werkes oder die künstlerische Mitwirkung bei ihnen einen bestimmten Grad künstlerischer Reife erlangt hat;
(...).“
254
    Compare Schack, Urheber- und Urhebervertragsrecht, Tübingen 1997, Rdnr. 624 and 190.
255
    GRUR 1989, p. 578, 579 and GRUR 1991, p. 722, 730/731.
256
    GRUR 1989, p. 579/580.
257
    ZUM 1991, 545 – Rolling Stones; compare also Hertin, GRUR 1991, p. 722, 730/731.
258
    See also: Hoeren, GRUR 1989, p. 580 f.
                                          Thomas Hoeren-Internet Law                                          85
defend themselves against the digitalization of the performances fixed on their sound carriers
for broadcasting purposes, because digitalization includes reproduction requiring approval.259
Similar problems arise concerning the action of making available music files in MP 3 format
via the Internet260 which, due to the popularity of the MP 3 standard, could result in much
more serious consequences for the phonogram industry. Through these forms of public avail-
ability it is possible for every user to construct a digital copy of the files of the provider261 so
that they will no longer have much of an interest in obtaining the relevant phonogram. Here
too, producers have no exclusive legal status which would enable them to prevent the act of
making available on the Internet music files constructed from copies of their phonograms. On
the other hand, as with digital broadcasting, they are able to prevent all procedures of repro-
duction (digitalization and server upload) which are necessary for the act of making available
(§ 85 [1] s.1 UrhG) and therefore can also take action against providers of unauthorized MP 3
files under current law.
The legal position of the phonogram producer in relation to the new exploitation technologies
will soon be greatly strengthened at the European level. In particular the amended proposal
for a directive concerning the harmonization of copyright law and related protective rights
within the information society262 in Art. 3 [2] (b) provides for a right of public communica-
tion, even for phonogram producers, which includes the act of making available on the Inter-
net.



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259
    Like this the Austrian Supreme Court of Justice in its decision of 26 January 1999, MMR 1999, p. 352 –
Radio Melody III with annotation by Haller.
260
    See generally: Cichon, K&R 1999, p. 547-553.
261
    With special software it is also possible to burn the compressed files onto a blank CD or to transfer them to
the memory of a portable MP 3 player.
262
    Proposal of 21 May 1999, COM (1999) 250 final.
                                           Thomas Hoeren-Internet Law                                         86
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a) Preliminary considerations: database protection under copyright law

Websites are often protected as database works (§ 4 [2] UrhG). According to § 4 [1] UrhG
collections of works and contributions which are personal-intellectual creations by selection
or arrangement are protected like independent works irrespective of copyright law.263 A
multi-media database can be protected in this way if
      • contributions are collected (including different kinds of works) and
      • the selection or arrangement of the contributions presents a personal-intellectual crea-
         tion (if the standard of creation is not met however a protection as a scientific work
         under § 70 can still be taken into consideration).


The first feature does not cause difficulties: Within a website different excerpts from music or
film works and texts can be connected with each other. The feature of a personal-intellectual
creation causes the most difficulties with subsumption. The judiciary solves this problem by
examining whether the material present was chosen according to independent criteria or col-
lected and organized according to individual factors.264 A purely schematic or routine choice




263
    Compare concerning the protection of databases by copyright law also Erdmann, CR 1986, 249, 253; Hacke-
mann, ZUM 1987, pp. 269; Hillig, ZUM 1992, 325, pp. 326; Katzenberger, GRUR 1990, pp. 94; Raczin-
ski/Rademacher, GRUR 1989, pp. 324; Ulmer, DVR 1976, pp. 87.
264
    BGH, GRUR 1982, 37, 39 – WK-Dokumentation; OLG Düsseldorf, Schulze OLGZ 246, 4; OLG Frankfurt,
GRUR 1986, 242 – Gesetzessammlung.
                                        Thomas Hoeren-Internet Law                                       87
or arrangement is not capable of being protected.265 There must be individual structural char-
acteristics which are not dictated by the nature of the facts themselves.266


b) The sui-generis-component

Of central importance267 are §§87 a – 87 e UrhG in which the sui-generis-law is embedded,
and which were inserted into the Urhebergesetz as a result of the EU-Database Directive.268
Database producers are now protected. This regulation is the only one like this in the world.
Producers are not only natural persons who have procured or checked the elements of the da-
tabase but also those persons who have made investments in the database. For this reason ac-
cording to the legal definition of § 87a [1] s. 1 UrhG every collection of works, data or other
independent elements which are systematically or methodically arranged and are accessible
with the help of electronic means or in any other way, fall under the protection if their provi-
sion, examination or presentation requires an investment of a considerable or extensive kind.
Extensive collections of hyperlinks269, collections of small ads270 accessible online and most
compilations of information on a website271 can fall under this classification. The protection
of databases is also applicable to the print media, like the “List of Presses”272 or a state an-
nouncement gazette.273 Excerpts from such databases with the help of Meta search engines
infringe the author’s right of reproduction.


Because of its high relevance in practice the sui generis protection plays a significant role in
the piracy of telephone subscriber directories. The judiciary has constantly refused copyright
protection for these data collections, especially within the discussions concerning D-Info




265
    BGH, GRUR 1954, 129, 130 – Besitz der Erde.
266
    LG Düsseldorf Schulze LGZ 104, 5.
267
    See Raue/Bensinger, MMR 1998, 507.
268
    Directive 96/9/EG from 11 March 1996, Abl. Nr. L 77 of 27 March 1996, 20 = EWS 1996, 199. See also
Flechsig, ZUM 1997, 577; Jens L. Gaster, ZUM 1995, 740, 742; the same person, CR 1997, 669 and 717; the
same person in: Hoeren/Sieber (ed.), Handbuch Multimediarecht, München 1999, Teil 7.8; the same person,
“Der Rechtsschutz von Datenbanken“, Köln 1999; Wiebe, CR 1996, 198, pp. 201.
269
    LG Köln, NJW CoR 1999, 248 (guiding principles) = CR 1999, 400, District Court Rostock, judgment of 20th
February 2001 – 49 C 429/99 (will be published soon in MMR), see also Schack, MMR 2001, 9 ff.
270
    LG Berlin, AfP 1998, 649 = MMR 2000, 120 (which under the application of the new protection law has
forbidden the provider of a Meta search engine which searched the different online supplies systematically to
make the results accessible to his customers per e-mail); LG Köln, AfP 1999, 95, 96; see also Schmidt/Stolz,
AfP 1999, 146.
271
    See also the decision of the Court of Appeal Helsinki, MMR 1999, 93; as well as Köhler, ZUM 1999, 548-
555.
272
    OLG Köln 1. September 2000 – 6 U 43/00.
273
    OLG Dresden, 18. July 2000, ZUM 2001, 595.
                                          Thomas Hoeren-Internet Law                                      88
2.0274 – and instead affirmed a supplementary protection under § 1 UWG for the most part. At
this point a protection as a database according to §§ 87a seqq UrhG can also be taken into
consideration.275 However, it is not enough if someone collects data for an internet yellow
pages from sources which are available to the public and just puts them together with the
computer.276 From the Cologne Local Court’s point of view, calling up the search engine of
German Rail’s online information, starting to search for information, and the following oral
or telephonic presentation of the search results are considered to be a continued and system-
atic circulation or a public reproduction of parts of German Rail’s online information data-
base.277


Unclear is the protection of official compilations of statutes. The Munich Higher Regional
Court in its decision of 26 September 1996278 expressly rejected such a protection: Such a
compilation would at most be a series of texts which could not be protected by copyright law
in respect of the individual paragraph headings created in an editorial process. A protection
under competition law also could not be considered because the individual characteristic fea-
ture was missing. However, in this case a protection under § 87a UrhG can be taken into con-
sideration because the provision of extensive compilations (as in the case of the “Schön-
felder”) is generally connected with a considerable investment by the publisher.279
It is true that an exception provision leaving official databases unprotected cannot be found in
§§ 87a seqq. UrhG. However, in this respect the BGH seems to want to apply § 5 UrhG (field
exception from copyright protection for official works) to work products – and therefore also
to databases – which are protected by copyright law.280 However, it remains possible to make
use of a sui generis protection for a database produced by an investment intensive arrange-
ment of official works, documents or other materials (e.g. official compilations of laws, see
above).




274
    OLG Karlsruhe, CR 1997, 149; LG Hamburg, CR 1997, 21; LG Stuttgart, CR 1997, 81; see already OLG
Frankfurt, Jur-PC 1994, 2631 – Tele-Info-CD; LG Frankfurt, CR 1997, 740.
275
    BGH, MMR 1999, 470-474 with annotation by Gaster, MMR 1999, 543-544 and Wiebe, MMR 1999, 474-
476; see also HandelsG Paris, MMR 1999, 533 with annotation by Gaster.
276
    LG Düsseldorf, 7. February 2001, 12 O 492/00 – Branchenbuch.
277
    LG Köln - 08.05.2002 (28 O 180/02) available online: http://www.jurpc.de/rechtspr/20020166.htm
278
    CR 1997, pp. 20.
279
    Affirming a sui generis protection district court Den Haag (with annotation Gaster), MMR 1998, 299-302.
280
    BGH, MMR 1999, 470, 472; compare also the annotation by Gaster, MMR 1999, 543, 544; concerning the
situation in the Netherlands see district court Den Haag, MMR 1998, 299, 300-301.
                                            Thomas Hoeren-Internet Law                                      89
Because of the wide definition of a database in § 87a [1] UrhG (Art. 1 [2] of the directive)
large parts of the Internet (websites281, link collections282 …) can fall under this protective
regime if the level of investment is sufficient. The protective regime contains in particular a
fifteen-year right of the database producer to wholly or partially reproduce, distribute or make
public283 the database (§ 87b [1] s.1 UrhG). The sui generis law can be relied on especially in
the case of commercial use of websites belonging to another party, for example by means of
virtual search robots (intelligent or electronic agents), which adopt the contents of other web-
sites.284 In this regard the question arises for providers of search engine services as to what
extent the search methods applied could be problematical in terms of possible sui generis pro-
tection for the websites being searched.
The difficult questions of interpretation arising and the legal uncertainty caused can only be
solved with the help of the courts. This is especially so for the interpretation of the term “es-
sence” which determines the object of protection (§ 87a [1] UrhG) as well as the extension of
protection (§ 87b [1] UrhG) and in this way is decisive about the admissibility of the database
utilization in question. In particular because of an alleged excessive utilization of these in-
definite legal terms the Database Directive came in for especially strong criticism in the
USA.285 A reason for the comprehensive discussion about the European regulation on data-
base protection might be the requirement of substantive mutuality for the granting of a sui
generis protection in relation to producers from third countries fixed in Art. 11 III in connec-
tion with the reason of consideration 56 of the Database Protection Directive. According to
this, in the EU the products of American database producers only fall under the new legal
protection if there is a comparable protection existing in the USA for European databases.
Although there are genuine fears about the dangers posed to freedom of information, science
and research, and about the hindrance of competition on the market for secondary products
and the restriction of the global trade in information products and services resulting from the
European regulation286, concerns about a competitive disadvantage for American companies
seem to be a (hidden) motive for the harsh criticism. In the end it should be said that in the



281
    However refused by OLG Düsseldorf, 29 June 1999, MMR 1999, 729 = CR 2000, 184 with annotation by
Leistner. The OLG instead affirms a general copyright protection.
282
    LG Köln, 25 August 1999, CR 2000, 400.
283
    Within a directive-conform interpretation of the exploitation rights of § 87 b UrhG the sui generis protection
generally also includes temporary reproductions and the provision on the Internet.
284
    Compare LG Berlin, AfP 1999, 649-651.
285
    See: Reichman/Samuelson, Vanderbilt Law Review 1997, 51-166; Rosler, High Technology Law Journal
1995, 105-146; generally affirming the directive G.M. Hunsucker, Fordham Intellectual Property, Media and
Entertainment Law Jounal 1997, 697-788.
286
    See especially Reichman/Samuelson, Vanderbilt Law Review 1997, 84-137.
                                          Thomas Hoeren-Internet Law                                            90
USA there have been efforts since the establishment of the Database Directive to introduce a
special protection for “non-creative” databases.287



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The Urheberrechtsgesetz provides the author with a large selection of exploitation rights288:
According to § 15 [1] UrhG authors have the exclusive right to exploit their work in a mate-
rial form. This right includes in particular the exploitation right (§§ 16, 69c no. 1 UrhG), the
right of distribution (§§ 17, 69c no. 3 UrhG) and the right to make use of derivations of the
work (§§ 23, 69c no. 2 UrhG). Moreover the authors are the only persons who are authorized
to reproduce their work to the public in a material form (right of public communication of
published works; § 15 [2] UrhG). The digitalization of copyrightable materials infringes many
of these exploitation rights.



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A reproduction in the sense of §§ 15 [1] no. 1, 16 [1] UrhG exists if reproductive parts of the
work are produced, but it has to be noted that a (further) physical fixing of the work must take
place - which must be suited to making the work in any way directly or indirectly perceptible
to the human senses.289 Because the right of reproduction is an exclusive right of the author
according to § 15 [1] no.1 UrhG he or she is able to refuse to consent to such a reproduction,
in so far as no other result arises from the restrictions in §§ 45 seqq UrhG (see part V.).


The digitalization of material by way of scanning and storage on a server (so-called upload)
are acts of reproduction in the sense of § 16 UrhG.290 This also applies to the digitalization of


287
    Compare Gaster, CR 1999, 669-678; current proposals for laws: HR.354 and HR.1858.
288
    The author’s personal rights will not be elaborated on for reasons of space; see concerning this § 2 V of this
script as well as Decker, in: Hoeren/Sieber (ed.), Handbuch Multimediarecht, München 1999, Teil 7.6; Re-
hbinder, ZUM 1995, 684; Reuter, GRUR 1997, 23; Wallner/Kreile, ZUM 1997, 625.
289
    Schricker/Loewenheim, Urheberrecht, 2. Volume. München 1999, § 16 marginal note 6.
290
    Compare OLG Frankfurt/M CR 1997, 275, 276; Freitag, Urheberrecht und verwandte Schutzrechte im Inter-
net, in: Handbuch zum Internet-Recht (2000), 289, 311.
                                           Thomas Hoeren-Internet Law                                          91
musical works for broadcasting purposes; here the argument of the broadcasting entities that
digitalization is merely a preparatory action for broadcasting is irrelevant.291 Further copies of
the work are produced in text-oriented online databases through the conversion into a text
document by the OCR-program and the potential later selection of the article. Within this con-
text the transformation connected with the digitalization process is irrelevant. According to §
23 UrhG a work can be adapted or transformed in any way without the consent of the author.
Only when this transformed version is published or exploited will the consent of the author be
necessary. Therefore, texts and pictorial material can be transformed for purposes of digitali-
zation. However, the stored data must not be made accessible to the public or distributed
without the consent of the author (see below). Besides this, reproduction also means setting
up a link if activation of the link opens a window which contains the website of another.292


The situation is different if short summaries (so-called abstracts) are produced, which inform
about the basic content of the respective document. Because abstracts cannot possibly replace
reading texts due to their compressed nature, no relevance to copyright law can be assumed
since a description of content is generally accepted as legal once the work itself has been pub-
lished.293 If just headwords and bibliographical descriptions are borrowed from the original
text and stored in the documentation system there is also no reproduction in the sense of
trademark law because there is only a textual derivation which includes the possibility of find-
ing the text later on.294


Even with links, copies in the sense of Art. 16 UrhG can be produced. This is for example the
case when the user does not leave the referring web-site when clicking the link, but instead
the text linked to can be found as a window in the web-site of the violator. Here you should
not assume that enabling free access to internet content simultaneously means giving silent
consent to being linked to.295


When recalling the stored data from the server the author’s right of reproduction can be af-
fected. This is indisputably the case if the user stores the material in a fixed manner (for ex-


291
    Like this expressly the Austrian Supreme Court of Justice in its decision of 26 January 1999, MMR 1999, 352
- Radio Melody III with annotation by Haller.
292
    LG Hamburg, 12 July 2000, MMR 2000, 761.
293
    Katzenberger, GRUR 1973, 631; Mehrings, GRUR 1983, 284, 286.
294
    Raczinski/Rademacher, GRUR 1973, 631; Mehrings, GRUR 1983, 284, 286.
295
    OLG Hamburg, 22. February 2001 – 3 U 247/00 – Online-Lexikon; similar LG Hamburg, 12. July 2000,
MMR 2000, 761 = CR 2000, 776 with ann. Metzger.
                                          Thomas Hoeren-Internet Law                                         92
ample on the hard disk or on a floppy disk). In this way another reproduction takes place in
relation to the upload for which the consent of the right-holder is necessary. Printing out into
a hardcopy is another form of reproduction. In comparison, it is not clear whether the mere act
of making visible on the screen (so-called browsing) is to be seen as a reproduction because
there the characteristic feature of a material (physical) reproduction could be seen as missing.
This does involve a prior, unavoidable but temporary loading of information into the working
memory (so-called RAM-memory = random access memory) of the computer doing the call-
ing-up. But then you could argue that reproduction has to correspond to a durable fixing of
information comparable to a book or a CD.296 Meanwhile, for computer programs it has been
established by § 69c no. 1 UrhG that a short-term adoption into the working memory is a le-
gally relevant reproduction.297 For electronically transmitted works it is argued that in the end
they will have to be treated the same way, because their authors are just as worthy of protec-
tion as the authors of computer programs.298 Also, the fixing of the work or of a protected part
of the work in the working memory for several seconds fulfils not just the technical require-
ments of a reproduction. Its purpose is to make human viewing of the work possible. Fur-
thermore modern browser software has a special “caching”-function with which every website
downloaded from another system is stored on the user’s computer to save the cost and time of
transmitting the download every single time the page is called up (for example when scroll-
ing). For these reasons more and more people are of the opinion that § 16 UrhG should also
include copies which are technically limited and of a fleeting character.299 Especially for the
field of Proxy storage300 or RAM working memory nowadays the prevailing opinion is that
even intermediate technical storages are to be regarded as acts of reproduction relevant to
copyright law.301 There an exception would exist where the intermediate storage does not em-
body an independent economic value.302


A solution will be presented soon by the above mentioned InfoSoc Directive. The commission
solved the question of temporary copies with a “trick”. Even if such copies fall under the clas-


296
    Flechsig, ZUM 1996, 833, 836; like this also Hoeren, LAN-Software, Urheber- und AGB-rechtliche Proble-
me des Einsatzes von Software in lokalen Netzen, UFITA Bd. 111 (1989), 5.
297
    It is the same in the USA; MAI Systems Corp. v. Peak Computer, Inc., 991 F.2d 511, 518, 519 (9th Cir. 1993).
298
    See the references in Schricker/Loewenheim, Urheberrecht, 2. volume München 1999, § 16 marginal note 19.
299
    Nordemann in Fromm/Nordemann, § 16 note 2.
300
    See also the technical references in Bechtold, ZUM 1997, 427, 436, 437; Ernst, K&R 1998, 536, 537; Sieber,
CR 1997, 581, 588.
301
    See OLG Düsseldorf, CR 1996, 728, 729.
302
    Like this also Art. 5 [1] of the proposal for a directive of the European Commission concerning copyright law
and concerning related rights of protection of 10 December 1997, KOM (97) 628 endg., just like the changed
proposal of 21 May 1999, KOM (99) 250 endg..
                                            Thomas Hoeren-Internet Law                                         93
sification of reproduction; a legal exception will be made for them according to § 5 [1] of the
draft. According to this regulation, reproductions do not require consent if they are inherent to
the technical process, are not used for a purpose other than making the legal use possible and
which do not have an independent economic value. Segments of the European parliament
were up in arms against this new restriction, but without success. “Transient and incidental
acts of reproduction” are to a great extent excluded from the concept of reproduction. This has
direct consequences for providers and their users. Proxy servers are equally excluded from the
duty to obtain consent, just like storages in RAM or the display on screen.



 $GDSWDWLRQ

According to § 23 UrhG a work can be adapted or reshaped in any way without the consent of
the author. Only if this reshaped version is published or exploited will the consent of the au-
thor be necessary. There is only a different regulation for software, the reshaping of which is
forbidden (§ 69 no. 2 UrhG). The consequence is that texts and pictorial material with the
exception of software can be adapted for purposes of optical storage. However, the stored data
must not be made accessible to the public or distributed without the consent of the author.
There is however an exception concerning the film version of a work. Here the adaptation is
already dependent on the consent of the author. Therefore, the question arises whether the
production of multimedia products is a filming which requires consent. The BGH defined the
filming process in its “Sherlock-Holmes” decision303 as “Umsetzung eines Sprachwerkes in
eine bewegte Bilderfolge mit Hilfe filmischer Gestaltungsmittel” (conversion of a literary
work into an animated sequence of pictures with the help of cinematic means). If the character
of animated pictures is predominant within the scope of multimedia products the application
of the regulation of films of the UrhG will be relevant.


The delimitation between adaptation which requires consent and freedom of use (§ 24 UrhG)
is also difficult. Generally an independent work which has been created within the free utiliza-
tion of another work can be published and exploited without the consent of the author of the
work used (§ 24 [2] UrhG). But there is an exception for the perceptible borrowing of melo-
dies (§ 24 [2] UrhG).




303
      BGHZ 26, 52, 55; compare also Fromm/Nordemann/Vinck, § 2 marginal note 77.
                                        Thomas Hoeren-Internet Law                            94
To be able to affirm a free utilization the other work must not be adopted in an identical or
adapted form but only serve as a suggestion for your own creation.304 For putting this into
concrete terms the judiciary has used two different “Verblassens-“(“fading-“) formulas305
since the “Asterix”-decisions of the BGH306: According to this formula a free utilization can
also be found when the personal elements taken from the protected prior work fade into the
background in such a way that the prior work can be viewed as only weakly (and hence not
relevantly) affecting copyright law within the new work. On the other hand, clear adoptions
can be legitimated by a special creative line of thought; in this case such a great inner distance
is necessary that the work is to be seen as independent. A concretization of the last variation
of the “Verblassens”-formula is especially difficult, and only made possible by considering
the specific features of the particular case. The integration of photographs into a digital dis-
play store is more likely to be regarded as a utilization which is not free than the adoption of
another party’s sounds into a multimedia work of art.



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The recall of works protected by copyright law via Intra- or Internet could also affect the au-
thor’s exclusive right of public communication in an immaterial form (§ 15 [2] UrhG). Then,
the work has to be rendered public. The definition of “public” is regulated in § 15 [3] UrhG.
According to this legal definition every communication of a work to a number of persons is
public. It was controversial for a long time whether the term “public” requires that the same
work be communicated to a number of people at the same time.307 The simultaneousness of
the communication concerning the Intra- and Internet could be refuted by the argument that
the user in the online field can only recall the material chronologically, unlike with television
programs.


However, the dispute has been resolved, because the InfoSoc Directive mentioned will estab-
lish a new, independent exploitation right. The difficult question of public communication has
also been recently regulated (see above). According to Art 8 of the World Copyright Treaty




304
    OLG Hamburg, Schulze OLGZ 190, 8 – Häschenschule; Schricker/Loewenheim, § 24 marginal note 9.
305
    Compare Vinck in Fromm/Nordemann, § 24 UrhG, marginal note 3.
306
    BGH, decisions of 11 March 1993 – I ZR 263/91 and 264/91, GRUR 1994, 191 and 206, as well as BGHZ
122, 53, 60 (“Alcolix”-decision).
307
    See the references by Ungern-Sternberg in Schricker, Urheberrecht, 2nd edition München 1999, § 15 margin
note 59; diverging opinion for example Zscherpe, MMR 1998, 404, 407, 408.
                                         Thomas Hoeren-Internet Law                                       95
(WCT)308 which was passed in December 1996 at WIPO-level all contracting states are obli-
gated to introduce an exclusive right of “making available to the public” within the broad
right of public communication. The World Performers and Producers Rights Treaty (WPPT)
which was passed at the same time provides for a respective obligation in the sphere of per-
forming artists and producers , but here – different from the WCT – the right of public com-
munication was regulated separately from the new law of “making available to the public”
(Art. 10, 14 and 15 WPPT). In the InfoSoc Directive this obligation under international law
has been transformed into the form of an EU-uniform regulation. Art. 3 [1] of the directive
provides an exclusive right of the right holders “to authorize or prohibit the making available
to the public, by wire or wireless means, in such a way that members of the public may access
to them from a place and at a time individually chosen by them”309.


However, the question of the meaning of “public” here is still unsolved. Instead of looking to
the act, the addressee becomes the focus and a differentiation is made between members of
the public and “others”. But within a company nobody is “a member of the public” so with
this distinction internal company networks would not fall under the right of “making avail-
able”. In Germany you could look to the criterion of personal connection. Whether there is
such a personal connection between the users of internal database systems mostly depends on
coincidences and characteristic features of the company structure. Also the number of con-
nectable display screens does not provide an indication of when a personal connection of the
users can be assumed. So, you might ask if there are still personal connections between users
when there are 100, 200 or 500 display screens. If all users of a CPU form RQH organizational
unit through the structure of the electronic data processing network then a personal connec-
tion can be assumed. Therefore, you should not focus on the question of which individual
connections exist between the users of a call-up terminal. Rather, the classification of the user
group within the electronic data processing organizational structure of an institution will be
decisive. However because of the exceptional character of the regulation the user is obliged to
particularize and prove the absence of a “public” nature of the electronic data processing sys-
tem.310 In the case of an internal company database you could assume a personal connection
depending on the obligation of the user so that there is no infringement of the right of public


308
    See Gaster/Lewinski, ZUM 1997, 607; Lewinski, GRUR 1997, 667; the same person in: Hoeren/Sieber (ed.),
Handbuch Multimediarecht, München 1999, Teil 7.9.
309
    The Federal Ministry of Justice in its discussion draft of 7 July 1998 wanted to standardize the new right in §
19 a (misleadingly) as a “right of transfer”. But even wrong moves like this find their friends in literature, like
e.g. Gerlach, ZUM 1999, 278 (on the background of special GVL legal positions).
310
    Nordemann in Fromm/Nordemann, § 15, note 4.
                                            Thomas Hoeren-Internet Law                                           96
communication concerning the internal use of the database. The mark might be overstepped
were the database to be generally released for commercial use or if access to the sever were
made available



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The right of distribution regulated in §§ 15 [1] no. 2, 17 UrhG contains the right to supply the
original or reproductions of the work to the public or to put them into circulation. This right
could be concerned in the case of research services which not only search for and pass on
relevant information but also supply information themselves. Here it is not significant
whether this occurs on a payment basis or free of charge, is selfish or altruistic.
However a distribution in the sense of § 17 [1] UrhG does not exist where data is merely
transmitted, because in this case the required material form is absent.311 Dominant opinion312
holds that not even an analogous application of § 17 [1] UrhG is possible where software,
books and similar things are held ready for downloading as “informational goods” on the
Internet.



9 3HUVRQDO ULJKWV RI WKH DXWKRU

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XQG )LOPEHDUEHLWXQJ LP /LFKW GHV 8UKHEHUUHFKWV LQ *585   .UHLOH:DOOQHU
6FKXW] GHU 8UKHEHUSHUV|QOLFKNHLWVUHFKWH LP 0XOWLPHGLD]HLWDOWHU LQ =80   0DQ
IUHG 5HKELQGHU 0XOWLPHGLD XQG GDV 8UKHEHUSHUV|QOLFKNHLWVUHFKW LQ =80   +DL
PR 6FKDFN ,QWHUQDWLRQDOH 8UKHEHU 0DUNHQ XQG :HWWEHZHUEVYHUOHW]XQJHQ LP ,QWHUQHW LQ
005  

The personal right of the author is the moral counterpart of the economically oriented rights
of distribution. It protects authors in their special relationship with their work.313
The author’s personal right in a narrower sense includes publication powers (§ 12), the right
to acknowledgement of authorship (§ 13) and the right of protection against distortion or in-
fringement of the work (§ 14). In a broader sense the author’s personal rights are based on the
idea underlying the whole of copyright law, that of protecting the intellectual and personal


311
    Loewenheim in: Schricker, Urheberrecht, § 17 UrhG, marginal note 5.
312
    See the records and critical considerations in Hoeren, CR 1996, 517.
313
    Decker in: Hoeren/Sieber, Handbuch Multimediarecht 1999 Teil 7.6. marginal note 1.
                                            Thomas Hoeren-Internet Law                       97
interests of the author. This law in its broader sense does not take a definite form; rather it is
applied whenever necessary to the protection of the intellectual and personal interests of the
author.314
In the area of the use of works via the Internet many difficult questions concerning authors’
personal rights arise.



 3URKLELWLRQ RI GLVWRUWLRQ

The form of a work on the Internet is sometimes very different from the original because of
the often poor quality of resolution. Here § 39 [2] UrhG has to be taken into account. Accord-
ing to this, modifications of the work or of its title are permissible where the author could not
in good faith refuse to give consent. If multimedia products are similar to cinematographic
works (see above) § 93 UrhG is applicable, which restricts the protection against distortion to
cases of especially gross distortion and infringement. A similar situation applies to persons
authorized under ancillary copyrights, to which the copyright law is applicable (§§ 14, 83
UrhG). Otherwise for foreign artists the Rome-Convention applies, which does not contain
provisions on the author’s personal rights. This gap can only be filled through application of
the slander prohibitions or other protective provisions of the criminal law.
The process of digitalization is generally not regarded as a distortion. More decisive are the
ways and means in which the work has been digitalized and placed into an off-/online context.
A poor resolution of a photograph for example can rapidly result in the loss of the artistic pe-
culiarity and in so doing infringe the moral relationship of the photographer to his or her
work. The reach of the distortion prohibition in practice is unclear and ultimately can only be
determined for each individual case. Even a contractual regulation of this area is in principle
impossible because the prohibition of distortion is non-waivable and cannot be assigned to
third persons. A waiver will only be regarded as valid in so far as exactly defined, concrete
forms of modification are expressly mentioned in the contract. As a consequence, the user
will have a duty to provide information and explanation to the author. The more definitely a
user has discussed concrete changes with the author in advance, the narrower the scope of the
distortion prohibition becomes.




314
      Dietz in: Schricker, Kommentar zum Urheberrecht, 2nd edition 1999.
                                          Thomas Hoeren-Internet Law                           98
 7KH ULJKW WR PHQWLRQ D QDPH

Along with the prohibition of distortion the right to mention of a name is of central impor-
tance. According to § 13 UrhG authors have the right to decide if and where they should be
mentioned in a work as the author. In the World Performers and Producers Rights Treaty mu-
sicians have also been granted a right (unknown in Germany until now) to the mention of
their names; the German law therefore has to be adjusted accordingly. Aside from this statu-
tory regulation, rights to the mention of a name are contractually agreed upon by producers,
for example. In the USA collective agreements in the film industry provide for a series of
name-naming duties in the title and credits.


The right to mention of a name traditionally plays its greatest role in the field of literary
works. Alongside this, it is vital for freelance photographers to be noted as originator on their
photographs; because this notice is very important for the acquisition of further orders. In
other areas the right to the mention of a name has no natural special importance. Especially
where works are used industrially or commercially, like for example software, the mention of
names is rare. The judiciary here argues that customary practice in this industry presents a
boundary to the right to mention of a name.



9, /HJDO ERXQGDULHV

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                                   Thomas Hoeren-Internet Law                                 99
Art. 14 [1] GG also protects copyright.315 Authors and persons authorized by ancillary copy-
rights assert their exclusive rights of exploitation without restriction. Such a monopoly posi-
tion would not be compatible with the provisions of the Basic Constitutional Law. To protect
the freedom of the press, broadcasting and information (Art. 5 GG) copyright law provides in
§§ 45-63 UrhG for a series of restrictions on the exercise of these rights. There are restrictions
of varying strength. In the USA, for example, a large and widely drafted limitation of “fair
use” was introduced (17 U.S.C. § 197), which is applied under certain single conditions con-
cerning every single case, and which can be, moreover, subject to the disposition of the par-
ties. Whereas, the German copy right law provides an enumerative catalogue of single barriers
with differing specifications. The interference with the author’s right to restrain consists of the
utilization - free of charge and without consent - in legal licensees, constructive licenses and
duties to performing rights societies. Constructive licenses do not give a direct authority of
utilization but merely a judicially enforceable consent to the use by the author at an appropri-
ate price. The German UrhG only recognizes one restriction based on a constructive license (§
61), which is regarded as meaningless in practice. Duties of performing rights societies, that
means the finding that a certain claim can only be enforced by a performing rights society are
found frequently, sometimes in combination with a legal license. To a great extent these legal
licences are used: Authors are not able to regulate the use of their work (but they do get to
keep their copyright royalties); and the user has a clearly defined legal license. These restric-
tions are not only effective in relation to authors but also for (§ 72 [1] UrhG), performing art-
ists (§ 84 UrhG), phonogram producers (§ 85 [3] UrhG) and film producers (§ 94 [4] UrhG).
Below, restriction regulations relevant to the field of the new media will be presented. It has
to be noted that rules concerning the limits have to be reformed as a result of the InfoSoc di-
rective. The implementation draft from March 2002 was not continued with and it will only
come back under discussion after the Federall Election in September 2002. For this reason, it
will only be discussed briefly.



 7HUPLQDWLRQ RI SURWHFWLRQ SHULRG

The copyright expires after the end of 70 years post mortem auctoris (Art. 64 UrhG). When
the work is created by several (co-)authors, the period starts running after the death of the one
who lived the longest (Art. 65 [1] UrhG). For film works the death of the main director, the
author of the screenplay, the author of the dialogues and the film composer have to be taken

315
      BVerfG 31, 229/239; 77, 263/270; 79, 1/25.
                                           Thomas Hoeren-Internet Law                          100
into account (Art. 65 [2] UrhG). The protection periods for the beneficiaries, especially the
sound storage medium and film producers as well as the performing artists have to be added.
Their protection regularly terminates 50 years after they performed the protected work.



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3KLOLSS .RHKOHU 'HU (UVFK|SIXQJVJUXQGVDW] GHV 8UKHEHUUHFKWV LP 2QOLQH%HUHLFK 0QFKHQ


The principal of exhaustion has to be considered (Art. 17 [2] UrhG; special rules for software
§ 69c no.3 s.2 UrhG). If the author agrees on selling copies, his or her spreading rights are
exhausted (apart from the right to lease). The exhaustion only extends to the circulation of
physical copies of the work; an analogous applicability of this doctrine to certain online
transmissions is regarded by the prevailing opinion as impossible.316 The exhaustion is tied in
with the fact that copies of the work are put in circulation by alienation with the agreement of
the person who owns the right to circulation. When for example a publisher sells a book, he or
she loses the right to control the copies of the work concerning further circulation. Whoever
buys the book is allowed to re-sell it. The same applies for the re-selling of used standard
software, but not for software which can be downloaded from the internet (so the prevailing
opinion).


Concerning the legal consequences, exhaustion finds its spatial borders in the EU and the
EWR.317 Whoever buys copies of protected works in the USA is not allowed to re-sell them
within the EU, an international exhaustion is rejected by the prevailing opinion.
Objectively, the exhaustion is limited to the form of circulation. It does not allow the circula-
tion within a new, independent market, like book club editions in the paperback trade.318


316
    this was also the considering reason 29 of the InfoSoc directive with the following explanatory statement:
Unlike CD-ROM or CD-I, where the intellectual property is incorporated in a material medium, namely an item
of goods, every on-line service is in fact an act which should be subject to authorization where the copyright or
related right so provides.” Here the InfoSoc directive repeats the considerations from the database directive, see
the considering reason 33. Agreeing Rheinbote, GRUR Int. 2001, 733, 737. Disagreeing Knies, GRUR int. 2002,
314 ff.; Köhler, Der Erschöpfungsgrundsatz des Urheberrechts im Online-Bereih, Munich 1999, 72.
317
    See also decision of the ECJ 1971, 487 – Polydor.
                                           Thomas Hoeren-Internet Law                                         101
 3XEOLF VSHHFKHV †  8UK*

§ 48 [1] no. 2 UrhG permits the reproduction, distribution and public communication of
speeches which are given during a public hearing before federal, municipal or ecclesiastical
institutional organs. Hence, it is possible to make speeches available via Internet without the
consent of the author. But you could question whether the exception extends just to the text of
the speech or also to other details of the speech (sound or picture material). This limitation is
of no particular importance for internet use.



 1HZVSDSHU DUWLFOHV †  8UK*

In terms of the free access to information § 49 UrhG regulates unrestricted access to articles,
above all those from the daily press. The courts were the first to derive the so-called “Presse-
spiegelbestimmung”319 from this regulation. The area of electronic press reviews is the most
interesting. According to § 49 [1] UrhG the reproduction and distribution of articles from
newspapers and other “papers or information leaflets” as well as their public communication,
is permitted if the articles concern current political, economic or religious issues and are not
subject to the rights of others. This regulation is not supposed to be changed when the InfoSoc
directive is incorporated.


a) Articles

The term “article” refers only to literary works but not photographs or drawings.320 If an arti-
cle also contains picture material next to the text, only the adoption of the text falls under § 49
[1] UrhG. So it would be forbidden to scan (the regularly illustrated) texts from the daily
press in toto and to feed them into a database according to § 49 UrhG. Only the use of LQGL
YLGXDO articles is allowed but not the adoption of the text of a whole edition. Only those arti-
cles can be used whose content concerns current political, economic or religious issues. Dis-




318
    Federal Supreme Court (BGH), GRUR, 1959, 200 – Heiligenhof.
319
    Against the application of § 49 [1] UrhG to press reviews Beiner, MMR 1999, 691, 695.
320
    Loewenheim, Urheberrechtliche Grenzen der Verwendung geschützter Werke in Datenbanken, Stuttgart
1994, 73 with further references in footnote 327.
                                           Thomas Hoeren-Internet Law                           102
tributions with a mainly scientific or cultural content do not come under this regulation.321 In
addition, the adopted article must still be of current interest at the time of the adoption.322


b) Newspapers

The extraction of material is only permitted in the case of “newspapers and other information
leaflets serving only current interests”. Periodically published information leaflets and news-
letters besides the daily press also fall into this category.323 Here the question arises whether
an online-newspaper is a “newspaper” in the sense of § 49 UrhG. The representatives of
newspaper publishers reject this. They refer to the fact that § 49 UrhG is an exceptional provi-
sion at the expense of the author. Exceptional provisions should be interpreted narrowly.
Therefore, § 49 UrhG is applicable to print media as a basic subject material, and has no place
in the online-industry. In my view this opinion was rightly rejected by the performing rights
society “Wort”. According to their view § 49 UrhG certainly has to be interpreted restrictively
as an exceptional provision. But this does not exclude a sensible and appropriate interpreta-
tion of the term “Newspaper”. This cannot depend on the material medium on which a publi-
cation is published. According to the typical definition of journalism, “newspaper” includes
every periodically published information medium with a universal and current content.324 In
addition the planned restatement of § 49 in the ministerial draft bill of the 5. Urheber-
rechtsänderungsgesetz also shares this aim including online-media in the definition.325 In this
way online-newspapers also come under the “Pressespiegelbestimmung”.


c) Electronic press monitors

Controversy surrounds the applicability of § 49 UrhG to electronic press monitors, especially
in the online area.
It is questionable if the development of a “press monitor database” which could for example
reasonably be used within a large company or a government authority, would be included in §


321
    In my view Melichar goes too far when he says that it would be sufficient for § 49 that an article “also“ has
the privileged content (Schricker/Melichar, § 49 marginal note 7). The important thing is the centre of the text.
322
    In my view Loewenheim goes too far, Urheberrechtliche Grenzen der Verwendung geschützter Werke in
Datenbanken, Stuttgart 1994, 74, when he focuses on the time of the adoption by the users (for example of a
database) for the relevance to the present. The handing-over itself is not a relevant action concerning copyright
law; more so the moment in which the rights of exploitation of the author have been infringed is decisive.
323
    Disagreeing the Higher Regional Court in Munich in its judgment of 23rd December 1999 which excludes
articles from popular magazines (like Spiegel or Zeit) from freedom of press review.
324
    See Rehbinder, UFITA 48 (1966), 102, 103, 104; compare also Melichar, Die Begriffe „Zeitung“ und „Zeit-
schrift“ im Urheberrecht, ZUM 1988, 14.
325
    Draft of 7 July 1998 (http://www.bmj.bund.de/misc/1998/urh_98.htm); the changed § 49 [1] now refers to
papers, types and “other data carriers”.
                                          Thomas Hoeren-Internet Law                                           103
49 [1] UrhG. According to § 49 [1] s.1 UrhG only the distribution of those information leaf-
lets which serve the current interest is permitted. But it does not seem likely that electronic
press monitor reports really will only be used for one day and then be destroyed, or stored
independently of the other daily press monitor reports for that day. Rather, the intent is to es-
tablish a kind of database which will be available at all times and much more convenient than
traditional press monitors because it will be equipped with search functions. The requirement
of “current interest” would be eliminated by this. However the division is fluid.326


The adopting medium must also be a newspaper or information leaflet. The opinion supported
by some which holds that the selective printing of scanned newspaper articles from a central
database would also come under § 49 [1] UrhG.327 seems to be erroneous. The users of a da-
tabase do not assemble their own “information sheet”; in as far as the distribution of copies to
third parties is concerned, a prior summary in a central primary medium is missing. As
Loewenheim rightly stated328 with these information databases the providers lack an intention
to inform on their own behalf and in their own interest.


Altogether the legal situation concerning the applicability of the rule to press monitors in an
electronic form is still unclear.329 Finally, judgment has been given against permitting the li-
censing of an electronic press review by a copyright collecting society.330 A privileged status
under § 49 UrhG was rejected and the author’s right of prohibition affirmed. In the meantime
this decision by the LG Hamburg has been confirmed by the OLG Hamburg.331 The Higher
Regional Court in Cologne332 and the Regional Court in Berlin333 have a similar opinion on
the legal position. A similar restrictive point of view is held by the Appellate Court in Berne
for the field of press observation.334 The intended alteration of § 49 UrhG according to the 5.
Gesetzes zur Änderung des Urheberrechtsgesetzes (Act to Amend the Copyright Act) ex-
pressly intends the extension of the existing regulation to electronic press reviews.335 How-
ever it is questionable whether this regulation will be covered by the harmonized restriction

326
    Compare Wallraf, Elektronische Pressespiegel aus der Sicht der Verlage, AfP 2000, 23, 27.
327
    Like this Eidenmüller, Elektronischer Pressespiegel, CR 1992, 321, 323.
328
    Loewenheim, Urheberrechtliche Grenzen der Verwendung geschützter Werke in Datenbanken, Stuttgart
1994, 76.
329
    Already against the application to traditional press reviews Wallraff, Elektronische Pressespiegel aus der
Sicht der Verlage, AfP 2000, 23, 26; Beiner, MMR 1999, 691, 695.
330
    LG Hamburg, 7 September 1999, AfP 1999, 389.
331
    OLG Hamburg, 6 April 2000, AfP 2000, 299, 300.
332
    OLG Köln, 30. December 1999, MMR 2000, 365 with ann. Will. = AfP 2000, 94 = GRUR 2000, 417.
333
    LG Berlin, judgment from 15th May 2001, 339.
334
    Appellate Court Berne, judgment of 21st May 2001, MMR 2002, 30 with annotation by Hilty.

                                        Thomas Hoeren-Internet Law                                        104
regulations of the proposal for a directive concerning copyright law within the information
society.336 Some newspaper publishers have founded the Press Monitor Ltd. (“Presse Monitor
GmbH”) which is meant to bundle the press review rights of the publishers. It is under discus-
sion whether this organization should be regarded as a collecting society itself, so that permis-
sion to conduct its activities has to be sought from the DPMA (German Patent and Trade
Mark Office).337


From the Munich Local Court’s point of view there is no problem concerning copyright law
and it is covered by Art. 49 UrhG where someone offers an electronic press review in the
form of a list of articles found using search terms which do not contain more than the heading
of the article, the newspaper’s name as a list of references, department and the sentence of the
article containing the search term.338


d) Copyright royalties

Furthermore the copyright royalties connected with the exception, and hence the permissibil-
ity of reproduction and distribution are important. According to § 49 [1] sent. 2 UrhG an ap-
propriate royalty has to be paid for reproduction, distribution and public communication. The
right-holder can only enforce this claim through a copyright collecting society (§ 49 [1] s. 3
UrhG).339 The obligation to pay remuneration will be dropped if merely short passages from
several opinion columns or articles are used (§ 49 [1] s. 2 UrhG). Therefore, it is permitted to
place extracts of press reports on the Internet without the consent of the author and without
the obligation to pay copyright royalties.



 )UHHGRP RI FLWDWLRQ †  8UK*

Furthermore the application of the rules of freedom of citation regulated in § 51 UrhG could
be considered. In doing this it has to be taken into account that Art. 51 UrhG protects the
freedom of opinion (Art. 10 EHRC and Art. 5 [1] GG) , and therefore the conflicting rights



335
    Compare the statements of reasons of the discussion draft (http://www.bmj.de/download/begr.doc), p. 9.
336
    Compare Art. 5 [2b] of the changed proposal for the directive from 21 May 1999, KOM (1999) 250 endg.,
which permits a digital reproduction only for “private and personal utilization”.
337
    See for the legal dispute, if and with what content the DPMA is allowed to hand out an interdiction for press
releases of Press Monitor Ltd.: Bavarian Higher Administration Court (BayVGH), decision of 14th March 2002,
AfP 2002 (not final).
338
    LG München I, 1. March 2002, K & R 2002, 258 with annotations by Lührig
339
    Compare above footnote 15.
                                            Thomas Hoeren-Internet Law                                       105
and interests found in copyright law and freedom of opinion have to be considered and bal-
anced and the conflict cannot be resolved lopsidedly in favor of copyright law.340


a) Freedom of citation for scientific works

§ 51 no. 1 UrhG permits the reproduction, distribution and public communication of certain
previously published works even without the consent of the author, where they are included in
a separate scientific work for the purpose of explaining the content.


DD 6FLHQFH

The concept of scientific works is broad; even cinematographic works can fall under this clas-
sification.341 However the work must reflect a serious, methodical search for knowledge.342
The developers of multimedia products can utilize the right of citation for scientific purposes,
for example in the case of online teaching material for students, pupils and other interested
persons. But this rule does not apply to the utilization of material for products which have
their main focus on their entertainment value343, like for example a website on the history of
the Beatles.


EE 6FRSH RI WKH FLWDWLRQ

§ 51 no. 1 UrhG allows the adoption of “individual works”. This legitimates a broad and ex-
tensive utilization of other sources in favor of the distribution of scientific information on the
one hand: the persons citing can fall back on whole works if they require this for substantia-
tion of their own statements (so-called large citation). On the other hand, the right of citation
is limited to “individual” sources. This regulation is interpreted very restrictively with works
of one author.344 The person citing should not use the whole work repertoire of an author in
reliance on § 51 UrhG. The situation is different concerning the citation of multiple authors;
this tends to be dealt with more generously.

340
     See for the exciting legal dispute concerning the broadcasting of Utrillo works before the Cour d’Appel de
Paris of 30th May 2001, GRUR Int. 2002, 329 with annotation by Geiger. Similar to the relationship between
Art. 10 EHRC and the Copyrights Act (UrhG) the Austrian Supreme Court (öOGH), judgment of 12th June 2001,
GRUR Int. 2002, 341 as well as the judgment of 12th September 2001, MMR 2002, 30 with annotation by Wal-
ter.
341
    Ekrutt, Urheberrechtliche Probleme beim Zitat von Filmen und Fernsehsendungen, Diss. Hamburg 1973, 109;
Ulmer, Zitate in Filmwerken, GRUR 1972, 323, 324.
342
    See LG Berlin, Schulze LGZ 125, 5; LG Berlin, GRUR 1978, 108 – Terroristenbild; Schricker/Schricker, §
51, Rdnr. 31.
343
    See KG, GRUR 1970, 616, 617, 618.


                                        Thomas Hoeren-Internet Law                                         106
FF 4XRWDWLRQ SXUSRVH

For multimedia applications too, the question of quotation purpose is decisive. The quoting
work must be independent. It is not sufficient that works of other persons are merely col-
lected; it must be an independent intellectual creation in relation to the choice of quota-
tions.345 The quotations are only permitted for substantiating the quoting author’s own state-
ment. If the quoter’s own statement is mere background to the quotation, admissibility has to
be ruled out according to § 51 no. 1 UrhG. Furthermore a quotation can only be permitted if
there is an inner connection between the quoting and the quoted work.346 The quotation must
only serve as evidence and an aide and has to take a back seat in relation to the main work.347
But if the quoting person wants to waive a personal exposition in favor of the quotation he or
she cannot rely on § 51 UrhG.348 In the multimedia field therefore the important thing is the
reason why works of other persons are to be integrated in the product. The adoption of whole
works without an analysis of the content seems especially dubious. On the other hand the
utilization of music or film sequences in a multimedia encyclopedia is legitimated by § 51
UrhG.


GG ,QGLFDWLRQ RI VRXUFH

However § 51 UrhG also requires that the source be precisely given with a reproduction of a
work or a part of the work (§ 63 [1] UrhG). But this will not be practicable with the digitaliza-
tion of photographs or the sampling of certain music components.349 The source requirement
can also be problematic when quoting texts available on the Internet because a link will not
generally be sufficient as a source indication – because of the fleeting nature of the refer-
ence.350 Links in your own text are not quotations as such and therefore do not need to meet
the requirements.351




344
    BGHZ 50, 147, 156 – Kandinsky I; LG München II, Schulze LGZ 84, 9; see also Schricker/Schricker, § 51
Rdnr. 34.
345
    BGH, GRUR 1973, 216, 217, 218 – Handbuch moderner Zitate; Schricker/Schricker, § 51 Rdnr. 22 and 34.
346
    BGHZ 28, 234, 240 – Verkehrskinderlied; BGHZ 50, 147, 155, 156 – Kandinsky I; BGH, GRUR 1987, 362 –
Filmzitat; Schricker/Schricker, § 51 no. 16 with further references.
347
    BGH, GRUR 1986, 59, 60 – Geistchristentum; BGH, GRUR 1987, 34, 35 – Liedtextwiedergabe I.
348
    KG, GRUR 1970, 616, 618 – Eintänzer.
349
    The situation will, however, be different if one day the digital fingerprint becomes reality. See Gass, Digitale
Wasserzeichen als urheberrechtlicher Schutz digitaler Werke?, ZUM 1999, 815.
350
    Compare Schulz, ZUM 1998, 221, 232.
351
    Frank A. Koch, GRUR 1997, 417, 420.
                                           Thomas Hoeren-Internet Law                                           107
b) Small quotation, § 51 no. 2 UrhG

According to § 51 no. 2 UrhG reproduction, distribution and public communication is allowed
where parts of the work are quoted in a separate literary work, after the publication of the
quoted work. This regulation is also extended beyond its literal wording to include films352
and other genres of works353. Only the utilization of small sections of the work is permitted.
However these sections must be capable of being protected in themselves. Small pixels and
sounds354 for example are not capable of being protected and therefore can always be used
freely. Picture quotations cause difficulties. With photographs and works of the performing
arts a quotation necessarily includes the whole picture and not just a section; in these cases –
depending on the purpose of the quotation – the use of the whole work is allowed.355 Along-
side the quotation purpose, the necessity of indicating the source should be paid special atten-
tion.


c) Music quotations, § 51 no. 3 UrhG

According to § 51 no. 3 UrhG it is permitted to integrate parts of a published musical work
into a (separate) work of music.356 This regulation is of no great significance in the multime-
dia field, because CD-ROMs or Internet-applications are not works of music. Both can be
categorized more as a database or (partly) as works similar to cinematographic works.



 ,QGH[DWLRQ DQG SUHSDUDWLRQ RI DEVWUDFWV

According to prevailing opinion bibliographic details, indices and abstracts do not constitute
an interference with the copyright of the author.357 But there is an exception if the documenta-
tion happens to be inexpert; here authors can rely on their personal rights on the basis of a
distortion of their work.358




352
    BGH, GRUR 1987, 362 – Filmzitat; LG München I, FuR 1983, 668.
353
    Schricker/Schricker, § 51
354
    Compare Schricker/Loewenheim, § 2 no. 122.
355
    KG, UFITA 54 (1969), 296, 299; LG München I, Schulze, LGZ 182, 5; Schricker/Schricker, § 51 marginal
note 45.
356
    See also in general Schricker/Melichar, § 51 marginal note 49.
357
    Compare Hackemann, GRUR 1982, 262, 267; Katzenberger, GRUR 1990, 97.
358
    Katzenberger, GRUR 1973, 629, 632; compare also the chapter „Urheberpersönlichkeitsrechte“.
                                          Thomas Hoeren-Internet Law                                108
 3XEOLF JUDWXLWRXV FRPPXQLFDWLRQ †  8UK*

A further restriction affects the public communication of a work where it does not serve a
profit-making purpose of the organizer and if participants are admitted for free (§ 52 [1] s. 1
UrhG). Under the conditions of § 52 UrhG for example a protected work can be made avail-
able for free over the online-networks359; but appropriate royalties will still have to be paid (§
52 [1] s. 2 UrhG). For services within CompuServe, AOL or T-Online § 52 UrhG does not
apply because these involve fees. But the regulation could be very important for the use of
material on the Internet. If a homepage does not serve (at least indirectly) income-producing
purposes it can contain every work without the consent of the author and can also be made
available to the public. It would make the most sense for the appropriate royalty to be paid to
the copyright collecting societies which then pay out to the authors. However the copyright
collecting societies have not yet grasped the special meaning § 52 UrhG has for the utilization
of works on the Internet. Hence no specific rates or other collective agreements have been
developed for this field yet. On the other hand it is questionable whether it would accord with
the purpose of § 52 to include reproduction via the Internet – a much more intensive and
wider-reaching exploitation than the one regulated in the exceptions of the act, which ex-
cludes public stage-like performances, broadcast transmissions and public presentations of a
film work from the privileges in its paragraph 3.


If the content made available is a database (and arg a maiori ad minus a database work) in the
sense of §§ 87 a seqq UrhG this restriction will in any case not apply. Rather the restrictions
on the database producer’s rights to prohibit are regulated conclusively in § 87 b UrhG.


The referee’s draft for the implementation of the InfoSoc directive differentiates between
public broadcasting and public access which is not just meant for a defined and countable
group of members of the public. However, the separation is dubious. It is questionable
whether libraries fall under this group, for example.




359
      Compare Dreier in Schricker, Informationsgesellschaft, p. 162.
                                           Thomas Hoeren-Internet Law                         109
 5HSURGXFWLRQ IRU SHUVRQDO XVH

The “magna charta” of legal licenses is to be found in § 53 UrhG which extensively permits
reproductions for one’s personal use without the consent of the author.360 The author receives
a claim for remuneration as compensation for the loss of rights connected with § 53 UrhG (§§
54, 54a UrhG) which has mainly been directed towards a share of the so-called “device and
blank cassette charges” since 1985.361 After incorporation of the database directive into na-
tional law (Art. 7 IuKDG) there are now differing restriction regulations for databases and
database works. According to the new § 53 [5] UrhG reproduction from electronically acces-
sible databases for private use (§ 53 [1] UrhG) is no longer permitted. Also incorporation into
your own archives (§ 53 [2] no. 2 UrhG), reproduction for being informed about current af-
fairs (§ 53 [2] no. 3 UrhG) and reproduction from magazines or works out of print (§ 53 [2]
no. 4 UrhG) have been dropped in view of electronically accessible database works. Repro-
duction for a personal scientific use pursuant to § 53 [2] no. 1 UrhG is only covered by the
restriction if it is not in pursuit of commercial purposes. A similar rule can be found in § 87c
UrhG for non-creative databases which conclusively regulates the restrictions applicable to
databases. Reproduction for personal use (§ 87c no. 1 UrhG) is only excluded if the database
is electronically accessible. Scientific use (§ 87c no. 2 UrhG) as well as utilization as a visu-
alization aide for teaching (§ 87c no. 3 UrhG) without a license has been limited to the mak-
ing of copies necessary for the purpose and without a commercial aim. Moreover, Art. 53
UrhG is at the legislator’s disposal when it comes to incorporating the InfoSoc directive.


a) Private use

According to § 53 [1] s. 1 UrhG it is permitted to produce individual reproduction pieces of a
work for private use, or to have them produced. With the transfer of works to picture and
sound carriers as well as with the reproduction of works of the performing arts the production
by third parties is only allowed where it happens on a gratuitous basis (§ 53 [1] s. 2 UrhG). In
theory everybody can load and copy another person’s material via File Transfer Protocol
(FTP) for private use. You can also have libraries and documentation offices copy material
and send it to you via the Internet. But this requires that the copy-making by others is for free.
§53 [1] UrhG does not include the making of copies for commercial purposes. According to

360
   See also Joachim Maus, Die digitale Kopie von Audio- und Videoprodukten. Die Nutzung von Film und
Musik im privaten Bereich und deren Behandlung im deutschen und im internationalen Urheberrecht, Baden-
Baden 1991.


                                      Thomas Hoeren-Internet Law                                   110
prevailing opinion362 only natural persons fall under the regulation; here companies cannot
refer to this rule for intra-company purposes. There is dispute as to how far the copying of
works is only allowed if a legally produced copy is used as the master copy. Especially in
connection with “Napster”363 the opinion was held that this criterion was not a requirement
according to Art. 35 UrhG.364


Art. 53 [1]UrhG according to the draft provides that production is only legal when it is free
of charge. Presently, the requirement of being free of charge is required only for picture carri-
ers and sound storage mediums. If this requirement is going to be extended to all types of cop-
ies, the present university interlending and copy system is in danger (for example, the mail-
order service of copies of the universities).


In future Art. 53 [1] UrhG is meant to be counteracted by the new Art. 95b. As long as the
right-holder uses technical precautions, public multiplicators (like schools and universities)
are protected, but not private users. From the absence of Art. 53 par.1 UrhG in Art. 95b [1] it
can be concluded that the right-holder only has to use technical disabling mechanisms to get
around Art. 53 [1] UrhG. This “trick”is unacceptable. The fact that the Federal Ministry of
Justice (BMJ) is willing to give legal protection to such a strategy is a curtsy towards the mu-
sic industry which combines a legislative front with half-heartedness.


It is just intolerable and unconstitutional that the freedom for private copies is not mentioned
in Art. 95b [1]. For this reason, the regulation of Art. 53 [1] UrhG is a toothless tiger. With
the use of technical protection mechanisms the industry can take back from private individu-
als what has been given to them by Art. 53 [1] UrhG. The Federal Ministry of Justice has also
not justified why it did not exhaust the existing options provided by Art. 6 par.4 of the direc-
tive in favor of private users. Evidently, an unofficial present is supposed to be given to the
music industry, which fails to comply with constitutional provisions (the sanctities of the
home; freedom of information). The BMJ has not yet given any reasons why the options men-


361
    For the preliminary history see Kreile, ZUM 1985, 51; Melichar, ZUM 1987, 51; Nordemann, GRUR 1985,
837.
362
    Like this Norbert Flechsig, NJW 1985, 1991, 1994. Similar also Schricker/Loewenheim, § 53 marginal note 7
with further references.
363
    see A&M Records inc v. Napster inc, 114 F. supp. 2d 896= GRUR Int. 2000, 1066 and decision of US Court
of Appeals for the ninth circuit of 12 February 2001, GRUR int. 1001, 355
364
    Similar: Schack, Urheber- und Urhebervertragsrecht, 2nd edition, annotation 496; Mönkemöller, GRUR 2000,
663, 667seq; different opinion Leupold/Demisch, ZUM 2000, 379, 383 seqq; Loewenheim, Festsschrift Dietz
2001, 415 seqq
                                           Thomas Hoeren-Internet Law                                    111
tioned in the directive in favor of private users should not be used. Art. 6 IV of the directive is
a hard-earned compromise in favor of private users that absolutely needs to be implemented.
This cannot be contradicted by bringing up the arguments of the music industry concerning
the danger of hacking and uncontrolled CD-burning. There are still enough effective technical
possibilities available to restrain the number of private copies; moreover the music industry
obtains a large compensation for its loss by the sale of blank cassettes and equipment. At the
most, one could think about increasing this compensation.


The aforementioned loophole cannot be compensated for by the fact that using technical
equipment for private use is exempt from punishment (§ 108 b I of the ministerial draft bill);
Civil sanctions persist and in certain cirumstances they can be very harsh for the person con-
cerned. Also, for the general public this gives rise to the impression that getting around pro-
tective measures in order to produce private copies is strictly forbidden, which according to §
53 I UrhG is not true. One wonders what is actually wrongful in defeating protective meas-
ures for private purposes. In fact, introducing technical barriers in the first place is the real
legal wrong.


b) Personal Scientific Use

The copyright law also legitimates the free copying of works from the Internet for scientific
purposes. According to § 53 [2] no. 1 UrhG it is permissible to produce several copies of a
work without the consent of the author for personal scientific use, or have them produced.
The term “scientific use” has to be interpreted widely. It includes copying online by


      • scientists and research institutes
      • private persons with a scientific need for information
      • students in the context of their studies
      • research institutions of the private sector of the economy.365


A line has to be drawn where almost complete copies of books or magazines are made with-
out the consent of the author (§ 53 [4] sent. 1 UrhG). The Gutenberg project may serve as an
example. It has been providing works of world literature on the Internet for years. In so far as


365
   However this is controversial. Like this also Schricker/Loewenheim, § 53 Rdnr. 14; Ulmer, § 65 III 1; restric-
ted to universities Fromm/Nordemann, § 53 Rdnr. 9. approving BGH, 20 February 1997, ZUM-RD 1997, 425 –
Betreibervergütung für Privatunternehmen.
                                          Thomas Hoeren-Internet Law                                         112
the copyright period for these works has not yet expired according to German law, users may
not retrieve the texts from the Internet for scientific purposes.
§ 53 UrhG also does not legitimate the distribution and public communication of the material
(§ 53 [5] sent. 1 UrhG). So, those people who download works from the Internet are not per-
mitted to “post “ them.


In future libraries and scientists should be protected from technical barriers that restrict their
freedom and their rights under § 53 II UrhG. The duty of the protected circulation group to
enforce its claim by means of claim to restitution and injunctive relief by filing a suit (95b [2],
[3]) is questionable. Such a procedure is a time- consuming and costly remedy. It encumbers
the activity of libraries for example, in spite of their legal rights. In this way the procurement
of information at universities is crucially endangered, as universities have to bear the exercise
risk as well as the risk of delay. In the case of insolvency of the right-holder significant prob-
lems would emerge concerning the use of CD- ROMs; scientific research could be paralyzed
very quickly. In addition to this, libraries would have to bear the risk of delay in procuring
necessary information and the risk of non- usability of CD-ROM databases.


c) Incorporation Into Own Archives

According to § 53 [2] no. 2 UrhG individual pieces of reproduction of the work can be pro-
duced for incorporation into your own archives in so far as reproduction is necessary for this
purpose and so long as the reproduction serves as the basis for your own work. This regula-
tion may be important for intra-company, electronic document management but not within the
online sector. You can only come to a different conclusion if you also subsume publicly ac-
cessible archives under this regulation366; because then § 53 UrhG justifies the establishment
of large online databases with access to internal press material for example. But the prevailing
opinion evaluates the rule differently. Really, archives are only meant for internal use367
whereby electronic archives are permitted only where the archiving does not constitute an
additional exploitation of the work.368 With respect to electronic press archives (in the sense
of an in-house communication system that permits access by a certain user circle) the BGH369




366
    Nordemann, Festschrift für Hubmann, 325, 326.
367
    Like this also von Gamm, § 54 no. 10; Schricker/Loewenheim, § 53 no. 25; Katzenberger, GRUR 1973, 629,
636.
368
    Fromm/Nordemann, § 53 marginal note 7; Echricker/Loewenheim, § 53 marginal note 26.
369
    BGH, 10 December 1998 – elektronische Pressearchive, MMR 1999, 409 with annotation by Hoeren.
                                         Thomas Hoeren-Internet Law                                   113
decided that even if the utilization is restricted to employees of the firm, this goes beyond
what the legislator wanted to privilege with § 53 [2] no. 2 UrhG.


d) Newspaper and Magazine Articles

According to § 53 [2] no. 4a UrhG it is permissible to produce individual pieces of reproduc-
tion of a work or have them produced if they are articles from newspapers or magazines, for
“other personal use” – so a particular purpose is not necessary . For other works this regula-
tion merely privileges the reproduction of small sections. Altogether the copied articles must
represent only a small part of the newspaper or magazine; the regulation is not valid for the
adoption of considerable parts of the chosen articles.


Recently, the permissibility of so-called copying services has been discussed - these are sup-
plied by larger libraries and by companies for the benefit of clients.370 The BGH decided
against commercial research services within two proceedings, that the supply of research and
production in this case is not covered by the restrictions of copyright law. The lawsuits were
both against the CB-Infobank which had offered to fill research orders out of their extensive
press archives and to make copies at the same time. In this it referred mainly to § 53 [2] no. 4a
UrhG. The lower courts rendered differing judgments. The BGH clarified that § 53 [2] no. 4a
UrhG is not applicable to research and copying orders because the copying service of the in-
formation office is not performed on behalf of the client but instead on the office’s own be-
half. Therefore, the bank could not rely on any privileged status. The client on the other hand,
who could have relied on limitations, did not copy or have something copied.371


The legal situation concerning public libraries and other institutions accessible to the public is
different from that of commercial information services. This is especially the case if research
and selection activities – as in the following case - are both the responsibility of the customer.
In a spectacular decision of principles372 the BGH judged that these institutions neither in-
fringe the right of reproduction nor the right of distribution if they make reproductions of cer-
tain magazine distributions made to order and transmit them by post or fax. In this case a


370
    These problems are the background for the expertise that Loewenheim has gained for the newspaper publisher
organizations; see the same person, Urheberrechtliche Grenzen derVerwendung geschützter Werke in Daten-
banken, Stuttgart 1994.
371
    BGH, WM 1997, 731 – CB-Infobank I and WM 1997, 738 – CB-Infobank II.
372
    Decision of 25 February 1999 – I ZR 118/96, K&R 1999, 413 – Kopienversanddienst. Both parties filed a
constitutional complaint against the decision. Compare also the (contrary) annotations referring to this judge-
ment by Hoeren, MMR 1999, 665 and Loewenheim, ZUM 1999, 574.
                                         Thomas Hoeren-Internet Law                                         114
claim by the author for an appropriate royalty should be granted in an analogous application
of §§ 27 [2] and [3], 49 [1], 54 a [2] and § 54 h [1] UrhG, which can only be enforced by a
copyright collecting society. The acceptance of such a claim should, in view of the technical
and economic development during recent years, be necessary in order to take the requirements
of Art. 9 RBÜ, Art. 9 and 13 of the TRIPS-agreement, the constitutional guarantee of the right
of ownership of Art. 14 GG as well as the copyright principle of participation into account. In
light of this background an analogous application should be necessary of all regulations in the
UrhG which within their limitations grant a right holder copyright royalties. In this line of
argument the BGH refers in detail to the new possibilities of the Internet and the access to
online databases (in the sense of online catalogues and the easier research methods because of
them): However it is left open whether the BGH only wants to exclude copy transfer by post
or fax, or if the reasons for the decision can be transferred to online shipments (which were
not the substance of the action).


In the view of the OLG Cologne § 53 II nr 4a UrhG includes online searching services that
help to locate newspaper articles by means of deep-links373; the user utilizes the search service
for private use only. This is not altered by the participation of the search service.


e) Exception Provisions for Teaching

Multimedia is often used for teaching and training purposes. In this respect the question of the
scope of § 53 [3] UrhG arises. This regulation allows the reproduction of small parts of a
printed work or of individual newspaper and magazine articles for school-teaching and for
education and continuing education in non-commercial institutions. You would be making a
false interpretation if you were to try to release works for copying by way of a general school
Internet service, in reliance on this exception provision. The regulation only refers to copies in
the “number required for one class”. Besides this the distribution and public communication
of material is not covered by the provision (§ 53 [3] sent. 1 UrhG).


f) Legal Consequence: Copyright Royalty

In the cases of § 53 [1] – 3 UrhG the author has a claim for copyright royalties against the
producer of devices designed for making reproductions. This claim regulated in § 54 UrhG is




373
      Decision of 27 October 2000, K&R 2001, 327 = NJW- RR 2001, 904
                                        Thomas Hoeren-Internet Law                            115
of benefit to the performing artist (§ 84 UrhG), the phonogram producer (§ 85 [3] UrhG) and
the film producer (§ 94 UrhG).


However a distinction must be made between the copyright royalty for image and sound re-
cordings (§ 54 UrhG) and the one for reprographical reproductions (§ 54 a UrhG). This dis-
tinction is not just of a theoretical nature; rather the royalty is calculated differently (compare
the schedule to § 54 d [1] UrhG).


DD &RS\ULJKW 5R\DOWLHV IRU ,PDJH $QG 6RXQG 5HFRUGLQJV

§ 54 [1] UrhG grants a copyright royalty for the recording of broadcast programs on image or
sound storage devices, and the transfer from one image and/or sound carrier to another. This
regulation is of increasing importance in the era of MP3374 and the (meanwhile wide-spread)
use of CD-burners. But a royalty regulation for CD-burners, MP3 devices or hard discs is still
non-existent.375 The one for blank CDs is based on the blank cassette royalty, which does not
seem justified in light of the enormous advantages in quality of digital copies.376


EE 5HSURJUDSKLFDO 5HSURGXFWLRQV

Beside the copyright royalties according to § 54 [1] UrhG, the claim for reprographical repro-
ductions pursuant to § 54 a [1] UrhG can also be important for multimedia. This claim is es-
pecially important for those kinds of work where it is to be expected that they will be repro-
duced for personal use by photocopying or a comparable procedure.


In the digital context the question arises whether the digitalization of analog information – for
example by scanning – can be seen as a procedure comparable to photocopying. Any form of
reproduction should be sufficient if there is a material fixing at the end of the procedure.377
Consequently, it depends to what extent the digitalization leads to a material fixing – compa-
rable to a photocopy. This could be in doubt if you focus on the loading into the working
memory. But digitalization does not stop with the loading process. As a result, the perform-
ances of others will be loaded in a lasting way into the main memory. In this respect this a
procedure comparable to the photocopying process.


374
    Compare Cichon, Musikpiraterie im Internet, K&R 1999, 547.
375
    Compare Däubler-Gmelin, Private Vervielfältigung unter dem Vorzeichen digitaler Technik, ZUM 1999,
769, 771.
376
    Cichon, Musikpiraterie im Internet, K&R 1999, 547, 552.
377
    Schricker/Loewenheim, § 54 a marginal note 6.
                                         Thomas Hoeren-Internet Law                                116
Furthermore § 54 a [1] UrhG requires that the devices are “intended” for the making of repro-
ductions for personal use. This requires that the device is technically suitable and intended for
making reproductions.378 Scanner379, sampler and telefax devices380 but not PCs, modems and
hard disks fall under the suitable devices classification. For optical storage media a fee does
not have to be paid because §54 a [1] UrhG only includes devices which are designed for
making reproductions.381


The right to copyright royalties can only be enforced by copyright collecting societies pursu-
ant to § 54 h [1] UrhG. For claims according to § 54 [1] UrhG the “Zentralstelle für private
Überspielungsrechte” (ZPÜ) seated in Munich is responsible. The VG Wort looks after claims
according to § 54 a [1] UrhG as far as literary texts are concerned. But for the reproduction of
works of performing artists and presentations of a technical-scientific kind the VG Bild-Kunst
is authorized to assert copyright royalties.


g) Reform Proposals

Within the scope of §§ 54 and 54 a UrhG in particular, the question of the adequacy of legal
licenses within the digital context arises. The freedom of private use was also added to copy-
right law at a time when because of technical standards copies were significantly poorer than
the original. Around the turn of the century technical copying procedures for private use were
generally unknown. The freedom of copying embodied in § 15 [2] LUG and § 18 [1] KUG
extended to the handwritten copying of texts and the copying of pictures. With the arrival of
video recorders and other copying machines in private households the legislator was forced
for the first time to limit the principle of free-of-charge private copying in favor of the de-
vice/blank cassette fee and the user royalty. But this limitation is not sufficient in the digital
era. Digital copies are always equivalent to the original. As the example of software shows it
is possible for digital works to be copied – even to a great extent – in a short time by private
households. Upholding the private freedom of copying therefore often leads to an abuse of
this freedom. In Denmark the legal license for digitally made copies has been recently elimi-


378
     See BGHZ 121, 215, 218 seq. – Readerprinter. According to former law the technical suitability was suffi-
cient; see BGH, GRUR 1981, 355, 357 – Videorecorder; GRUR 1982, 104, 105 – Tonfilmgeräte concerning §
53 [5] sent. 1 UrhG.
379
    BGH; 5 July 2001, WRP 2002, 219- Scanner: OLG Hamburg, 3 December 1998, CR 1999, 415.
380
    BGH, 28 January 1999 – I ZR 208/96, ZUM 1999, 649. Similar already OLG Zweibrücken, CR 1997, 348;
LG Düsseldorf, NJW-RR 1994, 1120 = CR 1994, 224.
381
    See above also on the right of reproduction.
                                           Thomas Hoeren-Internet Law                                     117
nated.382 In Germany there are signs of an approaching change of thought concerning com-
puter programs, where as a consequence of the implementation of the European software pro-
tection directive (§ 69 c no. 1 UrhG),383 reproductions for private use are generally prohibited.
In so far as the freedom of copying is not completely eliminated, (see above) at the very least
the rates of remuneration of § 54 d UrhG should be increased to and the circle of fee-paying
devices extended, for example to modems and personal computers. This is because the regula-
tions current until now were made at a time when digital utilization was unknown. As a con-
sequence they are no longer appropriate in a situation where millions of Internet users can
download digital copies from the Internet within seconds, which are equivalent to the original.



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Also conceivable is an extension of limitations in special cases under Cartel Law. The starting
point is Art. 82 EGV and the control of abuse practices concerning market-dominating com-
panies embodied there. In this regard, the decision of the European Court of Justice in the
matter of „Magill“ has become famous. The Court affirmed the admissibility of examining
exercise of Copyright Law rights of use in accordance with Cartel Law. In this particular case
BBC and ITV refused the Canadian publisher access to lists which contained the television
program schedule for the coming weeks. “Magill” needed the lists to put a TV guide on the
market. BBC and ITV relied on their British law Copyright concerning program lists, even
though they themselves were not active in the TV guide market. The European Court of Jus-
tice considered this to be a potential abuse of a market-dominating position.384


Apart from the “Magill” case, proceedings in matter of “IMS Health”385 are cause for think-
ing about the limits which should apply to the exercise of copyright powers in order to expand
one’s own market position and in particular to control the market. On July 3rd 2001 the Euro-


382
    Art. 2 [2] no. IV of the Danish copyright law from 1995 (text available under http://clea.wipo.int) prohibits
private digital copies.
383
    It remains to be seen if besides a harmonization of the right of private reproduction, the royalties that have to
be paid should also be harmonized; compare also the proposals for reform by Dreiers in: Schricker, Urheberrecht
auf dem Weg zur Informationsgesellschaft, p. 163.
384
    EuGH, GRUR Int. 1995, 316 = EuGHE 1995, 743 marginal note 54-56. See on this Deselaers, EuWZ 1995,
pp. 563; Bechtold, EuZW 1995, pp. 345; Götting, JZ 1996, pp. 307; Pilny, GRUR Int. 1995, pp. 956.
385
    See Frank Immenga, Das EU-Wettbewerbsrecht bedroht das Urheberrecht, in: FAZ from 9 May 2001, p. 29.
                                           Thomas Hoeren-Internet Law                                            118
pean commission published a decision according to which IMS Health, the leader of the
world market in collecting data about the distribution of medications, is obliged to grant li-
censes for its “1860 Bausteine” structure.386 This structure of data permits the division of the
FRG into distribution segments, called building blocks (Bausteine). This standard has devel-
oped into a national norm for the German pharmaceutical industry. The Commission consid-
ered the refusal of IMS Health to grant licenses for the application of its copyrighted structure
as prima facie evidence of a case of abuse of a market dominating position. The Commission
obliged IMS Health to permit use to its competitors without demanding discriminating or
commercially unreasonable conditions in return. From the point of view of the commission
the refusal of IMS Health deters new competitors from accessing the market of pharmaceuti-
cal sales data and even has the potential to cause serious and irreparable damage to IMS
Health’s competitors.387 After IMS Health lodged an appeal against the decision of the
commission, the European Court of Justice intermitted the execution of the commission’s
decision in favor of IMS Health during a temporary proceeding of judicial relief pending the
decision of the principal claim on October 26th, 2001.388 The extensive interpretation of the
conditions of an abuse of a market dominating position established in the “Magill” decision
by the commission prompted the Court to affirm prima facie evidence supporting temporary
judicial relief in favor of IMS Health.389 In the decision the commission had also affirmed an
abuse when the refusal of the license “only” blocks access to the market for the potential
The European Court of Justice however would only assume an abuse of a market dominating
licensees.
position in exercising a right when
(1) the refusal of the license prevents the development of new products or services
(2) for which there is a potential demand on secondary markets, and
(3) the object of the license factually represents the only source of the basic material that is
necessary for the development of the new product.
In the decision the court at first instance underlines the fact that the lawfulness of the new
interpretation by the commission will not be clarified until the procedure concerning the main
claim.390




386
    Case COMP D3/38.044 – NDC Health/IMS Health: Interim Measures; the decison is based on Art. 3 of the
order nr 17
387
    press release “ Kommission ordnet einstweilige Maßnahme gegen IMS Health in Deutschland an” 3. July
2001- IP/01/941
388
    decision of the Eurpean Court of Justice 1st instance, 26 October 2001, CASE-T 184/01 R
389
    decision of the European Court of Justice 1st instance, 26 October 2001, nr 100- 106
390
    decision of the European Court of Justice, 1st instance 26 October 2001, nr 102
                                           Thomas Hoeren-Internet Law                               119
 5HIRUP RI /LPLWDWLRQV"

Beside this, the limitations as a whole need to be harmonized according to a comparative legal
perspective. It cannot be right that the utilization of works is free in some countries but only
permitted where copyright royalties are paid or with the consent of the rightholder in others.
In the interests of legal certainty and trade protection a transnational harmonization of
boundaries is imperative. Because of the lack of starting points for an international solution in
the short term, a harmonization at the EU level might be the first step.
However, another problem arises which still stands in the way of an EU-wide standardization
of limitations: limitations are a minefield in terms of legal policy. Many different interests
collide within the limitation discussion. A lot of lobbyist associations have set their sights on
the exception provisions. Up until now you could rely on the “implied consent” of the classic
copyright circles which had known each other for years, met within the same circles and made
decisions pertaining to legal policy in advance within the small circle of the “family”. This
“closed shop” lost its identity-making effect in the seventies. The reason was that more and
more works were being protected by copyright law which did not belong to the category of
the fine arts. To the extent to which for example software was placed on a level with art and
literature new faces turned up in the copyright discussion and reclaimed their rights, to the
collective astonishment of the traditionalists. With digitalization the traditional circles lost
their reason to exist; the boundaries between exploiting and utilizing persons have been
blurred since then as well as the distribution of lobbyists in broadcasting stations, publishers
and music producers. On top of this is the de-territorialization of copyright law which has to
strain its territorial roots in the digital context. According to this the limitation problems are
no longer national but rather will have to be solved within the context of an international har-
monization, which increases the number of protagonists involved.


The regulations of §§ 45 UrhG make clear that the common technique of limitation regula-
tions has become questionable. Restrictions are static. They fix a historical moment in a legis-
lative process in which particular social groups successfully asserted their desire for access to
works protected by copyright law. Once made, the compromise is legally fixed for a long
time. The regulations of §§ 45 UrhG are the expression of a static, conservative society as it
existed in Germany until the sixties. Social conflicts within the fight for access to information
are solved in such a society by means of a once-in-a-lifetime decision. The regulations have
only changed to a small extent within recent years. New technologies – like software and da-
tabases – have only been admitted to the UrhG under European pressure. For this alien ele-
                                    Thomas Hoeren-Internet Law                                120
ment separate limitation regulations have been created. But people were afraid of a more fun-
damental discussion about a reform of §§ 45 UrhG.391 Also a dominant opinion developed
which was – due to personal constellations – mainly on the side of the exploiting persons.392 It
prohibited every extensive interpretation, every analogous application and every teleological
interpretation of the restrictions.393 In this the copyright doctrine approached the style of Pius
X who in 1917 prohibited the application of all “modern” interpretation methods where the
Codex Iuris Canonici was concerned – and thereby did his bit for posterity as an anti-modern
Don Quichote. In contrast, the jurisdiction on copyright law never kept to the dogma of nar-
row interpretation. In some decisions the courts even extended or completed the limitations if
necessary.394 As an example, you can refer to the decision of the BGH in the matter of cus-
toms and finance schools.395 There, the BGH saw a gap in § 52 [1] UrhG – which the litera-
ture (consciously?) ignored - and filled it by an analogous application. The senate noticed that
the regulation of § 52 [1] sent. 1 UrhG “ihrem Wortlaut und Sinngehalt nach nicht auf den
Sondertatbestand der öffentlichen Werkswiedergabe durch den Staat und seine Einrichtungen
zugeschnitten ist”396 (is not tailored to the special statutory definition of the public communi-
cation of works by the state and its institutions according to wording and essential meaning.
The legislator had not seen the problem; therefore, “sei im Einzelfall zu prüfen, ob eine ent-
sprechende Anwendung des § 52 [1] no.1 UrhG in Betracht komme“397 (it would have to be
examined in every single case whether a corresponding application of § 52 [1] no. 1 UrhG
could be taken into consideration).


In view of the above mentioned objections the question arises whether a new limitation sys-
tem should take the place of an enumerative “exception”-catalogue. For this a “mega limita-
tion” would be necessary which was dynamic enough to cushion technical or economic de-
velopments appearing in the future.398 The USA makes use of the restriction of “fair use” (§


391
    See the general considerations by Fechner, Geistiges Eigentum und Verfassung, 1999, 475, but who argues
exclusively on behalf of the exploiting persons.
392
    Like this rightly Schack, Urheber- und Urhebervertragsrecht, Tübingen 1997, no. 480, who explains the
closed catalogue of §§ 45 by the political powers of assertation of certain interests of exploiting persons.
393
    See only Fromm/Nordemann, UrhG, 9th edition 1998, Vor § 45 marginal note 3; Schricker/Melichar, Ur-
heberrecht, 2nd edition 1999; Vor §§ 45 marginal note 15 and 16 with further references. The courts did not fol-
low this opinion but always took the possibility of an extensive interpretation into consideration; see for example
BGH, GRUR 1987, 362 – Filmzitat; GRUR 1994, 45, 47 – Verteileranlagen, as well as BGH 25 February 1999
with annotation by Hoeren, MMR 1999, 665 – Kopienversanddienst.
394
    See also the considerations by Bornkamm, Festschrift für Piper 1996, 641.
395
    GRUR 1983, 562.
396
    GRUR 1983, 562, 564.
397
    GRUR 1983, 562, 564.
398
    Also Schack seems to think in this direction; see the same person, Urheber- und Urhebervertragsrecht, Tübin-
gen 1997, Rdnr. 481.
                                           Thomas Hoeren-Internet Law                                           121
107 USC). “Fair use” is determined according to the purpose of utilization, especially whether
it is commercial or not, the kind of protected work concerned, how much of it is used and
what economic consequences the utilization will have. The European commission (uncon-
sciously) went in a similar direction with the database directive. The directive is the source of
§87e UrhG. According to this agreements to exclude a utilization of parts of the database
which in terms of nature and extent are not considerable are void if the restricted actions are
neither contrary to a normal utilization of the database nor interfere with the legitimate inter-
ests of the database producer. Similar to this § 87 b UrhG allows the free utilization of non-
considerable parts of a database if the utilization neither interferes with the legitimate interests
of the database producer nor is contrary to the normal utilization of databases. As far as this is
concerned a provision from an international agreement – namely Art. 9 [2] RBÜ – has been
implemented into the national law.399 With this the way could become open to admit a mega -
limitation in single cases – beyond the database law. Every utilization of works which neither
interferes with the legitimate interests of the right holder nor is contrary to the normal utiliza-
tion of the work should be permitted without the consent of the right holder.400 This provision
ensures the participation interest of the author in the same way as it does the access interest of
the public. The formulation is dynamic and open for a judicial decision in a particular case
which can independently weigh the interests of all persons concerned. As a matter of fact, the
judiciary has shown no reluctance concerning this single case jurisprudence. As the BGH al-
ready mentioned in the above decision concerning customs and finance schools, reasons of
general welfare can justify an extra-legal limitation if these reasons “bei Beachtung des
Grundsatzes der Verhältnismäßigkeit der Vorrang vor den urheberrechtlichen Interessen ge-
bührt”401 (take priority over the copyright interests in compliance with the principles of rea-
sonableness). However in that case the court of appeal “hat keine Umstände festgestellt, die
einen derart starken sozialen Bezug haben, dass sie Vorrang vor den Urheberinteressen bean-
spruchen können“ (did not see any circumstances which had such a deep social reference that
they would take priority over the interests of the author). With this the BGH opened a gap for
a weighing of interests in particular cases which does not grind to a halt before the static bar-
riers of §§ 45 UrhG.



399
    See also Art. 5 [4] of the changed proposal for the reform of copyright law within the information society of
21         May          1999,         KOM          (1999)        250         endg.,        available       under
http://europa.eu.int/comm/internal_market/en/intprop/intprop/copy2de.pdf.
400
    Concerning the influence of Art. 9 [2] RBÜ on the national limitation regulations compare also Walter, Me-
dien und Recht 1997, 309.
401
    GRUR 1983, 562, 565.
                                          Thomas Hoeren-Internet Law                                         122
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The numerous author’s rights affected by online-utilization make meaningful utilization of the
Internet very difficult. If content providers wish to establish a digital image or music data base
they may need the consent of thousands of authors depending on storage capacity. Hence, for
the production of a CD-ROM to celebrate the 100th birthday of the composer Carl Orff the
music publishers had to obtain more than 800 copyrights.402 If not for the copyright collecting
societies which exercise these rights in trust403 the content-provider would have to negotiate
with every single authorized person. The use of multimedia would be impossible from the
outset. The idea of a one-stop-shop is the obvious thing to do, a single “shop for digital
rights”. Not long ago the copyright collecting societies considered opening a “business” like
this. The “Clearingstelle Multimedia für Verwertungsgesellschaften (CMMV)” was establis-
hed. But this project is not being pursued at the moment because the copyright collecting so-
cieties could not agree on common standards for the allocation of rights. According to their
contract only the GEMA and (with restrictions) the VG Bild-Kunst are able to allocate digital
rights by means of the CMMV. There are also difficulties concerning the technical coordina-
tion of the data preparation. The best known example of a copyright collecting society is the
GEMA seated in Munich and Berlin. Anyone who wants to play recorded music at a club
party, or to delight shop customers with background music has to pay a fee to the GEMA. The
GEMA (Gesellschaft für musikalische Aufführungsrechte) allocates the money to the


402
   Möschel/Bechthold, Copyright-Management im Netz, MMR 1998, pp. 571.
403
   The contract between the author and the copyright collecting society establishes a trust relationship through
which the trustee receives the exclusive right of utilization and exploitation; compare LG Köln, ZUM 1998, 168
seqq.
                                          Thomas Hoeren-Internet Law                                         123
rightholders after deducting their administrative charges. Similar associations exist for other
kinds of work. The VG Bild-Kunst (seated in Bonn) safeguards the rights of performing art-
ists, photographers and film authors. The VG Wort (seated in Munich) is responsible in par-
ticular for rights pertaining to literary, journalistic and scientific texts. Music producers and
musicians are united in the “Hamburger GVL” (Gesellschaft zur Verwertung von Leistungs-
schutzrechten). Unclear is the situation for film producers who can choose between four dif-
ferent copyright collecting societies.


Now the question arises as to how far the copyright collecting societies are responsible for the
digitalization of works. To begin with the copyright collecting societies receive their equip-
ment charge according to §§ 54 and 54 a UrhG. This is a charge which has to be paid by pro-
ducers of equipment intended for private-use reproductions. Beyond this legal claim to copy-
right royalties the powers of copyright collecting societies depend on the contracts the socie-
ties have made with the rightholders.



 *HPD

The GEMA (collecting society for music) has had the “rights of recording onto sound and
image carriers and the copyrights and distribution rights of sound and image carriers” trans-
ferred to itself. Partly it is assumed that floppy disks with sequences of music should be seen
as a sound carrier. The integration of music into a CD-ROM-stored multimedia product is
similar to recording onto an image carrier. Therefore the GEMA alone would be competent to
award rights. But this assumption is not correct. The clause mentioned relates only to the un-
changed adoption of a complete piece of music into image/sound carriers. Every editing, al-
teration or abridgment leads therefore to the non-applicability of the clause.404 But the digi-
talization of music for multimedia purposes must be seen as a procedure that is similar to the
making of a film. The multimedia combination of text, image and sound leads to a work that
gives the impression of moving pictures. In this way a multimedia product fulfills – according
to case law – the conditions to be assessed as a work similar to films. But the GEMA is nei-
ther directly nor the only entity to have the filming competence. Before awarding the so-
called synchronization rights (see below) the GEMA has to inform right holders about the
inquiry from the multimedia producer. The right holders then have 4 weeks time to consider if


404
   See comprehensively Schulze, Teil-Werknutzung, Bearbeitung und Werkverbidung bei Musikwerken –
Grenzen des Wahrnehmungsumfanges der GEMA, ZUM 1993,255, 261.
                                     Thomas Hoeren-Internet Law                               124
they want to avail themselves of their rights and negotiate with the producer. If they do not
react within this period the GEMA is entitled to commence negotiations with the producer.


Meanwhile the GEMA also administers online rights. According to the amended membership
agreement decided on at the general meeting in June 1996, the GEMA now has the right to
“bring in music works in databases, documentation systems or in similar carriers”. Should
music now be broadcasted over the internet, remuneration must be paid (only) to the GEMA.
Beside the complete use of music the membership agreement also regulates the combination
of music with other works, so-called synchronization. The GEMA is competent if music is
combined with “works of other genres on multimedia and other data carriers or in databases,
documentation systems or similar carriers with the possibility of an interactive usage”. The
GEMA commits itself in these cases to inform rightholders about every inquiry for online
synchronization. They then have 4 weeks time to decide to avail themselves of their rights. If
they do not, the GEMA is finally entitled to award the synchronization rights. Since July 2001
the GEMA has had online charging rates which gear to a lump sum (percentage in case of
profit; otherwise minimum amount) for every music title that is fed into the online system. In
detail these charges are


    • VR-W1: Use of works of the GEMA-repertoire on websites for presentation purposes
    • VR-W2: Use of works of the GEMA-repertoire on websites of “electronic commerce”
    • S-VR/IntR: Use of works of the GEMA-repertoire by broadcasters of internet radio
    • VR-OD1: Use of works of the GEMA-repertoire for the on-demand downloads of cell
          phone ring tones.


The most important charge (VR-W1) is assessed according to the page impressions. For up to
10.000 page impressions a remuneration of ¼ SHU PRQWK LV GXH 7KH SOD\LQJ WLPH LV Ds-
sumed to be 5 minutes per work at most. For use on private websites the charge per work is
¼ SHU \HDU RQ WKH EDVLV RI  SDJH LPSUHVVLRQV DW PRVW 7KH VHFRQG RQOLQH FKDUJH 95-
W2) is applicable only if the website contains offers of e-commerce. E-commerce is every
offer of goods or services via a website. For the area of pre-listening (up to 45 sec.) the charge
is ¼ SHU  ZRUNV SHU \HDU DV ORQJ DV LW FRQFHUQV ZHEVLWHV ZLWK OHVV WKDQ  SDJH
impressions. But the GEMA-charges do not regulate the important area of music download
itself.



                                    Thomas Hoeren-Internet Law                                125
It must be borne in mind however that the GEMA does not administer the ancillary copyrights
of the artists and sound carrier producers. These are administered by the GVL which inten-
tionally did not receive entitlement to administer online rights. Also, in as far as the big music
companies are members of the GEMA, there was no transfer of the administration of rights.
Further problems come up with the administration of rights of foreign right holders because
the evidence proving legitimacy is difficult. Because of a complaint by the CTL-UFA to the
EU-Commission the GEMA is caught in the crossfire of antitrust criticism, particularly con-
cerning the awarding of digital rights.405



 9* :RUW

The legal situation is quite different for the other collecting societies. According to § 1 no. 17
of the membership agreement of the VG Wort (collecting society for texts) the right holder
transfers “the right to reproduce and disseminate contributions on digital offline products (e.g.
CD-ROMs)…” to the VG Wort in order to administer the rights; this concerns only the ad-
ministration of old rights, i.e. the adoption of old works in CD-ROM products. In May 1998
an amendment was passed which stated that the VG Wort now has the right according to § 1
no. 18 of the membership agreement to reproduce works via Pay-TV, TV-on-demand, Pay-
per-view or similar facilities. The right to use a text on an internet homepage remains in the
hands of the right holder.406


Beyond that the VG Wort administers the previously mentioned remuneration for private cop-
ies. But it is not clear which is the chargeable device for digital copies. Here it must be distin-
guished between the remuneration for sound and video recordings (§ 54 UrhG) and different
copy devices (§ 54a UrhG). A charge can be imposed to the producers of laser copy ma-
chines; also scanners are chargeable according to a decision of the German Patent Office.407
With its order of 4 May 2000 the arbitration office decided that CD-Writers are also charge-
able in general. A charge of 17,- DM was assumed by the arbitration office. At the moment
there is a suit filed at the LG Stuttgart concerning this. The agreement of December 2000
which was settled at the Regional Court according to which a charge of 12,- DM per Writer
must be paid was meanwhile canceled by the defendant device producer. A charge for PCs
and printers is also being considered by the VG Wort. In December 2000 a corresponding

405
      See FAZ of 18. December 2001, p. 15.
406
      See Melichar, Schöpfer vorbestehender Werke aus Sicht der VG Wort, in ZUM 1999, 12, 15.

                                          Thomas Hoeren-Internet Law                            126
charge was published which provided a charge for PCs to the amount of 23,- DM because of
§54 UrhG and 60,- DM because of § 54a UrhG. Beside this controversial area the VG Wort
cannot control the dissemination and the public reproduction of digitalized texts.



 9* %LOG.XQVW

The VG Bild-Kunst (collecting society for pictures) also for a long time did not have the right
to control the digitalization of protected works. At last in June 1994 the membership agree-
ments were changed so that the digital rights of artists of fine arts (painters, architects) were
administered by the collecting society.
The VG Bild-Kunst was able to convince photographers for the educational sector to have
their digital rights transferred to it. According to the new membership agreement the photog-
rapher transfers the “rights for digital use after the first publication and use for scientific pur-
poses or for educational use and for non-commercial educational use”. But according to the
membership agreement it must be ensured that no commercial purposes are pursued, that the
respective photographer is quoted in every use and that the pictures are not distorted in their
digital form. The right to take action against any distortion was also transferred to the collect-
ing society. But photographers can fetch back all rights in connection to a specific case at any
time. This amendment of the membership agreements extends to all existing and future pho-
tos. The members of the VG Bild-Kunst were granted the opportunity to file an objection to
the extension of the power within 6 weeks. If they did not, all existing contracts with the VG
Bild-Kunst were automatically extended. For new members the membership agreement is
applicable in its new version.


The changes in the film area are dramatic. In September 2001 the VG Bild-Kunst radically
changed the membership agreement for professional group III. Professional group III are film
authors and some film producers. On the basis of the amendments in § 1 lit. 1 (and j) the VG
Bild-Kunst had the following rights granted:
           i) for authors the right to digitalize audiovisual works that were produced in analogue
           and to send, broadcast or transfer them by any other electronic means.
           j) for authors the right to store audiovisual works in databases and the right to transfer
           these stored works from these databases by electronic means. These rights fall back to
           the author if the user conceded that on the basis of collective agreements.

407
      Printed (amongst others) in ZUM 1996, 909.
                                          Thomas Hoeren-Internet Law                             127
Through this amendment the VG Bild-Kunst has extensive authority to administer the rights
regarding the later digitalization of analogue film material. In addition there is a right to use
films in databases. Here it must be considered that the term “database” refers to §87a UrhG.
Therefore it includes every collection of information material including the feeding into on-
demand-services. After the literature pointed out the remarkable extension of rights there were
intense arguments between the public broadcasting stations, especially ZDF, and the VG
Bild-Kunst. This was because parallel to this extension of rights the broadcasting stations be-
gan to get authors and producers to transfer their digital rights. These were necessary in order
to offer new television services in digital form. In part, the granting of digital rights influ-
enced the negotiations with “EG Medien” which have now lasted for quite a long time and
still have not yet come to an end. The broadcasting stations were understandably surprised,
because due to the secret activities of the VG Bild-Kunst they faced unexpected problems.
Now directors and some producers said that they were not able to transfer digital rights to the
broadcasting stations because these rights now lay with the VG Bild-Kunst. The situation be-
comes even more complicated because the producers e.g. in the documentary film area estab-
lished an own stock company for the administration of their digital rights. This mess makes
the question of the rightholdership concerning digital rights almost impossible to answer.
On the date of 10. January respectively 23. January 2001 the VG Bild_Kunst and the ZDF
signed an internal demarcation agreement. The agreement emphasizes the different ways of
purchase of the collecting society VG Bild-Kunst and the ZDF. It is made clear that both par-
ties claim the right for on-demand use and reproduction of audiovisual works. Further the
agreement states:
       “3a.) Regardless of the existing different legal opinion on the extent of the reproduc-
       tion right that was granted to the ZDG according to no. 2a.) both parties agree that
       special demands against the ZDF cannot be derived from the digitalization of analo-
       gously produced works with the simultaneously granted rights of use.
       3b.) As far as the VG Bild-Kunst administers rights that were also granted to the ZDG
       according to no. 2b of this agreement the granting to the VG Bild-Wort is applicable
       only if the corresponding granting to the ZDG is not the subject of collective or single
       agreements which grant the author an appropriate remuneration.
       4. For the demarcation of future granting of rights the parties will consider this agree-
       ment as a guideline.”



                                   Thomas Hoeren-Internet Law                                128
The regulations concerned are incompatible with the model activity of a collecting society.
This results from no. 3a). Here the collecting society declares a waiver of the administration
of rights regarding the digitalization of analogously produced films. According to § 6 German
Copyright Administration Act collecting societies must administer rights under appropriate
conditions. It is doubtful if the complete waiver of any remuneration is covered by that. Even
more problematical is the regulation of no. 3b.). Here the dogmatic borders of the acquisition
of rights as defined by § 398 BGB must be considered. The meaning of “the granting to the
VG Bild-Wort is applicable only” must be clarified. If a limitation of the cession of rights
between collecting society and author is meant then a corresponding alteration of the mem-
bership agreement is necessary. At the same time rights transferred already must be re-
transferred to the author or transferred from the collecting society to the ZDF. The combina-
tion of the cession of rights and the appropriate remuneration in collective or single agree-
ments is unusual. It is astounding that the ZDF on the one hand emphasizes in the reform of
copyright contract law that there cannot be an appropriate remuneration. But here the ZDF
eagerly agrees with appropriate remuneration. This can only be understood in the sense that
the ZDF obviously gave up its internal opposition to the principle of appropriate remuneration
and accepted the practicability of such a guiding principle. Dogmatically, the combination of
cession of rights and appropriate remuneration is highly difficult. Nobody knows in which
cases the ZDF has the rights. Here the prior question of the appropriate remuneration must be
clarified first. As long as this has not happened (if necessary with the help of courts) there is
legal uncertainty concerning the rightsholdership in the digital area. In this regard it is a pity
the contracting parties did not talk to the rights holders themselves and integrate wide circles
of contributors into the discussion. The future of the digital use of films and other audiovisual
works remains to be seen because of and despite this demarcation agreement.



 5HIRUP FRQVLGHUDWLRQV

The whole legal situation concerning collecting societies is therefore generally unsatisfac-
tory.408 Neither the content provider nor the author nowadays knows when a collecting society
has jurisdiction for digitalization. This legal uncertainty can be very expensive for both sides.
A producer might think that he owns the rights because of an agreement with the author,
though the latter already transferred the rights wholesale to the collecting society. In such a


408
  See also the critique by Karnell, Die Verwertungsgesellschaften in einem zusammenwachsenden Europa, in:
Gewerblicher Rechtsschutz und Urheberrecht 1991, 583.
                                        Thomas Hoeren-Internet Law                                  129
case the producer has to pay to the collecting society again and the author is strictly liable for
all damages that result from the defect of title. Here the collecting societies have to react: The
membership agreements must be altered so that they include all kinds of digitalization of
works. But this contract extension must be approved by the authors. So the appeal is ad-
dressed to the rightholders too: the collecting societies guarantee an effective administration
of rights in the authors’ favor. Therefore it is the authors’ interest to commission the GEMA,
VG Wort and VG Bild-Kunst with the administration of rights which they can hardly enforce
effectively themselves. Without collecting societies no multimedia, without collecting socie-
ties no money – this general rule should be agreed on by all concerned parties in the future.


The European Commission is already alarmed by this development. At present legal experts
are examining if and how content providers can be helped in this area. An extension of the
rights administered by the collecting societies to filming is conceivable. But this should raise
massive criticism from authors and persons entitled by neighboring rights; besides a legisla-
tive measure would additionally be necessary. Besides this, technical solutions for an efficient
license management are under discussion (so-called Electronic Copyright Management Sys-
tems – ECMS).409 The first models from Japan for a digital system of transferring licensing
rights parallel to a digital image transfer have appeared.410 Similar solutions are being dis-
cussed by the Commission unter the keyword CITED.411 In Great Britain and France there
exist the first experiments in combing electronic licensing with the exchange of documents.412
The considerations of the World Intellectual Property Organization (WIPO) on the implemen-
tation of a worldwide identification code are important too.413 With the help of this code it
would be possible to recognize every digital work immediately and to take action against the
adoption of it. Digital watermarks are very promising, which combine the work inseparably
with an author and licensing reference and make it possible to find works on the internet with
search engines. The comprehensive implementation of such electronic authoring and protec-

409
    S. Möschel/Bechthold, Copyright-Management im Netz, in: MMR 1998, 571.
410
    See also Institute of Intellectual Property (ed.), Exposure ’94 – A proposal for the new rule on intellectual
property for Multimedia, February 1994 (Internal Paper); Mori/Kawaharii, Superdistribution: The Concept and
the Architecture, in: The Transactions of the IEICE, July 1990, 1133.
411
    See van Slype, Natural Language Version of the Generic CITED model. Volume I: Presentation of the ge-
neric model, Internal Draft Report (Version 3.0), Luxembourg September 1993; E.Menard & J. Schulze, Defini-
tion and specification of the CITED model, Version 3.2., November 1992; Cornish, Copyright Management of
Document Supply in an Electronic Age, in: Interlending & Document Supply 21 (1993), no. 2, pp.13-20.
412
    See also the considerations on the COPYCAT-model in the area of education and training: Barrow, The
Copycat Problem, 14 March 1994, Draft; Din Ghani, Copicat Enterprise Modelling, 31 March 1994, Draft.
413
    The project was described by Laurence Guedon (APP) at a WIPO symposium at the Harvard University in
June 1993; see the WIPO Document INS/CM/94/1, p. 12 (at no. 35). See generally for the considerations of the


                                         Thomas Hoeren-Internet Law                                          130
tion systems will depend on the interoperability of these systems and measures amongst each
other. The decisive factor will be to what extent such systems can provide protection against
actions like bypassing, violation or manipulation.414 The most important regulations to har-
monize the protection of technical measures and information for the administration of rights
in future are art. 6 and art. 7 of the amended proposal for a directive of the European Parlia-
ment and the Council on the harmonization of certain aspects of copy law and related protec-
tion laws in the information society of 21 May 1999.415


Which solution will prevail remains to be seen. Every content provider is faced with almost
insoluble problems as long as he or she uses anything other than just internal material. The
green book which was published on 19 July 1995 contains further proposals by the European
Commission on the protection of intellectual property in the information society416. The EU
suggests amongst other ideas the establishment of “central offices”417 or “Clearing
Houses”418. As it follows from the Green Book and especially the following document “Initia-
tives on the Green Book on copyright law and related protection laws in the information soci-
ety”419 of 20 November 1996 the EU-Commission at the moment does not intend to regulate
but to leave the creation of such central offices to the market.420 There is broad discussion on
the proposals of the EU, but that will not be discussed here. Furthermore, within the frame-
work of the INFO 2000-program the EU supports several projects which deal with Multime-
dia Rights Clearance Systems (MMRCS). For example in the MMRCS-project “VERDI”421
the clearing offices or the collecting societies which founded such clearing offices from &
different EU Menber States were brought together in a pilot project to form a joint legal in-
formation and licensing service.422




WIPO in this area the conference proceedings by Dreier, Copyright and Digital Technology, in: IIC 24 (1993),
481.
414
    For more information see Kaestner, Law and Technology Convergence: Intellectual Property Rights, ECLIP
(Electronic Commcerce Legal Issues Platform) Deliverable 2.2.2., available at http://www.jura.uni-
muenster.de/eclip/.
415
    COM (99) 250.
416
    COM (95), 382 final.
417
    Green book p. 75.
418
    Green book p. 76.
419
    Announcement COM (96) 568 final.
420
    Announcement COM (96) 568 final, p. 26.
421
    VERDI stands for “Very Extensive Rights Data Information”, see http://www.verdi-project.com.
422
    Schippan, Die Klärung von „Multimediarechten“ in Europa – das VERDI-Projekt und andere von der EU-
Kommission unterstützte MMRCS-Projekte, in ZUM: 1999, 135 seq.
                                        Thomas Hoeren-Internet Law                                      131
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Previous to a conclusion of a contract with right-owners, there is a list of due-diligence con-
siderations to be taken into account; for example the following:


   • Which works are to be included?
   • What are the included works made of (sounds, lyrics, pictures)?
   • How many parts of the work are to be taken over?
   • Is the work taken over as it is or in a different form?
   • Will coloration-, sampling- or scanning techniques be used?
   • Are there any trademarks on the works?
   • Which rights do I need (duplication, treatment, distribution, public reproduction)?
   • Who is the owner of the rights (performing rights societies, publishing companies,
       agencies)?
   • Is it possible to fall back upon statutory licenses/compulsory licenses?


The following check list for the project planning are based on these questions:


a) The homepage

   • Type of homepage and expected „lifespan“
   • Projects in competition
   • Title of the product (domain)
   • Accompanying products
   • Technical platform
   • The capacity needed for the storage of data


                                   Thomas Hoeren-Internet Law                              132
b) Participants in the project

   • Names of participants
   • Participation of outside persons
   • Rights in the final product
   • Restraint of competition


c) Contents

   • Which works should be incorporated?
   • Elements of the works
   • Planned changes, reductions and translations
   • Fiction/non-fiction
   • Photographs by contemporary witnesses
   • Rightowner (synchronic/diachronic)
   • Compensation (royalty, minimum payments)


d) Financing

   • Types and risks of financing
   • Financial requirements and expected profits (minus license fees etc.)


e) Termination of the project

   • Circumstances of the termination
   • Implications of license periods and competition prohibitions
   • Remaining rights



 7KH GHPDUFDWLRQ RI ULJKWV RI XVH

Copyright is not transferable (§ 29 s. 2 UrhG). This corresponds to the Continental- European
idea of copyright, which provides that the protection of creativity is an inalienable human
right. The United States and Great Britain treat this element of the idea differently; according
to the „work-for-hire“-doctrine or through “assignment“ the copyright can be transferred to a
third person as well. Anglo-American contracts need to be differently interpreted if German
law is applicable; the assignment of copyright is regularly constued as a granting of an exclu-

                                    Thomas Hoeren-Internet Law                              133
sive right of use. Therefore contractual terms which transfer the copyright to the producer are
meaningless. They should be avoided.
According to § 31 [1] UrhG the right-owner can only grant rights of use. These rights contain
the authority to use the work in all or only in a few of its types of use. They do not contain the
copyright itself or the moral rights of the author (see below).


a) Non-exclusive versus exclusive right of use

The law grants the choice to the producers. They can require an assignment of a non-
exclusive or an exclusive right of use (§ 31 [1] s. 2 UrhG). The owner of a non-exclusive right
of use can use the work besides other obligees (§ 31 [2] UrhG). He or she does not have indi-
vidual rights of defense against infringements of the copyright; to be able to sue someone au-
thorization by the rightowner is necessary (in German procedural law this is called „Pro-
zeßstandschaft“ which means that someone obtains the capacity to sue or be sued in one’s
own name without being directly involved in the subject matter of the action). He or she only
has a right based on the contract (relative right), which does not protect against actions by
third persons.
The exclusive right of use on the other hand, entitles the owner to exclude any third person,
even the owner himself, from the type of use granted and makes it possible for him or her to
grant non-exclusive rights of use. The owner of an exclusive right of use is entitled to bring an
action against infringements of the copyright independently (as is the creator too). This right
to sue includes the right of action against the creator if he or she interferes with the rights of
the owner.
In every single case, the type and extent of the legal position of the producer depends on his
or her economic power. Producers will rarely be in a position to demand the granting of ex-
clusive rights of use by the creator. This is justified only if the agreement with the rightowner
contains the production of individual, custom-made materials. In this case the creator should
be prevented from assigning the rights in the material to third parties. Besides, huge enter-
prises always manage to claim exclusive rights of use generally; for instance for the creation
of a homepage ("The creator grants X an exclusive, temporally and spatially unlimited right
of use for the utilization of the material in every form"). The literature has always criticized
these general clauses.423 But the lengthy and long overdue reform of Copyright Contract Law
is still pending.


423
      Hoeren, CR 1996, 84.
                                    Thomas Hoeren-Internet Law                                134
b) Temporal and spatial limitation

The license contract should lay down the temporal and spatial limits. According to § 32 UrhG
it is possible to grant the right of use with a limitation in space, time or content. For producers
it is best if the transferred rights of use are unlimited in time. Otherwise they take the risk that
at the end of the time period the rights will automatically terminate and they therefore will no
longer be able to use the finished product commercially. Then they would have to negotiate
with the owner of the rights once again, which is usually connected with a rise in price of the
rights. However the transfer of unlimited rights depends on the economic power of the enter-
prise. If the producer is not a market leader, it will have to pay through the nose to get unlim-
ited rights.
According to § 32 UrhG the right of use can also be granted with a spatial limitation. Similar
to the time limit, it is of course most favorable for producer to obtain the spatially unlimited
use of the material. This is especially important for online-use, because in this area spatial
limitations make no sense. Rather it makes more sense to set limits according to language
versions (for instance referring to a German- or English homepage).


c) “Purpose-oriented assignment” (§ 31 [5] UrhG): listing of rights to be trans-
ferred

Subsequent to the general definition of the right of use intended to be transferred, there fol-
lows a model listing of the rights included („In particular“-clause). This results from § 31 [5]
UrhG. The purpose-oriented clause which is embodied in § 31 [5] UrhG says that if the con-
tract is not formulated properly, the scope of the right of use depends on the purpose it was
granted for. In this way this is a „carelessness regulation“. If the rights of use are not fixed in
the contract in detail, the court defines the scope of the rights according to the contract’s pur-
pose. § 31 [5] UrhG therefore means that the central rights of use in license contracts are al-
ways separately specified in an exemplary („particular“) way. So it is that the delivery of
press photos to a daily newspaper regularly does not contain any internet rights.424
The UrhG grants creators several exploitation rights: according to § 15 [1] UrhG they have
the exclusive right to exploit their work in material form. The right comprises especially the
right of reproduction (§16 UrhG), the right of distribution (§ 17 UrhG) and the right to exploit
the workings of the product (§ 23 UrhG). Furthermore only creators are allowed to reproduce


424
      KG, Urteil vom 24. Juli 2001, K&R 2002, 148 with comments by Welker 154
                                          Thomas Hoeren-Internet Law                            135
their work in public in an immaterial form (right of public communication; § 15 [2] UrhG).
For the production of a homepage some rights have to be especially highlighted and described
in detail, among them the right:


       • to reproduce the material completely or in parts on picture or sound storage media and
           to load them for the purpose of digitalization into the main memory
       • to reproduce the material in public via providers (FTP, WWW, Gopher) and comparable
           call services or to make the material available to a multitude of users
       • to distribute the material, especially for sale, for rent, lending or giving away in another
           way (important for the block on CD-Rom exploitation)
       • to carry out cutting, shortening and other changes to the material which are necessary or
           considered as desirable for technical reasons in consideration of the requirements of
           the market
       • to recreate the material, to shorten it or to transfer it to another form of work under the
           maintenance of possible moral rights of the author
       • to make use of the material for fairs, exhibitions, festivals and competitions as well as
           for the purpose of examinations, teaching and research
       • to produce, to distribute and to send parts, summaries, picture material and trailers up to
           a length of three minutes for the purpose of advertisement
       • to survey an adaptation of the material made by the licensor or made on behalf of the li-
           censor


d) Further assignment

According to § 34 [1] s. 1 UrhG a right of use is only allowed to be transferred with the con-
sent of the rightowner. The rightowner is not allowed to refuse consent in breach of good faith
(§ 31 [5] s. 2 UrhG). In this way harassment and other discrimination of the licensee shall be
avoided. Rightowners can waive their right of consent completely or partially. However, the
granting of rights of use in itself can contain an implied consent to a further assignment to a
third party. The problem lies in the question of whether the consent requirement can be con-
tracted out of by terms and conditions of business. The BGH refused this in one of its deci-
sions425 with reference to § 307 [2] No. 1 BGB (former: § 9 [2] Nr. 1 AGBG).




425
      GRUR 1984, 45, 52 - Honorarbedingungen
                                        Thomas Hoeren-Internet Law                               136
e) Non-use and rights of revocation

Contractual provisions referring to the non-use of rights of use originate from the area of cin-
ema and television. Licensees should not be obliged to employ the given material. Within a
multimedia production, they must be free to choose a suitable object from all the available
photos or parts of music and they must be free not to use their rights in the other objects. This
provision is also necessary for restrictive licenses. For example, if online-rights have been
transferred to the licensee for the purpose of preventing possible use by the licensor (see
above), it has to prevent the possibility of being sued for the marketing of the online-rights.
However the statutory provision is treacherous. The reason is that with the transfer of an ex-
clusive right of use, the right of revocation by reason of non-exercise (§ 41 UrhG) is regulated
at the same time. According to § 41 [1] s. 1 UrhG in the case of an exclusive license, the li-
censor is able to revoke the right of use if the licensee has not or only insufficiently exercised
the right and thereby violated legitimate interests of the creator in a relevant way. However,
since the assignment of the rights of use two years have to have passed; in addition a further
appropriate period of time for an exercise has to be set (§ 41 [2] s. 1, 3 UrhG). Contractually
the right of revocation is a problem because it cannot be waived in advance. (§ 41 [4] s. 1
UrhG). The licensee can only exclude the exercise of the right for a period of five years (§ 41
[4] s. 2 UrhG); hence the licensee can prolong the period of time for the economic use of
rights up to a length of over seven years (two years of non-use + additional period of time +
five years of waiver of exercise). But anyone who includes a provision for the right of revoca-
tion in a contract is “waking up sleeping dogs”. Many rightowners do not know anything
about the right of revocation; the existence of such a right would only be brought to their
knowledge by the contract. Because of this, the practice requires balancing between the risks
of accidentally informing the owner of the right and the importance of prolonging the time-
limit.


f) Royalties

In practice a fixed scale for the use of digital rights has not become habit yet. Standard com-
pensations are not known. This is why the amount of compensation and the basis of compen-
sation have to be fixed regularly and individually. The first point is not subject to control ac-
cording to §§ 307 – 309 BGB. Only the criteria of evaluation are controllable. In classic copy-
right law however, a range of different compensation models have become habit, which can
be used profitably for the online-area as well. For the use of finished works evaluation accord-
ing to fixed prices has prevailed. The rightowner receives a fixed sum that covers all usages.
                                    Thomas Hoeren-Internet Law                                137
Conceivable would also be an agreement about a percentage participation in the net gain or
the net proceeds of the producer. But this requires that the online-service actually be intended
to bring in a return. It has to be taken into account that the creator is entitled to a right of addi-
tional compensation in certain cases
(§ 36, 90 UrhG)426. Where there is an agreement about a percentage participation there should
be an accounting duty as well as a right to examine combined with a provision for the appor-
tionment of costs.


It must be taken into consideration that at the moment the Federal Ministry of Justice is plan-
ning to fundamentally change Copyright Contract Law.427 On May, 22nd, 2000 a small circle
of copyright lawyers delivered a proposal for a bill that is supposed to strengthen the contrac-
tual position of creators and exercising artists. This proposal was slightly changed one more
time in the summer (status: August, 17th, 2000). On May, 23rd, 2001 a ministerial draft was
published.428 Already by May, 30th, 2001 the corresponding cabinet draft followed, though it
did not differ from the ministerial draft. On November, 19th 2001 and January, 14th 2002 the
Ministry spread internal „formulation aids“ in which the existing plans concerning Copyright
Contract Law are widely given up. The compromise paper of January 2000 was the basis of
parliamentary deliberations; on January 25th the bill was passed by the “Deutscher
Bundestag”. After the official publication of the statute429 it came into operation four months
later on July 1st 2002.430


The place of the statutory claim which was originally planned in the bill to be directed against
every user has now been taken by a claim against the contracting party only, whereby the au-
thor can demand consent to an appropriate increase of the compensation if the compensation
is not adequate. (§ 32 UrhG). The adequacy of compensation will be affirmed if and as far as
the compensation corresponds to a respectable standard within the industry. Different from
the initial concepts, the present text does not provide for a (sole) assignation to exploitation
right societies anymore. As for the right of correction, a three year limitation period intro-
duced through the modernization of the law of obligations is now applicable. The planned


426
    See on this also BGH, ZUM 1992, 14 – Horoskop-Kalender; LG Oldenburg, CR 1995, 39.
427
    See on this also Däubler-Gmelin, GRUR 2000, 764; Reber, ZUM 2000, 729; Schricker, Editorial MMR
12/2000; von Olenhusen, ZUM 2000, 736. Critically see Ory, Rechtspolitische Anmerkungen zum Urheberver-
tragsrecht, ZUM 2001, 195.
428
    The ministerial draft is available at http://www.ory.de/uvr/refe.pdf.
429
    The statute meant to strengthen the contractual position of originators and exercising artists has been prom-
ulgated in the Federal Law Gazette (Bundesgesetzblatt) I Nr. 21 pp. 1155 – 1158, 28th March 2002.
430
    The text is available at http://217.160.60.235/BGBL/bgbl1f/bgbl102021s1155.pdf.
                                             Thomas Hoeren-Internet Law                                       138
right to cancel after 30 years has been dropped. The right to correction for an adequate com-
pensation shall not exist in the employer-employee-relationship if the compensation for the
use of the works is regulated under a collective agreement. In addition to the ex ante correc-
tion of compensation, an improved best-seller-paragraph shall be implemented to guarantee
an adequate participation of the creator in the case of exceeding success ex post.
If the parties are not able to agree about a concerted rule of compensation, an arbitration body
ought to decide (§ 36 UrhG). This body is based on the arbitration committee of the “Be-
triebsverfassungsgesetz” (Works Council Constitution Act) and in this way it incorporates the
expert knowledge of the industries. A compensation that is established according to concerted
rules of compensation is not binding. The planned spurious retroactive application of this rule
to contracts which were concluded in the past 20 years shall be waived in the interest of legal
certainty. Instead, in future exploitations of all prior contracts there shall be a fair retroactive
charge in the form of a new best-seller-paragraph.


The possibilities for controlling exploitation contracts through general terms and conditions
have been deliberately excluded from the bill. The protection of the creator and other creative
persons, who are weak in the market, can be arranged best and in the most simple way by
§ 307 BGB, as it was recently shown by the LG Frankenthal and the OLG Zweibrücken con-
cerning a conflict between music publishers and the ZDF. The move toward control of con-
tent through the law of general terms and conditions makes a reform of the copyright contract
law largely obsolete. For instance the OLG Düsseldorf in its judgment of October 23rd
2001431 applied the general terms and conditions control to TV contracts. Among other things
the subject of the proceedings was the question to what extent MDR and NDR could prevent
film producers from exploiting their video-rights. According to the view of the Senate of
Düsseldorf, the authority of the television stations only extends to the transmission of a film
but not to the video utilization. Attempts to hinder the film producers from a commercializa-
tion that is beyond TV are considered unlawful. Also the broadcasting services are prevented
from concluding contracts that assure themselves half of the profits made by the film produc-
ers via performing rights societies. The judgment is legally binding and leads to the nullity of
numerous current contract clauses.




431
      ZUM 2002, 221
                                     Thomas Hoeren-Internet Law                                 139
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A recurrent question in the internet branch is whether producers can make use of works they
still have in reliance on old contracts. Here § 31 [4] UrhG is relevant, according to which li-
cense agreements can not refer to types of use that were then unknown.


a) Introduction

Where a provider wants to integrate already existing works into a homepage, depending on
the exploitation right affected the consent of the creator will be necessary. Problematic are
cases in which the creator had already granted an exclusive right of use to the producer and
the producer began to carry out the use in multimedia afterwards. Are producers entitled to a
secondary exploitation of works in reliance on their exclusive right of use? With regard to §
31 [4] UrhG this appears problematic, especially when considering the internet as an un-
known type of use. Were the rule applicable in this way, producers would be prevented from
relyong on old contracts. Instead, they would have to renegotiate with the licensors to acquire
the necessary rights for use in the internet.
That could result in considerable logistical problems, because the right-owner could poten-
tially be impossible to find or already dead. Additionally, some licensors see this as their
chance for earning more money in the internet-euphoria; they will only grant these rights for
high additional payments. So § 31 [4] could become the bane of Content-Providers. 432




432
   Concerning several other legal problems in the multimedia development: Hoeren, An assessment of long term
solutions in the context of copyright and electronic delivery systems and multimedia products, published by the
European Commission / DG XIII, Luxembourg 1995.
                                          Thomas Hoeren-Internet Law                                       140
b) Applicability to online-services

The question is whether online services can be considered as a new type of use.433 The online
area is subject to its own technical and economic regulation. Distribution via internet happens
internationally to its own public and has no regard for national borders. A work of literature
which is offered online reaches new circles of readers. Additionally, within the WWW which
is the online-pendant to the multimedia CD, pictures, words and sounds are connected into a
new unit and create new products. Purchasers do not just gain old information through a new
technical means of transfer. Rather they surf through the internet precisely because they can
experience a previously unknown connection of information into one unit. Therefore this area
has its own users, who have their own magazines and their own services.434


What you need to pay attention to are fidelity obligations arising from employment contracts
or other sources.. According to general employment law employees are forbidden to offer
internet use rights to other persons and in this respect compete with the employer. As far as
this is concerned, there is an obligation to negotiate according to § 242 BGB, and on this basis
the employee has to offer later acquisitions of online rights to the employer on appropriate
and reasonable conditions.


It is controversial how the specific novelty of the internet should be described. The digitaliza-
tion on its own cannot yet be regarded as the significant point.435 Decisive are the individual
services within the internet according to the concretely used type of work. For example the
use of photographs in the internet is an individual type of use.436 Also the ability to retrieve
movies on demand is an individual exploitation form.437 The BGH wants the exploitation of
the print media to be regarded as an individual interpretation.438 As the date for the novelty,
caselaw and literature use the year 1995 (+/- one year).439 In 1980 the distribution of elec-



433
    The question concerning the unknown type of use of CD-ROM-Products has been answered in court. Several
European Courts have affirmed the new type of use and decided to gear to the question of novelty in the years
around 1990; LG Hamburg, MMR 1998, 44; Bezirksgericht Amsterdam, MMR 1998, 34.
434
    As in: Bezirksgericht Amsterdam, MMR 1998, 34, 35.
435
    As in: Fromm/Ordemann/Hertig, §§ 31/32 Rdnr. 18; Lehmann, Internet- und Multimediarecht, 1997, 61;
Castedyk, MMR 2000, 295; Thurow, Festschrift Kreile 1994, 763, 770.
436
    LG Berlin, ZUM 2000, 73.
437
    OLG München, ZUM 1998, 413; LG München I, 10. March 1999, MMR 2000, 291.
438
    BGH, GRUR 1997, 464 – CD Infobank II. Similar also OLG Hamburg, 11. May, 2000, NJW- RR 2001, 123.
439
    See also LG München I, 10. March 1999, MMR 2000, 291 with annotations by Castendyk; LG Berlin, 13.
October 1999, MMR 2000, 495 with annotations by Klute = ZUM 2000, 73. Meanwhile similar the opinion in
the USA, as the Supreme Court decision in the case Tasini v. New York Times shows, 2001 US Lexis 4667 = 69
USLW 4567 (2001) = GRUR Int. 2002, 276 with annotations Wand. Similar also for Ebooks for a common
                                        Thomas Hoeren-Internet Law                                       141
tronic newspapers via the internet was unknown.440 In the meantime digital use of data me-
dium- products has been subsumed under § 31 [4] UrhG, like for example the DVD, which
was an unknown type of use until the end of the 90’s441, or the CD- ROM, for which the year
1990 is the record date.442


c) „Videozweitauswertung III“ and multimedia

By deciding the case “Videozweitauswertung III“ (Video Secondary Exploitation III) the
BGH has added another variation to its previous thoughts443: What would happen if a bright
producer were to have included the multimedia use of material in his contracts before 1990?
According to the considerations of the BGH, this would have been a risk transaction in the
preliminary stages of an emerging development of an economically independent exploitation
form. § 31 [4] UrhG is not applicable to this form. Consequently, the inclusion of the concept
of online exploitation will suffice to oust § 31 [4] UrhG. However the BGH has specifically
demanded that “the new, still economically insignificant type of use is named in a definite
sense, expressly agreed on and clarified by the contracting parties so that it becomes a recog-
nizable subject matter of performance and consideration”444. I cannot understand this rigidity.
With the necessity of the explicit clarification the BGH makes it de facto impossible to enter
into risk transactions within the scope of standard-form contracts. The protection of the
rightowner is already granted when the type of use is definitely known; if he or she signs a
standard-form contract with knowledge of this legal provision there is no need for further pro-
tection by § 31 [4] UrhG. But then again, § 36 UrhG must be kept in mind, which says that
the creator can claim a modification of the contract when the contracted payment and the ac-
tual income resulting from the use of the work are grossly out of proportion.



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contract of publication US District Court, S.D. New York, 11. Jul< 2001, GRUR Int. 2002, 364 with ann. Win-
disch.
440
    OLG Hamburg, 11. May 2000, MMR 2001, 261(Leitsatz).
441
    LG München I, 4. October 2001, AfP 2002, 67= MMR 2001, 828 with comments by Reber. Similar also
Reber, GRUR 1998, 792, 797; Stieper/Frank, MMR 2000, 643; opposite Petersdorf-Campen, ZUM Sonderheft
1996, 1042.
442
    BGH, 5. July 2001, AfP 2002, 35= ZUM 2002, 214 with comments by Feldmann 210- Spiegel- CD- Rom;
similar OLG Hamburg, ZUM 1999, 78 0 MMR 1999, 225.
443
    NJW 1995, 1496.
444
    BGH, GRUR 1995, 212, 215.
                                         Thomas Hoeren-Internet Law                                     142
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The continental European copyright tradition has several problems with the development of
works in the course of employment.445 Since the French Revolution, the expression of your
own creativity in original works has been regarded as a human right. Therefore the creator of
a piece of work is considered as the owner of all rights, even when he or she was instructed by
the employer to develop this piece of work (see § 29 UrhG). Furthermore the German Copy-
right Law does not allow legal persons to be owners of copyrights.
Consequently, it is the employee who is seen as the creator generally; contractual limitations
of this principle are invalid. Employers do not acquire copyrights on digital products, even
when the employee has only been employed for the development of such products.446
However, employers can stipulate exclusive or simple rights of use contractually. Even when
they do not do this in the employment contract, they should be granted all the rights which are
necessary for the purpose of the employment contract (§ 31 [5] in connection with § 43
UrhG).447 The application of the so called “purpose-oriented assignment principle” creates
some difficulties.


445
    Michel Vivant, Copyrightability of Computer Programs in Europe, in: A.P. Meijboom/C.Prins ( eds.), The
Law of Information Technology in Europe 1992, Deventer 1991, 103, 110.
446
    On this issue in general, see: Holländer, Arbeitnehmerrechte an Software, Diss. Bayreuth 1991; Scholz, Die
Rechtsstellung des Computerprogramme erstellenden Arbeitnehmers nach Urheberrecht, Patentrecht und Arbeit-
nehmererfindungsrecht , Köln 1989.
447
    BAG, GRUR 1984, 429; BGH, GRUR 1974, 480. See also: Heribert Buchner, Der Schutz von Computerpro-
grammen im Arbeitsverhältnis, in: Michael Lehmann ( Hg.), Rechtsschutz und Verwertung von Computerpro-
                                          Thomas Hoeren-Internet Law                                       143
From among all the differently opinions in discussion, a sort of “Opinio Comunis” has devel-
oped which says the following448:


    • In the case where an employee - because of the general elements of the employment
        contract or an individual assignment – has mainly been entrusted with the develop-
        ment of a work, the employer has right to assignment of an exclusive license to exploit
        the results commercially.449


    • An employee whose does not develop the works as a main task, but supplementary to
        his employment, has to grant the employer a simple right of use to allow him to use
        the works in his business.450 What remains in doubt is whether in these situations the
        the employer should be granted an exclusive right of use as well.451


    • An employee can freely use and exploit the works which he developed out of business
        hours. It is under discussion whether certain rules of Patent Law should be applied
        analogously in this case452. Especially controversial is whether the employee has to in-
        form the employer about his work in certain special circumstances and if he has to of-
        fer the employer the resulting rights under appropriate and reasonable conditions (§
        19 of the Arbeitnehmererfindungsgesetzes453 analogous).454


    • The employer has no rights in works which were created before the beginning or after
        the termination of employment.455 But a creator is not allowed to stop the develop-
        ment of a work in order to terminate his contract and to use and exploit the work for
        himself afterwards; if he does so, the employer obtains the right of an exclusive li-



grammen, Köln 1988, XI, 266; Günter Hölländer, Arbeitnehmerrechte an Software, Bayreuth 1991, 122 with
further evidence.
448
    See on this issue: Zahrnt, DV- Verträge: Rechtsfragen und Rechtsprechung, loose-leaf edition, May 1993,
Hallbergmoos 1993, chapter 11; Koch, Urheberrechte an Computerprogrammen sichern; ein aktueller Rechtsrat-
geber für die GESTALTUNG VON ARBEITS- UND Nutzungsverträgen mit programmentwichklern, Planegg
1986; the same., CR 1985, 86 (I), 1986, 145 (II); Sundermann, GRUR 1988, 350; Kolle, GRUR 1985, 1016.
449
    See OLG Karlsruhe, CR 1987, 763; LAG München, CR 1987, 509; LAG Schleswig-Holstein, BB 1983, 994;
OLG Koblenz, BB 1983, 992.
450
    BGH, CR 1985, 22.
451
    Koch, CR 1985, 89.
452
    Buchmüller, Urheberrecht und Computzersoftware, Diss. Münster 1987, 99; Henkel BB 1987, 836-837.
453
    Gesetz über Arbeitnehmererfindungen vom 25. Juli 1957, Bundesgesetzblatt 1957 I, 756. See also Junker,
Computerrecht, Baden- Baden 1988, 238 – 241.
454
    See Buchmüller, Urheberrecht und Computersoftware , Diss. Münster 1985, 98; Däubler, AuR 1985, 169,
174 f.; Kolle , GRUR 1985, 1016, 1020.
455
    BGH, GRUR 1985, 129; LAG München, RDV 1987, 145.
                                         Thomas Hoeren-Internet Law                                    144
         cense even though the development of the work was completed after the termination
         of the contract.456


      • The employee – in contrast to Patent Law - does not have a right to claim royalties for
         the use and exploitation of his works by the employer, because he was already paid for
         the development of the program in the form of his salary.457 However, literature and
         caselaw are discussing whether the employee should be granted a special reward,
         when the salary is disproportional to the economic success of his software (“Sonder-
         leistungstheorie”).458


      • The inalienable moral rights of the creator always stay with the employee. These rights
         especially include the right to be named and regarded as the creator and also the right
         to modify the work. (§ 39 UrhG); additionally there are some other ancillary rights
         (the right of access to work pieces according to § 25 UrhG; Rights of revocation ac-
         cording to §§ 41 seq. UrhG and so on).
      • This legal position is very disadvantageous for the employer – especially in comparison
         with the Anglo- American copyright system, in which the employer is regarded as the
         creator of the developed product. Nevertheless, some parts of the literature consider
         the contractual renunciation of these moral rights of the creator as possible. 459


However, in the software area ever since June 24th 1993 special regulations are applicable as
a consequence of the European Protection Directive. § 69b [1] UrhG deals with copyrights in
the course of employments. If software is developed by employees during the fulfillment of
their contractual duties or according to the instructions of the employer, the employer shall
only be entitled to all economically relevant rights unless the contract says something differ-
ent. This regulation also extends to employment by public authorities, (§ 69b [2] UrhG).460
However, the regulation is not applicable to contractual relations between principal and agent.



456
    BGH, NJW 1981, 345.
457
    So explicitly BGH, 24. October 2000, MMR 2001, 310 - Wetterführungspläne I with critical comments by
Hoeren, LAG RDV 1987, 145 und judgment of23. October 2001, MMR 2002, 99 with critical comments by
Rinkler. See also Ullmann, CR 1986, 504.
458
    BAG, GRUR 1966, 88. Partly § 36 UrhG is also referred to; see Fromm/Nordemann/Vinck, Urheberrecht, 8th
vol. Stuttgart 1994, § 36 no. 4; Buchner, GRUR 1985, 1.
459
    Seetzen, Der Verzicht im Immaterialgüterrecht, München 1969, 49; Schricker, Festschrift für Hubmann,
Frankfurt 1985, 409.
460
    Cp. the difficult problem of copyright in universities, that is despite § 69 b II UrhG awaiting a solution Hub-
mann/Preuss, Mitteilungen des Hochschulverbandes 1986, 31; Loeper, WissR 1986, 133.
                                           Thomas Hoeren-Internet Law                                           145
In this regard, in future everything will depend decisively on the (difficult) demarcation of
mandate and employment contract.


The regulation of § 69b UrhG leads to an important change in the German Copyright Law461:
The employer gains all the economic rights, even if the employee is not employed as a full
time software-developer.462 Additionally, if the employee rejects this position of the em-
ployer, the employer no longer needs to litigate for the rights. Instead, the employer becomes
owner of the rights even in the case of an employee’s refusal. As it is also stated in the reason-
ing for § 69b UrhG- pecuniary powers are completely assigned to the employer by virtue of
law.463 Also within the scope of § 69b UrhG a compensation apart from wages is generally
excluded.464 The expression “economic rights” does not include the moral rights of the crea-
tor. Neither the EC Directive nor the bill intends to regulate these idealist rights;465 the old
law remains unchanged in this respect.
For that reason the creator of a program is allowed to exercise the following rights even in
employment relations


      • the right to decide whether and where the work is published and distributed , - the right
         to be named as the creator, and especially
      • the right to refuse modifications of the work as being distorting.


These rights are inalienable and cannot even be assigned within the scope of the contract of
employment. Whether a waiver of the exercise of these rights is possible might require a
clarification by the courts.466



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461
    Cp. to this in detail Sack, BB 1991, 2165.
462
    This is also applied if the program is developed during working time without any concrete order: KG, CR
1997, 612.
463
    BT-DrS 12/4022, S. 10.
464
    BGH, 24. October 2000, ZUM 2001, 161 = BB 2001, 66.
465
    BT-DrS 12/4022, S.10.
466
    Cp. to this Fromm/ Nordmann/Hertin, Urheberreecht, 8th vol. Stuttgart 1998, no. 3 with further evidence
                                           Thomas Hoeren-Internet Law                                       146
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Particular difficulties arise when questioning the exploitation of copyright-protected contents
in the case of insolvency. Rights of use in works cannot be transferred to the creditor for the
purpose of security without the agreement of the creators involved. Here the (optional) re-
quirement of consent of §§ 34 [1], 35 [1] UrhG is applicable. For the field of films, there are
exceptions (see the special regulation of § 90 s. 1 UrhG). The requirement of consent by the
creator does not apply if the entire enterprise is subject to an assignment, i.e. all rights and
singular objects are transferred (§ 34 [3] UrhG).467


Further, attention should be paid to the fact that an exploitation during an insolvency is not
valid if there are obstacles resulting from the foreclosure which would make an exploitation
divergent (§§ 42, 43 [1] InsO). The UrhG provides a set of limitations that are defined in the
Foreclosure Law. At first it must be considered that copyright as such and the exploitation
rights as well as the moral right of the creator are not assignable and consequently not ex-
ploitable (§ 29 s. 2 UrhG). An execution of rights of use is not practicable and therefore ex-
cluded concerning unknown types of use (§ 31 [4] UrhG). From this fact, § 113 UrhG draws
the logical conclusion that in the case of an outstanding debt against the creator, a foreclosure
into copyrights of the creator is valid only with the consent of the creator and only insofar as
he can grant rights of use to others (§ 31 UrhG). Because of that, only single rights of use and
outstanding debts out of their exploitation (including the profits out of compensation of the
exploitation companies) are exploitable, but only if the creator agrees. The consent has to be
given strictly personally (§ 113 s. 2 UrhG). A notice of assent by the insolvency administrator
is not sufficient (§ 91 [1] InsO).
These rules are also applicable to obligees, especially to photographers (§ 118 in connection
with § 72 UrhG), but not to performing artists or to producers of films and sound storage me-
diums.


The difficulties of showing protective positions of the copyright in the balance sheet are to be
focused on as well. Activation as defined by Commercial Law is possible only if the copy-
right, as an intangible value, is capable of being used to improve the asset position in an ab-
stract and a concrete way. For the abstract capability of activation, it is necessary that the


467
   Cp. also RGZ 68, 49, 54/55 – Süddeutsche Bauhütte, RGZ 95, 235-237 – Zeitungsverlag, OLG Köln GRUR
1950, 579, 580.
                                      Thomas Hoeren-Internet Law                                   147
copyright is autonomously exploitable. But, in the abstract sense the copyright is not alienable
(§ 29 s. 1 UrhG); for this reason only the possibility of granting rights of use in the scope of §
31 UrhG is capable of activation. Further difficulties are caused by § 248 [2] HGB which for-
bids an activation of intangible objects of property which were not purchased on a payment
basis. Because of this, self-made intangible values are excluded from activation. This contra-
dicts the rule of completeness, stated in § 246 [1] HGB and the differing provisions in the IAS
and US-GAAP-System.468 According to IAS 38.45 and SFAS 86/SOP 98-1 the one who
draws up the balance has to have the ability, the resources and the intent to develop a market-
ready product. In addition a corresponding market for the external use has to be proven. In the
German discussion469 it is therefore demanded to abolish § 248 [2] HGB and to admit an acti-
vation of intangible values, if a concrete project was initiated and can be defined and de-
scribed. The active pursuit has to be guaranteed and the use and profit must be justifiably ex-
pected. At least a showing in the balance sheet as a transitory item in the scope of § 250 [1]
HGB should be legitimate if the concrete expenses can definitely be assigned to a later profit.



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Globalization of the internet and the territorial basis of copyright contradict each other. This
contradiction leads to considerable confusion in practice. Statutory exemption clauses (statu-
tory licensing) or the intermediary activities of exploitation companies can only solve these


468
  See for this by Keitz, Immaterielle Güter in der internationalen Rechnungslegung, 1997.
469
   See the report by the research group „Immaterielle Werte im Rechnungswesen“ of the Schmalenbach-
Gesellschaft für Betriebswirtschaft e.V. in DB 2001, 989.
                                           Thomas Hoeren-Internet Law                           148
problems in a limited way – as described above. Even “single licensing” turns out to be a
time-consuming solution because a contract has to be concluded with every rightowner. It is
not surprising that in this situation the industry has resorted to self-help. Code as code, the
programming code becomes a codification. Technical standards, copy protection mechanisms
and Copyright Management Systems take the place of statutory guidelines. These are


      • Dongles, a connector for the purpose of protection against unauthorized use of the soft-
         ware, which is put on the parallel port of the computer and thus makes use of the soft-
         ware possible


      • RPS, the Rights Protection System of IFPI, a system to block access to Websites which
         violate copyrights


      • Regional Encoding Enhancements, a territorial restriction on possible uses for compact
         discs


      • SCMS, the Serial Copy Management System, which hinders the use of copied compact
         discs


In relation to this area of technical self-help the EU has passed a number of provisions. First
of all one should consider the provisions in the software protection directive dealing with pro-
tection against avoidance tools (Art. 7 [1] lit. c).470 As well as this there is directive 98/84 EG
on legal protection of controlled-access data and access controlling services.471 This directive
regulates not just the area of Pay-TV but all controlled-access services (Art. 2 lit. A). Accord-
ing to Art 4 of this directive the member states have to prohibit so called “illicit devices”.
Such “devices” as defined in Art. 2 are “any equipment or software designed or adapted to
give access to a protected service in an intelligible form without the authorization of the ser-
vice provider”. The directive was implemented into the German legal system through the
“protection for controlled-service and access-controlling services act- (Zugangskontrollge-
setz- ZKDSG)”.472 This act came into effect on March 23rd 2002. It forbids the professional


470
    See for this above all Raubenheimer, CR 1994, 129seqq.; the same, Mitt. 1994, 309ff.
471
    AB. No. L 320/54 of 28. November 1998.
472
    Bundesgesetzblatt ( BGBl 2002 I v. 22.3. 2002, 1090f.)
 http://217.160.60.235/BGBL/bgbl1f/bgbl102019s1090.pdf).

                                         Thomas Hoeren-Internet Law                            149
distribution of “devices” which are designed to overcome protected access to television or
radio shows or television or media services.


On top of this, there is a directive “on harmonization of specific aspects of the copyright and
of the similar protection rights in the information society”, called the InfoSoc- directive,
which was passed not long ago. The InfoSoc-directive obliges the member states to create
appropriate legal protection against the evasion of effective technical action by a person, who
knows or according to the circumstances ought to know, that he or she is pursuing this aim
(Art. 6 [1]).


But such protection creates problems where the technical protection systems undermine legal
provisions. For example, this is the case with SCMS if the legally permitted production of
private copies is made technically impossible. The same is applicable to the “Regional Encod-
ing Mechanisms” which collide with the exhaustion principle of § 17 UrhG and the principle
of freedom of goods. According to Art. 6 of this directive, the member states have to take
action against technical barriers, if these contradict the legal limitations. In relation to the
freedom of private copying, Art. 6 [4] 2 says only that a member state “may” take action.
Therefore in future it is possible that technical barriers will prevent the production of private
copies and the the EU member states will not take action to protect users. Furthermore,
rightowners can also create such blocks, if they allow copying for private use ( Art. 6 [4] 2 ).



; &RQVHTXHQFHV RI DQ LQIULQJHPHQW

The legal consequences in the case of piracy are defined in §§ 97 seqq. and in §§ 106 seqq.
UrhG;
Additionally the damages provisions in the BGB should be consulted.



 &ULPLQDO VDQFWLRQV

In relation to the consequences of a violation of the law, the criminal sanctions will be con-
sidered first. According to § 106 I UrhG, a person that duplicates (§ 16 UrhG ), disseminates
(§ 17 UrhG ) or reproduces a work in public, without having a legal license and without the
consent of the rightholder, is punishable by imprisonment up to three years or by a fine. Ac-
cording to this, copying software without having obtained the consent of the rightholder is

                                    Thomas Hoeren-Internet Law                                150
illegal unless the legal exceptions, such as § 69c I 3 UrhG (alienated tangible pieces of repro-
duction), § 69d II UrhG (backup copies) or §§ 69d III, 69e UrhG (reverse engineering and
decompilation)473 apply. Although producing pirate copies is still seen as a peccadillo in our
society, the legislator has not legitimized this behavior by creating a legal barrier. In contra-
diction to this, online data transfer cannot be considered a form of dissemination, as only
physical objects can be objects of dissemination.474 However, holding material ready for
download on demand via the internet constitutes a form of illegal public reproduction. The
mere possession of pirate copies however is not punishable.
§ 106 [2] UrhG extends penalties to attempted offences. According to this, having inwardly
prepared to begin immediately is sufficient (see § 24 StGB). But finding the instruments nec-
essary to produce copies in the accused’s domicile is not enough for a punishment. Therefore
the simple possession of a CD-writer does not indicate the idea of acting immediately. As it
follows from § 109 UrhG, § 106 UrhG is a criminal offence prosecuted only upon application
by the victim. So a wish and an explicit demand for a criminal prosecution by the rightholder
are necessary. According to § 109 UrhG the law enforcement authorities can only act on their
own behalf if they assume the criminal prosecution to be a matter with a particular public in-
terest. A particular public interest is negated in the domain of unimportant cases of piracy
(e.g.: the so-called computerkids). Only if the dimension of piracy exceeds the normal degree
will investigation by law enforcement authorities be necessary.
This is different in the area of piracy on a commercial basis (§ 108a ). Producing and dis-
seminating copies with a commercial purpose does not just elevate the potential prison sen-
tence to up to five years. Commercial piracy is a criminal offence rendering the accused liable
to public prosecution. Accordingly the law enforcement authorities can investigate once they
have formed a reasonable suspicion without needing a complaint from the affected party.
In addition to this objects like the CD-writer, software and even the whole PC including at-
tachments can be confiscated according to § 110 UrhG if they were used within the scope of
one of the above-named offences.
Requesting a penal prosecution contains a lot of advantages for the injured person; in civil
proceedings it may be very difficult to prove the act of piracy. Gemerally the affected party
cannot confiscate pieces of evidence itself. This is different for law enforcement authorities,
who are allowed to confiscate relevant materials on the premises of the accused under a judi-
cial order (see § 98 StPO). As soon as the criminal procedure is finished the affected party can


473
      see § 2 VI. legal exceptions
474
      Fromm/Nordemann
                                     Thomas Hoeren-Internet Law                              151
introduce its results into the civil proceedings. Moreover the affected party does not have to
pay any costs for the investigation; in particular any expert’s fees will have to be borne by the
state. In view of the advantageous cost-benefit relationship, the injured party should abso-
lutely demand a prosecution. The affected party should also give notice of commercial piracy
to the relevant authorities and accompany the proceedings.



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a) § 97 [1] UrhG

The central provision for claims under civil law is § 97 [1] UrhG. According to this rule the
injured party has a claim to elimination or injunctive relief regardless of fault in the case of
danger of repetition. Furthermore the injured party can claim damages in cases of intent and
negligence. A condition is an illegal and intentional or negligent violation of an ancillary
copyright or a copyright. These claims can be assigned and waived. Only absolute rights, i.e.
rights that are enforceable against everyone, are protected. Every interference in the exploita-
tion right or the right of personality of the holder is classified as an act of infringement. Inter-
ference in the position of the rightholder is illegal, if it is not covered by a legal limitation or
the consent of the holder.


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The injunctive relief of § 97 I UrhG counts both for injuries to property rights and injuries to
personal rights. One has to differentiate between reconstitutive and preventative injunctive
relief. While the law applies only to reconstitutive injunctive relief after injury of legal inter-
ests, preventative injunctive relief, developed by the judiciary regulates cases of concrete
danger of first commission. This danger exists in all preparative measures pointing to a future
interference.
Strictly speaking, all injunctive relief is a form of claim to elimination. According to this the
claim to elimination is relevant only when a continuing danger cannot be eliminated by
refraining. It is used in order to prevent future infringements, not in order to reconstitute the
original state of affairs.


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                                    Thomas Hoeren-Internet Law                                  152
The injured party has a claim for damages if the infringer acts intentionally or negligently.
This still applies even when the infringer asserts a lack of sufficient knowledge about the law.
The broad notion that one’s behavior does not conform to the legal order is enough. The in-
fringer must obtain the necessary knowledge, “error does not protect from punishment”.
Every mistake made in determining his or her legal position is assigned to the infringer as
negligence.
One has to differentiate between physical damage and non- physical damage in order to de-
termine the content of the damages claim. §§ 249 seqq are applied in the case of physical
damage. At first the infringer owes restoration i.e. the restitution of the status that would exist
if there had been no infringement. This is frequently not possible in cases of violation of
copyright. Therefore the infringer will owe pecuniary compensation according to §§ 251
BGB. Three different ways of calculation can potentially be used: reimbursing the loss of
property including the loss of profits (§§ 249 seqq BGB), payment of an appropriate license
fee and surrender of the earned profits. The injured party can choose between these calcula-
tion options and change around during the lawsuit and even after the judgment has become
final. The profit that in all probability could be expected in the normal course of events or in
the particular circumstances, especially considering the arrangements that were made, is as-
sumed as loss of profit (§ 252 S. 2 BGB). But within the scope of copyright, proving expected
profit is very difficult. Therefore it is easier for the injured party to demand an appropriate
license fee for the use of the rights that it is entitled to. In addition to this, the infringer has to
reimburse the amount that the injured party would have earned in return for its consent. A
franchise is considered appropriate, if it corresponds to the fee that reasonable contractual
partners normally would have stipulated. Moreover § 97 I, 2 UrhG expressly says that the
injured party can demand surrender of profits earned instead of damages. The infringer then
has to surrender the net profit after having subtracted the costs he or she incurred regardless of
the fact that the injured party might not have been able to earn this profit.
There are some particularities concerning the granting of an additional excess charge. The
judiciiary has allowed the GEMA to cover expenses due to the supervision of infringements
by an excess charge of 100 %, in the scope of the calculation of the concrete damage. This
lump excess charge should not be granted to other industrial sectors, because it constitutes a
hardly justifiable hidden form of punitive damages.
This is different for cases of violation of personal copyrights. According to § 97 II UrhG au-
thors, photographers and practicing artists can demand an equitable compensation for immate-



                                      Thomas Hoeren-Internet Law                                   153
rial damage. This guarantees that photographers can demand an excess charge for commercial
damage in case of violation of their right to mention of their name.


b) Other monetary claims

§ 97 III UrhG points to the applicability of other bases of claims. Claims under the law of
unjust enrichment, of carrying out business without mandate, of tort and of competition can
be applied. The claims of §§ 812 seqq BGB are of particular importance, because they admit
payment without requiring that an infringer be at fault. This is important in cases when the
injured party cannot prove any intention or negligence by the infringer. In addition to this they
are subject to the 30-year limitation period of §§ 195 BGB. In contrast to these the other
claims are of little importance because of the extensive regulation of § 97 UrhG.


c) Information and accounting

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According to § 97 I UrhG in conjunction with § 242 determined by analogy, the injured party
has a claim for presentation of the profit and a claim for information according to § 101a
UrhG which is orientated to the right of use. This claim facilitates the enforcement of the real
claim. The claim for information exists only if the injured party is not able to procure the in-
formation on its own in a reasonable way. The claim for rendering accounts can only be as-
serted against commercial parties.



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Besides intellectual property law there is patent law, which regulates the protection of innova-
tive inventions. To be protected by patent law it is necessary to register the invention at the
German (or European) Patent Office. The protection exists for 20 years starting with the reg-
istration; afterwards the invention can be used free of charge.


                                     Thomas Hoeren-Internet Law                              154
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German patent law is stated in the Patent Act, which came into effect in 1877 and was
amended in 1968 and 1978. The present version of the act dates from 16. December 1980 and
came into effect on 1. January 1981. The area of protection of the PatG (Patent Act) is limited
to technical inventions. According to this the Patent Act protects
    • every technical achievement
    • that is new (§ 3 PatG)
    • that can be used commercially (§ 5 PatG)
    • that is based on an inventive act (§ 4 PatG)
    • and where the granting of a patent is not impossible from the outset (§ 1 [2], [3] PatG).


Furthermore the granting of a patent requires registration of the invention at the (German or
European) Patent Office. After registration the invention is made public for a duration of 18
months (so-called disclosure as defined by § 31 II PatG). Then the patentability is examined
in detail, if the registrar wishes and files an application to do so within 7 years after registra-
tion (§ 44 PatG). If the result of the examination is satisfactory, the patent office grants the
patent (§ 49 PatG). The granting of the patent is then published with the patent specification
in the Patent Office Journal (§ 58 PatG). Everybody can now object to the patent within 3
months (§ 59 PatG). If there are no claims the patentee can assert the rights that result from
the patent for the duration of 20 years starting at registration.
The patent has the effect that only the patentee is entitled to use the patented invention (§ 9 I 1
PatG). Without consent a third party can not produce, offer, bring into business, use or own
the creation that is the object of the patent for these purposes (§ 9 I 2 PatG). The same applies
to patented procedures and products that result from them (§ 9 I 2 PatG). Also objects that
refer to an essential element of the invention may not be brought into business (§10 I PatG).
But private dealings for non-commercial purposes (§ 11 no. 1 PatG) and dealings for experi-
mental purposes are still permitted (§11 no. 2 PatG).



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                                     Thomas Hoeren-Internet Law                                155
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  *QWKHU 6FK|OFK 6RIWZDUHSDWHQWH RKQH *UHQ]HQ LQ *585   7KRPDV
7KH 3DWHQWLQJ RI WKH /LEHUDO 3URIHVVLRQV  %RVWRQ &ROOHJH /:  WKH VDPH $ SURSRVDO
IRU SDWHQW ERXQWLHV LQ  8QLYHUVLW\ RI ,OOLQRLV /5 

According to § 1 [2] PatG programs for data processing systems are non-protectable inven-
tions. This exclusion from patentability is applicable only if software “as such” is intended to
be protected (§ 1 [3] PatG). This regulation was inserted in patent law as of 1. January 1978
by the Act on the International Patent Agreement of 21. June 1976. As a result software is not
patentable in general. Historically this regulation is based on the fact that the US Patent Office
at the beginning of the 70s was overloaded with a lot of labor-intensive applications for soft-
ware.475 Therefore the exclusion of patentability was inserted into the US Patent Act and from
there it got into the European Patent Acts.476 At the moment such an exclusion exists in 16
countries and 2 supraregional agreements477; in other countries the courts came to similar
conclusions. Already prior to the new regulation the BGH in Germany based its decisions on
the assumption that computer programs are generally not of a technical character and are
therefore not patentable.478 Recently opinions have surfaced that believe that software should
be generally patentable; the European Commission is also preparing a statement on the patent
protection of software, which may result in a wide extension of the protection. In the most
recent negotiations on the European Patent Agreement the German ministry of justice clearly
rejected such desires for amendments. The situation for extending the patent protection on
business concepts is similar.479 The relevant decision of the US appellate court for the Federal
Circuit is State Street Bank v. Signature of 23. June 1998, where a court approved a US-
patent for the computer-based administration of an investment structure.480 As a result pro-
tests were raised in Europe especially by the Open-Source movement, which pointed out the
dangers of such an extensive patent policy.


The present legal position is stated in general in the examination guidelines of the DPA
(German Patent Office) of 24. June 1981,481 that came into effect 1. January 1987. According
to this inventions can be protected if they contain a data processing program, an arithmetic or

475
    see also Gottschalk v. Benson 409 US 65, 68 (1972).
476
    see also the "Übereinkommen zur Vereinheitlichung gewisser Begriffe des materiellen Rechts der Erfindungs-
patente" of 27. November 1963, BGBl. 1976 II, 658.
477
    WIPO-study, Doc. HL/CE/IV/INF/1: Exclusions from Patent Protection.
478
    BGHZ 67, 22 - Dispositionsprogramm.
479
    See the overview in Hoffmann/Gabriel, K&R 1999, 453 seqq.
480
    Published in: GRUR Int. 1999, 633 seqq. See also the following decision ATT vs. Excell, GRUR Int. 2000,
174. See also Esslinger/Hössle, Mitt. 1999, 327; Meyer/Kort, Mitt. 2000, 478.

                                        Thomas Hoeren-Internet Law                                        156
an organizational rule, other software characteristics of a program-like process (program-
related inventions). But for these inventions it is decisive that they have a technical character
(no. 1). This is the case if - in order to fulfill its assignment - it is necessary to use natural
forces, technical measures or methods (e.g. hydraulic, electronic currents in switchgears or
signals in data processing systems) (No. 3).482


Differing from the BGH483, the DPA does not refer to the novelty and inventiveness as de-
manded by the academic theory in order to assess the technical character of the invention. The
object applied for has to be examined in its entirety for its technical character beyond the new
and inventive elements (no. 3). A program-related invention is technical if - in order to fulfill
its assignment - switch elements are used even if these elements as such work in previously
known ways (no. 5a). The technical character can also be that the invention requires a new
and inventive assembly of the system (no. 5b).


Besides the technical character the novelty and the level of innovation must also be examined.
If a program mainly relies on known logical-mathematical solution elements, it is not new
compared to the state of the art.


Presently there is a trend toward opening the gates for patent protection of software. Already
by the end of 1998 the European Parliament had declared that the patentability of software is
desirable – as it is in the USA or Japan.484 In the USA the decision of the appellate court for
the Federal Circuit in the case State Street Bank v. Signature opened the doors for the protec-
tion, where a US-patent was granted for a computer-based administration of an investment
structure.485 In September 2000 the Governing Board of the EPO resolved on the deletion of
software from the category of non-protectable objects (Art. 52 (2) EPC). At the diplomatic
conference on the EPC-revision in November 2000 in Munich the deletion of software from
the exclusion list was rejected for the time being and a final decision was postponed. In Feb-
ruary 2002 the Commission passed a proposal for a Directive on the patent protection of
"computer-implemented inventions".486 According to this, decisive for the patent protection of


481
    BlPMZ 1981, 263.
482
    BGHZ 52, 74, 79 - Rote Taube.
483
    BGHZ 67, 22 - Dispositionsprogramm; similar BPatGE 29, 24 85 = CR 1989, 902. Modified in BGHZ 115,
11 = CR 1991, 658 - Seitenpuffer.
484
    Resolution on the Commission Green Paper, A4-0384/98, minutes of 19. November 1998, [16].
485
    Decision of 23. Juli 1998, published in GRUR Int. 1999, 633.
486
    COM (2002), 92 final, to be found at http://www.europa.eu.int/comm/internal_market/en/indprop/como2-
92en.pdf
                                           Thomas Hoeren-Internet Law                                157
software is a "non-obvious technical contribution" (Art. 4 (2)). In order to find this the whole
patent application including any non-technical components is compared to the state of the art
(Art. 4 (3)). Art 5 of the proposal that does not admit the granting of a patent to software de-
tached from hardware is narrower than the former jurisdiction.487 In this context the Open-
Source-movement, which provides software free of charge (the most famous is Linux), must
be taken into account.488



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The question is quite uncomplicated where an employee has developed a patentable inven-
tion; in this case the Arbeitmehmererfindungsgesetz (ArbNErfG - Act on inventions by em-
ployees) of 25. July 1957 is applicable.489 This act distinguishes between service inventions
and free inventions.


a) Service inventions

Service inventions are inventions that were created as a result of the duty that the employee
owes or from the experience or the works of the company (§ 4 [2] ArbNErfG). The employee
has to notify the employer of the service invention without delay. The employer is entitled to
make limited or unlimited use of the invention with a written declaration to the employee (§ 6
ArbNErfG). If the employer makes unlimited use of the invention the rights in the invention
devolve to it. If it makes limited use of the invention it receives only a non-exclusive right to
use (§ 7 ArbNErfG). In case of use by the employer the employee has a claim to an appropri-
ate reimbursement (§§ 9, 10 ArbNErfG). The amount must conform to the "guidelines for the
reimbursement of an employee's invention in private service" of 20. July 1959. On average it
amounts to 15% of the reimbursement of an independent inventor.


b) Free inventions

If inventions are not service inventions, they are free inventions. This also applies if they are
invented with the help of ideas gained at work (so-called suggested inventions). But the em-
ployee has to notify the employer of a free invention too (§ 18 ArbNErfG). Furthermore un-

487
    According to this the reservations of Cook, CLSR 18 (2002), 197, 199.
488
    See Jaeger, GRUR Int. 1999, 839 and Lutterbeck/Gehring/Horns, Sicherheit in der Informationstechnologie
und Patentschutz für Software-Produkte – Ein Widerspruch? Expert's opinion on behalf of the BMWi of Dezem-
ber 2000.
489
    BGBl 1957 I 756.
                                           Thomas Hoeren-Internet Law                                  158
der certain conditions there will be a so-called "obligation to offer" (§ 19 ArbNErfG) of the
employee: before making commercial use ofthe free invention during the duration of the em-
ployer-employee relationship elsewhere, he or she has to offer a non-exclusive right to use to
the employer under appropriate conditions, if the invention is within the range of work carried
ouit by the employer's company. Only if the employer rejects the offer may the employee
make unrestricted commercial use of the invention.




                                   Thomas Hoeren-Internet Law                              159
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                                 Thomas Hoeren-Internet Law                            160
Anyone utilizing the Internet for advertising purposes is usually unaware of the legal restric-
tions that should be taken into account. A variety of laws can come into play, combined with
a variety of court decisions. In the following, some light shall shed in the overgrown jungle of
advertisement law. In this regard you need to distinguish between specific regulations – e.g.
in professional codes of conduct or in the laws governing the production and distribution of
medicines – and the general rules of Unfair Competition Law – in Germany set forth in the
Act against Unfair Competition (UWG).



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Similar to Copyright Law questions, you first need to find out to which cases national German
Unfair Competition and Antitrust Laws are applicable. In general this will be determined ac-

                                    Thomas Hoeren-Internet Law                                 161
cording to the place where the harmful event occurred, Art. 40 sec. 1 EGBGB. In Unfair
Competition Law, this is the place where the competing interests collide – also referred to as
market place. This is to be understood as the place where a market-related act of competition
affects the competitor; this place is both the place where the infringing conduct takes place
and where a harmful result is brought about within the meaning of Art. 40 sec. 1 EGBGB.490
As     for    advertisements,       the     exceptions     laid    down       in    Art.    41     EGBGB
from this principle come into play whenever the particular circumstances of the individual
case suggest a substantial closer connection of the advertisement to the (laws of the) country
of the sales market. Graphic illustrations for such circumstances are promotional trips abroad
which are advertised inside the country and whose clients are also from that country.


Anyone who utilizes the internet or a CD ROM for advertisement has to take domestic Ger-
man Law into account whenever the place where the competing interests collide is in Ger-
many. This is usually the place where one purposefully intervenes in the activity of a mar-
ket.491
In the Offline World therefore each act of distribution of a product in Germany results in the
application of German Law492 - unless the distribution is caused by a marginal „spill-over“.493
This spill-over effect refers to situations in which the distribution inside a country is so mini-
mal that competition on the market is not perceptibly affected. Since there are no colliding
interests without a perceptible affect, it seems unreasonable to apply national Unfair Competi-
tion Law to such spill-over. In the case where the product can only be bought abroad and is
not advertised in Germany, German law does not apply.
On the internet, advertisement occurs in two relevant ways: On the one hand by sending indi-
vidual or mass-emails, on the other hand by the use of websites. Here, the applicable law is
that of the country where the email was intended to be retrieved and from which the website
was intended to be accessed. Due to the final character of a market-interference, internet ser-
vices which are aimed at the American market are not subject to German unfair competition
rules. So far, the matter is clear. But from here on uncertainties take over: How can the ad-
dressees of a website be determined? In general websites can be accessed by users worldwide
– but that does not mean that they are targeting a worldwide audience. It is clear that the
subjective point of view of the sender or service provider cannot be decisive. Otherwise they

490
    For details see Sack, WRP 2000, 269, 272 f.
491
    Compare also BGHZ 113, 111, 15; OLG Karlsruhe, GRUR 1985 , 556, 557; of diverging opinion is the OLG
Frankfurt, IPRspr. 1990, Nr. 155, 307, 309, which does without the element of purposeness.
492
    For a comparison of the advertisement law aspects online and offline see Apel/Grappahaus, WRP 1999, 1247.

                                          Thomas Hoeren-Internet Law                                     162
could avoid the applicability of e.g. German law by the use of disclaimers stating that the
website is not directed to German users. In uncertain cases one has to rely on the principle of
„protestatio facto contraria“ and on the objective impression of the users. Therefore one needs
objective criteria to determine the addressees of an online advertisement campaign. However
it seems difficult to develop the relevant criteria.494 One such criterion could be the language
of the website which often corresponds to a national market. But this is a German perspective.
If English or French is used, a corresponding national market – due to the worldwide usage of
these languages – cannot be inferred.495 Apart from the language the methods of payment
available for an online service can provide further indications. If for example these methods
are limited to German (or Eurozone) currency or via accounts at German banks, you could see
this as a limitation to the German market. But these criteria cannot provide a lot of guidance
either: On the internet usually several methods of payment are offered – including the possi-
bility of using credit cards. More and more payments via smart cards (Geldkarte, Mondex) or
by using net-money (ecash) are accepted.496 These methods of payment are used worldwide
and therefore cannot provide any useful criteria for determining the addressees of an online
marketing campaign. Also disclaimers limiting the sale or distribution („The goods offered on
this website cannot be ordered from Switzerland and Austria“) may – as pointed out above –
merely serve as indications of a limitation to the German market. The decisive factor is how
the service provider acts in practice and whether or not it accepts orders from surrounding
countries. Therefore multiple websites exist whose targeted markets cannot be clearly deter-
mined. Owners of these websites have to take into account that their services are subject to
several national unfair competition regimes. German providers for example will usually have
to comply with the Unfair Competition Laws of Switzerland and Austria, which in parts di-
verge significantly from the German regulations.
In this complicated situation Art. 3 of the E-Commerce Directive497 and its German imple-
mentation in sec. 4 of the new Teleservices Act (TDG) are bringing about a decisive change.
According to these new provisions each Member State shall ensure that information society

493
    Sack, WRP 2000, 269, 274
494
    See OLG Frankfurt, CR 1999, 450 and – although related to aspects of international jurisdiction – Spindler,
MMR 2000, 18, 20
495
    Of a different opinion is the LG Köln in its decision of 20th April 2001, ZUM-RD 2001, 524 = CR 2002, 58
with remarks by Cichon. According to this decision the use of English language and the absence of a German
version were sufficient to show that the website www.budweiser.com is not aimed at the German market.
496
    See Escher, WM 1997, 1173
497
    Directive 2000/31/EC of the European Parliament and of the Council of 8 June 2000 on certain legal aspects
of Information Society Services, in particular Electronic Commerce, in the internal market – Official Journal
L178, 17/07/2000 p. 0001; see also the Amended Proposal of the Commission of 17 August 1999, COM (1999)


                                        Thomas Hoeren-Internet Law                                         163
services provided by a service provider established on its territory comply with the national
provisions applicable in the Member State in question which fall within the Directive’s coor-
dinated field. Disputed amongst scholars are in particular the meaning and scope of the terms
„Information Society services“ and „coordinated field“.498 At the same time, any restriction
on the freedom to provide Information Society Services is prohibited. With this the general
principle of the country of origin in EU Law is transferred to internet services. A provider
which provides its services in accordance with the applicable regulations of its country of
origin does not have to conform with any further rules in the (EU) countries where its services
can be accessed: Portuguese Internet Law supersedes German Unfair Competition Law or
Swedish Consumer Protection Law. Hidden behind this radical change is the latent fear of
harmonization in the fields of substantive law. Obviously, the EU Commission has lost the
courage to harmonize fields of substantive law such as unfair competition. Instead a path has
been chosen which (ostensibly) causes less discussion between the Member States – the re-
course to the formal principle of the country of origin. In the end this will lead to a harmoni-
zation at the lowest level. Now that the Directive has been enacted (on 8 June 2000), provid-
ers will choose to establish themselves in the Member State with the lowest restrictions on
their services. From there, they can provide their services all across Europe – a race to the
bottom has begun.499


The significance of the principle of country of origin is reduced by several exceptions to this
principle. According to the Annex to the E-Commerce Directive, several areas of law are not
subject to the principle at all. Hence the principle of country of origin does not apply to intel-
lectual- and industrial property rights, contractual obligations concerning consumer contracts
and the permissibility of unsolicited email-advertisements. In these areas, Member States are
therefore allowed to enact more restrictive regulations in their national laws (as to the issue of
unsolicited email-advertisements see below). According to Art. 3 [4] of the Directive, Mem-
ber States may take reasonable measures necessary for public policy, public health and con-
sumer protection derogating from the country of origin principle. In respect of these meas-
ures, the Member States are under the strong supervision of the Commission.




427 final and related to this Moritz, CR 2000, 61; Landfermann, ZUM 1999, 795; Spindler, ZUM 1999, 775;
Mankowski, GRUR 1999, 909; Tettenborn, K&R 1999, 404 and 252.
498
    Compare Hoeren, MMR 1999, 192, 193; Spindler, ZUM 1999, 775, 776
499
    The principle of country of origin does not apply to issues of international jurisdiction; of differing opinion
only Bernreuther, WRP 2001, 348.
                                          Thomas Hoeren-Internet Law                                            164
Still unresolved is further the relationship between the principle of country of origin and Pri-
vate International Law. The Commission initially was not aware of this problem - at the last
minute it included a clause stating that rules of Private International Law are not subject to the
Directive, but that such rules may not lead to results which conflict with the principle of coun-
try of origin. This principle therefore has the character of a meta-rule above the choice of law
regulations – something which Private International Law scholars and experts don’t agree
with.


The implementation of the E-Commerce Directive in national German law thus caused prob-
lems right away.500 The Ministry of Justice insisted on inserting the Electronic Commerce
Act (Elektronische Geschäftsverkehr Gesetz – EGG) a clause whereby the principle of coun-
try of origin does not apply whenever the rules of Private International Law lead to a different
result. Again this exception did not apply where the free movement of services was limited
beyond the restrictions set forth in substantive German law. This leads to the application of
foreign substantive law where this provides for a better outcome for a German service pro-
vider before the courts. A comparison of the positive results of the applications of both legal
systems was envisaged to determine the most preferable outcome on a case by case basis.501
The chamber of representatives of the federal states (Bundesrat) spoke out against such a
comparison. In a statement of 30 March 2001 it pointed out the need to examine whether such
a complicated regulation is still in line with the E-Commerce Directive.502 The final version
of that rule laid down in sec. 4 of the Teleservices Act (TDG)503 now does not contain such a
comparison anymore. German service providers – ones which are established in Germany –
are bound by German substantive law, even when they offer their services in other EU Mem-
ber States. The law of the country of origin also applies to foreign service providers. Problems
arise for service providers established outside the EU; they are bound by German law accord-
ing to the German choice of law rules as soon as they target German users and German mar-
kets. It remains unresolved whether this discrimination amounts to a violation of WTO rules.

500
    See the Draft of 14 February 2001, www.bmj.bund.de
501
     For the implementation in France see the draft of an Act regarding the Information Society at
www.lesechos.fr/evenment/LSI/projet-LSI.pdf . Similar to the German situation was the proposed regulation in
Austria which also included such a comparison – see www.bmj.gv.at/gesetzes/detail.php?id=8 and
www.parlament.gv.at (Government Draft No. 817 BlgNr.21.GP1). This comparison was ultimately not included
– see the ECG, Österreichisches BGBl. I 2001/152 at §2
502
    See BR-DrS 136/01
503
    The TDG is now published in the Federal Law Gazette (Bundesgesetzblatt) 2001 part one No.70 of 20 De-
cember 2001 on pages 3721 and following as part of the Act on the legal framework for Electronic Commerce –
Electronic Commerce Act (Gesetz über rechtliche Rahmenbedingungen für den elektronischen Geschäftsverkehr


                                       Thomas Hoeren-Internet Law                                       165
,, $SSOLFDEOH UHJXODWLRQV

Among the applicable regulations, particular attention should be paid to the provisions of spe-
cial fair trade laws, the Unfair Competition Act (UWG) and the Trademark Act.

 6SHFLILF UHJXODWLRQV ZLWK OHJDO FRPSHWLWLYH FRQWHQW

In Germany there are a number of fair trade regulations which, being special laws, restrict
Electronic Commerce for certain circles. It should be noted that the Discount Act and the Bo-
nus regulations have lost their significance under pressure from the E-Commerce- Direc-
tive.504


a) Media Services State Treaty and the Tele-services Act

Included here are the regulations in the Media Services State Treaty which by way of the
category of violation of the law and § 1 UWG are relevant to competition law. The Media
Services State Treaty505 that came into effect on August 1st 1997 is applicable to such services
which are directed at the general public (§ 1 I 1 MDStV).
To the general examples stated in § 1 II Nr. 4 of the Treaty also belong online services, but
only if they mainly deal with the individual exchange of goods and services or the pure trans-
fer of data. § 9 MDStV contains the advertising prohibitions. Prohibited is for instance adver-
tising which is also directed towards children or juveniles and which harms their interests or
exploits their inexperience (§ 9 I MDStV)506.
In my opinion, this regulation is highly questionable. It is too vague: What are the interests of
children and juveniles? Are they to be defined through empirical study or by using the norma-
tive perception of an adult “intrest guardian”? At what point is the inexperience of juveniles
being exploited? Juveniles are inexperienced in most areas - at what time one can speak



– Elektronischer Geschäftsverkehr Gesetz – EGG) of 14 December 2001. The amendments to the old TDG come
into force on the day after the announcement of the new Act and therefore on 21 December 2001.
504
     Gesetz zur Aufhebung des Rabattgesetzes und zur Anpassung weiterer Vorschriften vom 23. Juli 2001 (
BGBl. I 2001, 1663); Gesetz zur Aufhebung der Zugabeverordnung und zur Anpassung weiterer Vorschriften
vom 23. Juli 2001 (BGBL. I 2001, 1661). See also Karenfort/ Weißgerber, MMR- Beilage 7/ 2000, 38; VT- DrS
14/5441 and 14/ 5594). See also the recommendations of the Economic Committee on the Law Governing Dis-
counts (BT- DrS 14/6459) and of the Legal Committee on the Ordinance of Bonuses (BT- DrS 14/6469).
Concerning the consequences see also: Berlitt, WRP 2001, 349 ff.; Berneke, WRP 2001, 615 ff.; Cordes, WRP
2001, 867 ff.; Heermann, WRP 2001, 855.; Hoß, MDR 2001, 1094ff.; Meyer, GRUR 2001, 98 ff.
505
    From now on quoted in the version bythe Landtag of Baden-Württemberg (as the first state), GVBl. BW of 10
June 1997, p. 181
506
    I will discuss the separation principle, stated in § 9 II of the State Treaty concerning Media Services, later on.
                                             Thomas Hoeren-Internet Law                                           166
about a misuse of this normal state of mind? When is advertising “also” directed towards
children and juveniles? Should it depend on the subjective intention of the provider? It would
probably be difficult to determine this. Or is it the state of mind of an objective juvenile re-
cipient which is most significant in order to determine that a web site is an offer of interest to
them?
In addition it must be questioned when a business falls under the State Treaty concerning Me-
dia Services. As already stated, the Treaty is not applicable to services which primarily deal
with an individual exchange of goods and services or transfer of data.
Neither the regulations of the States nor the State Treaty is applicable for instance to internet-
banking, because this involves an individual service between bank and every single client.
More difficult is the classification of a business’s advertising website. This web site is not
primarily dealing with the pure transfer of data, such that the service could generally be clas-
sified as a media service. But the field of application of the TDG also has to be considered,
because it explicitly regards offers for circulation of information concerning goods or service
offers as a tele–service to which the federal regulation is applicable ( § 2 II Nr. 2 TDG). In-
asmuch as the State Treaty concerning Media Services and the Tele-Service Law demarcate
each other through their fields of application507, one has to proceed on the assumption that
businesses dealing with an advertising website are not subject to the conditions of the State
Treaty concerning Media Services in order to avoid unacceptable contradictions.


However, the TDG contains relevant regulations concerning the competition and online ad-
vertising. When making business offers, the service providers have to give their names and
addresses (§ 6 TDG). Additionally, corporations and associations also have to give the name
and address of the authorized representative as well as their legal form.
As soon as a website can be qualified as a business letter, even more declarations have to be
made in order to comply with the Corporations Act. In so far as texts are edited journalisti-
cally, they are subject to theconditions of the MDStV as discussed above. According to § 6
the first and the surname of the authorized and responsible person, his or her address and his
or her field of responsibility are to be given. 508
Furthermore the revision of the TDG as a result of the E-commerce Act of December 2001509
is important. According to this, it is not longer sufficient that the providers give their names


507
    See § 2 IV Nr. 3 TDG
508
    See the decision of OLG Wien, 7. 12. 2000, MR 2000, 363, which states that a homepage which is regularly
adjusted to a pattern of a newspaper is to be regarded as a “periodical medium”.
509
    BGBl. 2001 I Nr. 70 of December, 7th , 2001, S. 3721- 3727.
                                           Thomas Hoeren-Internet Law                                   167
and their addresses (as well as the name of the authorized representative) (§ 6 S. 1 Nr 2 TDG).
Now also necessary are other declarations like an e-mail address and a phone number ( “dec-
larations which make a fast electronic contact possible and which enable immediate commu-
nication, as well as an address for electronic mail” ( § 6 S. 1 Nr. 2 TDG)).
The obligation to give the registration number ( § 6 S. 1 Nr. 4 TDG) and the turnover tax
identification number should also be noted. Violations of § 6 TDG justify claims by consumer
protection associations for an order to refrain.510


The details of the providers’ identification are stated in the “Convention for provider identifi-
cation in E-Commerce with ultimate consumers”.
These obligations to give information correspond with the rule of “netiquette”, which states
that every provider has to be identifiable. Firstly, in this way the user gains a minimum of
transparency and information and secondly, the pursuit of legal action in a dispute is made
easier. This “Consumer Protection Rule”511 is not applicable to private providers, not even if
they occasionally purchase or sell goods through the internet.


Also an intensely discussed aspect of the MDStV is the right to publication of a counter
statement, which is stated in § 10 MDStV. As previously mentioned, the MDStV is applicable
to those electronic media-services which address the public and are not concerned with indi-
vidual communication. These are for example electronic press and other information offers,
addressed to the public at large.
If the texts offered are editorial-journalistic and periodically published works, a right exists to
have a counter-statement published concerning allegations of fact, because § 10 [1] MDStV
refers to § 6 [2] MDStV. Periodical publication can be confirmed if the work is published
“continuously”; regularity of publication is not necessary. § 10 MDStV is oriented on edito-
rial and broadcasting rules, but extends the field of applicability of the right to have a counter-
statement published to the statements in the form of announcements too. The limitation to
periodically distributed texts results from the circumstance that an editor of a regularly pub-




510
   OLG München, Judgment of July 26th, 2001, BB 2001, 2500= MMR 2002, 173 = K&R 2002, 256.
511
   For further obligations to give information in the area of consumer protection see Art. 4, 5 of the directive
97/7/EG of the European Parliament and the Council of May, 20th, 1997 on the Protection of Consumers in re-
spect to distance contracts, Abl. Nr L 144 P. 19 („Fernabsatzrichtlinie“) and § 312 c BGB in connection with the
“Regulation concerning obligations to give information“ which was passed because of Art. 240 EGBGB.
                                          Thomas Hoeren-Internet Law                                        168
lished and distributed text has a special influence on the formation of public opinion, which
justifies the right to have a counter-statement published.512


b) Conduct rules

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Beyond § 1 UWG the conduct rules under the scope of oblivion of profession can also be the
subject of competition analysis.513 Firstly the professional codes of conduct of the free profes-
sions should be considered.514


For example, on a law firm’s advertising is permissible in so far as it is in general for firm
brochures and circulars within the scope of § 43b BRAO and §§ 6 seq. of the lawyer’s profes-
sional conduct rules.515 But it must have a respectable design and contain strictly informative
content.516 Therefore a website may contain information about the office, about 3 fields of
activity and 2 further focuses of interest of each lawyer as well as resumes and pictures of the
lawyers. Furthermore it can contain information about chosen fields of law and articles and




512
    See LG Düsseldorf, court order of 29. April 1998 – 12 O 132/98, MMR 1998, 376; RDV 1998, 176; AfP
1998, 420.
513
    See BVerfG NJW 1998, 191, 192; NJW 1990, 2122, 2123 (Lawyers); BverfG GRUR 1986, 387/389; NJW
1994, 1591 (Doctors), OLG Dresden WRP 1998, 320; LG Nürnberg-Fürth NJW-CoR 1997, 229; Hoeren WRP
1997, 993 (tax advisor, auditor); further the detailed description and discussion of permitted and non-permitted
professional advertisement measures in Hoeren/Sieber/Marwitz, 11.2 no. 201 – 315.
514
    See on advertisement by lawyers on the internet Edenhofer, CR 997, 120; Scheuerle, NJW 1997, 1291;
Schmittmann, MDR 1997, 601; Wagner/Lerch, NJW-CoR 1996, 380; For tax advisors see Wittsiepe/Friemel,
NWB subject 30, 1047.
515
    See also the judgment of the BGH of 10.4.2001 – I ZR 337/98, which approves circulars by lawyers to parties
other than their clients as legal.
516
    OLG Koblenz, WRP 1997, 478, 480.
                                           Thomas Hoeren-Internet Law                                       169
speeches by the lawyers.517 An online advisory service is admissible only within the frame of
an existing client relationship. Apart from that an advisory service – e.g. within public discus-
sion groups – would infringe conduct rules. 518 Providers are not allowed to publically encour-
age members of their forum to set up contact with a particular law firm and to promote the
advisory services of a lawyers for a lump sum.519 Concerning electronic contact with the cli-
ent the discretion duties (§ 43a [2] s. 1 BRAO) must be considered; therefore it is necessary to
use data encryption and to have an adequate data security concept (including firewalls).520
Notaries are not allowed to advertise for themselves; on the internet they may only mention
their local field of activity and possibly publish articles on important legal problems.521 Be-
yond this a lawyer can make use of commercially appealing ideas in the choice of the firm
name domain and may for example present him- or herself on the internet under “recht-
freundlich.de” (right-friendly).522 There are also no reservations against the use of the slogan
“The firm for protecting personal assets” on the internet.523 The use of generic domains by
lawyers has not yet been decided by the higher court but will be soon.524 Further it is not clear
whether due to the confidentiality duty (§43 [2] s. 1 BRAO) with reference § 203 [1] no. 3
StGB lawyers must encrypt their emails to clients.525


The legal situation of lawyers is similar to tax consultants and auditors. § 22 of the new pro-
fessional conduct rules for tax consultants states that the general advertising rules apply to net
services. Therefore it can be inferred that homepages as part of the global network do not in-
fringe §57a StBerG (Tax Advisory Act).526 The professional conduct rules for auditors also
only forbid purely commercial advertising, i.e. advertising that uses the methods of industry
and trade (§34 [2] and [3]).527 In this auditors can impart pertinent information via the inter-
net, as long as it does not directed at obtaining a particular job.528




517
    Likewise Scheuerle, NJW 1997, 1291, 1292; Schmittmann, MDR 1997, 601, 603.
518
    See Hoeren/Sieber/Marwitz, 11.2 no. 50.
519
    LG München I, court order of 25. März 1996, CR 1996, 736.
520
    See Koch, MDR 2000, 1293, 1297.
521
    See KG, 19.5.2000, MMR 2001, 128
522
    OLG Celle, 23. 8. 2001, MMR 2001, 811.
523
    LG Berlin, 25.4.2001, NJW-RR 2001, 1643.
524
    The case of the vanity number R-E-C-H-T-S-A-N-WA-L-T (Lawyer) at the OLG Stuttgart, MMR 2000, 164.
525
    See (negative) Härting, MDR 2001, 61.
526
    See LG Nürnberg-Fürth, NJW-CoR 1997, 229.
527
    See e.g. the case of the LG München II (judgment of 31.8.2000, CR 2001, 345), in which a tax consultant
praised himself on his homepage as an “extraordinary tax consultant” with an “exclusive service profile”.
528
    See also LG Düsseldorf, BRAK-Mitt. 1997, 95 and BRAK-Mitt. 1996, 219.
                                         Thomas Hoeren-Internet Law                                       170
The legal situation for medical professions is more difficult. Here the special duties of confi-
dentiality defined by § 203 StGB must be considered, which forbid the transfer of data proc-
essing to external parties without the consent of the patient. Pharmacists are not allowed to
advertise medications and certain body care products.529 Doctors and dentists are still subject
to a very strict prohibition on advertisement. Only neutral and informative data as defined by
§ 36 of the doctors’ professional conduct rules is permitted, so for example surgery hours, the
address, medical titles.530 Recently, referring to specializations has been allowed. According
to the OLG Köln531 a dentist infringes conduct rules if he advertises himself as a specialist in
almost every area of dentistry and if he brings attention to his activities as a consultant his
participation in further education programs.532 Absentee diagnoses are prohibited by § 9 of the
Heilmittelwerbegesetz (Medicament Advertising Act - HWG). This explains the severity of
the OLG Koblenz which forbad a dentist to create a homepage with annotations e.g. on the
practice, on the medical treatment of dental illness and on dental care.533 There are similar
restrictive regulations for notaries and architects.534


c) Advertisement limitations for special products

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The German competition law has a large number of advertisement limitations for certain
products, which also have to be followed in online-marketing. The extensive regulations for
the advertisement of medications in the Medication Advertisement Act (HWG) must be con-
sidered. § 10 [1] HWG already leads to a lot of problems in advertising on the internet, be-
cause it permits the advertisement of prescription-only drugs only when directed at doctors,


529
    See von Czettritz, Pharma Recht 1997,86.
530
    See Hoeren/Sieber/Markwitz, 11.2 no. 287.
531
    Judgment of 9.3.2001, MMR 2001, 702
532
    Source: FAZ of 13.6.2001, p.31
533
    OLG Koblenz, WRP 1997, 478 = ZIP 1997, 377 with annotations by Ring. See also the judgment of the
lower instance LG Trier, WRP 1996, 1231 = CR 1997, 81 = ZUM 1997, 147.
534
    See Schmittmann, MDR 1997, 601, 602.
                                         Thomas Hoeren-Internet Law                              171
dentists and similar approved people.535 Even if the user confirms vie e-mail that he or she is
approved, this cannot legitimate a call for advertisement as defined by § 10 HWG; as a result
this regulation is de facto a prohibition on the advertisement of prescription-only drugs on the
internet. The only solution is to give passwords to qualified persons in advance and so to cre-
ate a closed group of users for the database. Every doctor and pharmacist receive an access
code upon showing his or her qualification certificate. This can be problematic, especially
when it results in a time-consuming process of submission and examination of the certificate.
An alternative could be to use cookies. But these only help to recognize previously registered
users; the process of submission and examination would not be made any easier. An idea may
be to use a digital signature which allows with the use of an attribute-certificate the storage
and electronic verification of the details of the professional licence (see §7 II SigG). Finally a
joint portal of all medication producers could be considered for examination of the qualifica-
tion; but here antitrust laws must be taken into account.


In the area of advertisement of medications, the restrictions for advertisement outside the field
defined in § 2 need to be taken into account. § 11 no. 1 forbids references to professional arti-
cles. Quite dangerous in this context are links to such articles, for example. Further it is for-
bidden to use an advertisement on the internet that contains foreign-language professional
terms. Problematic are also virtual guest books, as far as positive comments of third persons
about medicaments can be made; such a website is not permissable according to § 11 no. 12.
§12 forbids public advertisement related to certain diseases (e.g. heart and nervous diseases).
In this area comments on the recognition, prevention or the alleviation of diseases is not al-
lowed as long as they are combined with an advertisement for medications. There is very little
discussion about the extent of the Medication Advertisement Act in relation to foreign inter-
net services. §13 admits advertisement for foreign companies only if they can name a respon-
sible person within the EU. This regulation would, according to its text, result in US-
pharmaceutical companies having to bear §13 in mind for any internet service. However it is
inherent to the nature of advertising to question who the target is. §13 can therefore only be
applied if the homepage’s target is the German market.


Furthermore it shoiuld be forbidden to set up an online-pharmacy that makes cross-border
sales of medications to German customers.536 Here there is an obvious opportunity to exploit


535
      See critically Albrecht/Wronka, GRUR 1977, 83, 95
536
      LG Frankfurt, ZIP 2000, 2080; see Koening/Müller, WRP 2000, 1366.
                                          Thomas Hoeren-Internet Law                          172
the internet for one’s own profit. Hence medications globally are put on the market at great
differences in price. At the same time in Europe there are divergent systems for the sale of
medications. Germany insists on marketing certain medications in pharmacies only, and pro-
hibits distribution by mail-order (43 I Remedy Act – AMD). The situation for example in the
Netherlands is different, there such a strict prohibition on mail-order does not exist. Now, a
start-up wanted to make the most of these differences in regulations by setting up a mail-order
trade in medications in the Netherlands, but which was available to everybody. The LG
Frankfurt537 and the OLG Frankfurt538 forbade such pharmacy services because of an in-
fringement of §43 [1] AMG and §8 [2] HWG. The LG Berlin permitted this service,539 but the
Court of Appeal did not agree.540 The LG Frankfurt first of all stated that the international
jurisdiction results from the place where the offense succeeded (Art. 5 no. 3 of the regulation
44/2001). It depends on the place where the medium internet can be accessed as directed and
not just randomly. Conclusions for another interpretation of art. 5 no. 3 EuGVÜ (European
Jurisprudence Agreement) cannot be drawn from the EU-directive 2000/31/EC on certain
aspects of services of the information society (e-commerce-directive). The plaintiff is entitled
to a claim for injunction which results from §1 UWG in connection with §§43 I, 73 I AMG
and §§3a, 8 II and 10 HWG. By delivering medications which can only be purchased in
pharmacies to other European countries the defendant infringed the German prohibition on
mail-order. The defendant cannot rely on § 73 II no. 6a AMG, which states that medications
may also be bought in other European countries. This is because this provision requires that
the distribution takes place without “commercial or professional procurement”, but this was
exactly the case for the defendant. Art. 28 ECT is not infringed because the principle of the
free delivery of goods is limited by the principle of protection of health (Art. 30 ECT). Fur-
ther, there is no infringement of the principle of “place of origin” as stated in art. 3 I of the e-
commerce-directive. According to art. 2 h) of the directive national provisions for the delivery
of goods are not covered by the coordinated area of the directive. This makes it clear that the
directive only concerns activities which are actually carried out electronically. This is the case
for the signing of the contract via internet but not for the delivery of the preparations. Mean-
while the LG Frankfurt called on the EuGH (ECJ) to have clarified whether the German pro-



537
    LG Frankfurt, 9.11.2000, K&R 2001, 153; MMR 2001 243 = K&R 2001, 160; see also Koenig/Müller, WRP
2000, 1366.
538
    Judgment of 31.5.2001 – 6 U 240/00
539
    LG Berlin, 7.11.2000, MMR 2001, 249 = CR 2001, 268. Similar LG Stuttgart, 4.1.2001 – 27 O 548/00 (un-
published).
540
    Judgment of 29.5.2001, CR 2001, 556 (headnotes).
                                        Thomas Hoeren-Internet Law                                    173
visions for trade in medications are compatible with European law.541 The decision will not be
handed down before the end of 2002.


The situation of advertising tobacco is difficult too. § 22 [1] LBMG provides a general adver-
tisement prohibition for cigarettes, cigarette-similar tobacco products and tobacco products
which are meant for the making of cigarettes by the consumer, as far as advertisement is car-
ried out in radio or TV. The mentioning of radio and TV is highly charged because in the pre-
sent discussion internet services are seen as at least radio-similar media services. Here the
details of the discussion will not be expanded on. But there is a need for clarification whether
§ 22 [1] LBMG should be applied analogously to radio-similar services at all. This provision
must be interpreted narrowly because it is an exception clause to the general basic right of
freedom of occupation as defined by art. 12 [1] GG. Therefore in my opinion it can only be
applied to radio services themselves but not to the media services separately regulated by the
Media State Treaty. This can only be different where a media service exceptionally has to be
qualified as radio. If for example Bayern5 or SWF3 can be received via the internet the adver-
tisement prohibition for tobacco advertisements must be applied.542


d) Online auctions and the industrial code

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One of the big winners of e-commerce are online auctions. The market leader in Germany is
Ebay; and there are a lot of other services which sell everything from last-minute-travel and



541
   Court order of 10.8.2001 – 3/11 O 64/01.
542
   §22 [2] no. 1 LBMG makes their legal situation even more complicated. According to this cigarette advertis-
ers are also prohibited under certain circumstances from using other advertising media. The BGH drew the con-
clusion in its decision of 9. December 1993 (GRUR 1994, 304) that advertisement for cigarettes in teenage
magazines is forbidden. But it is questionable if such an advertisement is also forbidden in electronic magazines
which address teenagers through their content and/or design.
                                           Thomas Hoeren-Internet Law                                        174
rented cars up to electronic products to the highest bidder over the internet. However the le-
gality of such transactions is doubtful.


According to §34b Industrial Code (Gewerbeordnung – GewO) the carrying-out of an auction
is subject to a permit from the trade supervisory boards. But it is not clear what is meant by
“auction” as stated by the GewO. The Act does not define the term. The application of the
GewO to online auctions is therefore also contentious. The Federal-State Commission for
trade regulations declared in a statement that it this is not a case of an auction because the
dealings just concern a sale for the highest offer.543 The Hamburg Regional Court rejected
this opinion in a more recent decision.544 The requirements for an auction are a purchase for
the highest offer and a procedure of mutual outbidding.545 Precisely this is the case for the
internet auctions. There is no need for a local limitation of the event;546 it is sufficient if the
auction takes place in a virtual room.547 Therefore internet auctions are auctions as defined by
the Industrial Code. As a result these auctions require official approval.548 §4 TDG which
states that tele-services are free from licensing and registration does not conflict with that.549
This provision only relates to general conditions of permissability, which concern every tele-
service. According to the constellation special provisions for permissability remain un-
touched. Especially in online auctions there is a need for protection of consumers, because the
internet environment suggests a special need for speed and consumers can and must react
quickly. Therefore, and because of the object and purpose of the license requirement there are
no doubts about the application of §34b GewO. The Wiesbaden Regional Court550 decided for
the protection of auction operators that the operator of an internet auction can rely on the in-
formation of the competent municipal authorities that he does not need an authorization ac-
cording to §34b GewO. The Berlin Court of Appeal saw the operation of an online auction as
an infringement of §34b GewO but not an infringement of §1 UWG.551


Though online auctions are not auctions as defined by §34b GewO they can still call them-
selves “auctions”. The OLG Frankfurt did not find a deception in the sense of §3 UWG in

543
    See the report of Fuchs/Demmer. GewArch 1997, 60, 63.
544
    Judgment of 14. April 1999 – 315 O 144/99, K&R 1999, 424 = MMR 1999, 678 with ann. Vehslage. See also
Stögmüller, K&R 1999, 391.
545
    See also Landmann/Rohmer/Bleutge, GewO (I), 37. First completion delivery, January 1999, §34b no. 6.
546
    Though the Federal-State Commission for trade regulations said so in the statement named above.
547
    So Stögmüller, K&R 1999, 391, 393.
548
    Differing Bullinger, WRP 2000, 253, 255.
549
    Differing Stögmüller, K&R 1999, 391, 393.
550
    LG Wiesbaden, 13.1. 2000 (final), MMR 6/2000.

                                      Thomas Hoeren-Internet Law                                     175
making use of this term. The term “auction” has become ambiguous. It can also cover sale
events that are not auctions in the legal sense.552 The Berlin Court of Appeal referred similarly
to the fact that internet users nowadays are able to recognize the between these and classical
auctions, particularly as they inform themselves about the conditions of such internet auctions
anyway.553 Furthermore it must be noted that a clause of eBay, which states that the contract
is automatically concluded with the highest offeror, was declared null and void by the LG
Berlin because of an infringement of § 307 BGB.554 Further the OLG Hamburg recently de-
cided555 that the setting of a lowest offer at 1,- German Mark for a brand-name device which
costs 4598,- DM according to the recommended retail price of the producer infringes compe-
tition law due to an exaggerated enticement. The auctioneer used a “moment of gamble-
speculation” in order to attract special attention at the expense of the manufacturer of the de-
vice with a lowest offer that could hardly be beaten.


e) Powershopping, co-shopping and gambling

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Newer forms of virtual shopping are also under the supervision of competition protectors. The
OLG Hamburg556 and the OLG Köln557 prohibited so-called powershopping because it in-
fringed the (meanwhile repealed) Act Governing Discounts and the UWG. Powershopping or
CoShopping558 aims to bring people who want to buy the same product together within a cer-
tain period of time; then the retailer grants quantity discounts. The discounts depend on the
number of consumers; usually the discount is about 30%. The customers do not know at the
beginning what discount they will be granted at the end. According to the courts powershop-

551
    Judgment of 11.5.2001, K&R 2001, 519. See also Mankowski, EwiR 2001, §34b GewO 1 /01, 1053.
552
    OLG Frankfurt, 1.3.2001, NJW 2001, 1434 (not final).
553
    Judgment of 11.5.2001 – 5 U 9586/00
554
    LG Berlin, 20.12.2000, CR 2001, 412 (not final). Different meanwhile the Court of Appeal, 15.8.2001 – 29 U
30/01, NJW 2002, 1583 = MMR 2002, 326 (headnote).
555
    Judgment of 5.7.2001 – 3 U 35/01.
556
    OLG Hamburg, 18.11.1999, WRP 2000, 412 – Powershopping; also judgment of 14.8.2000, MMR 2001, 41
= K&R 2000, 556; similar LG Hamburg, 4.7.2000, CR 2000, 77; LG Hamburg, 18.10.2000 – 416 O 209/00
(unpublished),
557
    OLG Köln, 1.6.2001, 6 U 204/00, CR 2001, 545 with ann. Leible/Sosnitza. Similar LG Köln, 25.11.1999, CR
2000, 318. Also LG Nürnberg-Fürth, 8.2.2000, MMR 2000, 640. Differing Menke, WRP 2000, 337.

                                        Thomas Hoeren-Internet Law                                        176
ping as such is an infringement of the Act Governing Discounts; advertising at several price
levels subject to the number of prospective buyers infringes § 1 UWG because of intense
aleatory elements and in regard to the value advertisement involved. But these judgments are
not yet final; in the case of the OLG Hamburg an appeal has been lodged at the BGH.559


Still unclear is the permissibility of so-called reverse auctions, where retailers can underbid
each other below a highest price that was previousl fixed by a customer. The OLG München
permitted a reverse auction if the lowest bidder just makes an offer for a later signing of a
contract.560 Further, online snip markets are not allowed - where the original price is reduced
daily by a higher percentage, because of the prohibition on encouragement of a passion for
gambling (§1 UWG).561 In contrast the “Kartenfuchs” , an internet portal where prospective
buyers of group tickets can locate each other and form groups, is allowed.562


The close relationship of powershopping to gambling prompts a few lines on the latter phe-
nomenon. According to §33 GewO the carrying out of a game with a possibility of winning
something is subject to authorization. Lotteries and games of chance as defined by § 284
StGB need a special authorization. If somebody does not have this authorization he or she
commits a criminal offense. These regulations are also applicable to the advertisement of
sports bets on the internet.563 The operation of online casinos from abroad involves commit-
ting a criminal offense according to German law; warnings on the website for German per-
sons do not alter this fact. The operator of the domain name server can be accused too as an
accessory to the crime.564


f) The price quotation ordinance and further duties to inform.

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558
    See http://www.powershopping.de; http://www.kontorhouse.com.
559
    But see the decision of the BGH, WRP 2000, 724 – Space Fidelity, WRP 1986, 381 – reverse auction and
WRP 2000, 424 – Rubbelaktion.
560
    OLG München, 14.12.2000, MMR 2001, 223.
561
    OLG Hamburg, 7.12.2000, CR 2001, 340. See also LG Hamburg, 19.4.2000 – 315 O 156/00 (unpublished).
General opinion BGH, GRUR 1986, 662 – Umgekehrte Versteigerung.
562
    LG Frankfurt, 7.11.2000, CR 2001, 125 with ann. Leible.
563
    OLG Hamm, 24.9.1998, SpuRT 1999, 114 with ann. Summerer. Similar OLG Hamburg, 10.1.2002 – 3 U
218/01. http://www.jurpc.de/rechtspr/20020122.htm
564
    OLG Hamburg, 4.11.1999, CR 2000, 385.
                                        Thomas Hoeren-Internet Law                                   177
The provisions of the price quotation ordinance (Preisangabenverordnung - PAngV), espe-
cially § 1 PAngV, are in effect on the internet too, (art. 8 – 10 IuKDG) which is of particular
importance for internet banking. Every service must state the fee for use of the service before
allowing access by the end user. Art. 9 of the Act states that every offer which is transmitted
to the screen must be provided with a price quotation. If a service is provided via screen dis-
play and calculated per unit the price of continuous use must be offered free of charge as a
separate display. The consumer must be continually informed of the current price of online
use.
The price for products which can be found on a website must also be stated exactly. This
regulation is infringed if for example somebody accepts reservations for air journeys and has
the customers themselves fix the price.565
Together with the duties to inform of § 6 [1] of the new Tele-Services Act of December
2001566 a company must state on its website at least the
       • firm name and address
       • fees for use of the service
       • board of management
       • telephone number; e-mail address
       • information on the relevant supervisory authority
       • trade register number
       • turnover tax identification number.


There are special problems with the use of e-mail in fulfilling the duties to provide informa-
tion. In particular § 37a [1] HGB (Commercial Code) must be taken into account, according
to which sole traders must state in business letters to certain recipients the company name, the
legal form of the company, the residence, the trade register court and the trade register num-
ber. Similar requirements apply to the general partnership, the limited partnership, the part-
nership, the private limited company and the stock corporation (§§ 125a, 177a HGB; § 7 [4]
Part gg, § 35a GmbHG; §80 AktG). The Corporation Law states further that for a stock corpo-
ration every member of the managing board and the director of the supervisory board must be
named with their complete names (§80 [] s. 1 AktG). A GmbH has to name its manager (§35a
[1] s. 1 GmbHG). If this information is missing the trade register court can fix a fine (§37a [4]
s. 1 HGB; similar §§125a [2], 177a s. 1 HGB; § 7 [4] Part gg). Furthermore the stock corpora-


565
      OLG Düsseldorf, 9.11.2000, WRP 2001, 291.
566
      BGBl. I of 20.12.2001, p. 3721.
                                        Thomas Hoeren-Internet Law                           178
tion and the private limited company must also pay attention to the fine regulations of §407
[1] AktG and §79 [1] GmbHG. The regulations are also valid for e-mails which are used for
public communication in business. The obligation to publish the information required under
the duties is also assumed for order forms on the internet.567


g) B2B market places and antitrust law

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In the internet there is an increasing number of portals where buyers and sellers can trade.
Very often the buyers run these market places; they can then be seen as virtual purchasing
communities. Examples are Covisint,568 the market place for car producers, or CC-markets,
569
      a market place run by BASF, Degussa-Hüls, Henkel and SAP. Such demand-bundling in-
fringes antitrust laws (§1 GWB), if the demand competition between the companies is signifi-
cantly limited.570 Because of the speed of transactions however there should be not really be
any unfair competition. Besides, the efficiency effects involved in bundling must be consid-
ered. Below a market share of 15% the cooperation is harmless because of the low market
importance (§4 [2] GWB). In any case the observance of the following principles is deci-
sive:571
      • Non-exclusiveness of use
      • Non-discrimatory access
      • Existence and observance of sufficient security standards
      • Existence of other e-commerce platforms and software-applications for product man-
        agement.

567
    Rot/Groß, K&R 2002, 127 seqq.
568
    Decision of the BkartA (Federal Cartel Office) of 25.9. 2000, K&R 2000, 604 = WuW/DE-V 321 – Covisint.
569
    See the decision by the BkartA of 23. 11. 2000 – B3 – 76/00
570
    Jestaedt, BB2001, 581, 585.

                                       Thomas Hoeren-Internet Law                                      179
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Apart from the special rules of fair trading the general law on competition, above all §§ 1, 3
"Gesetz gegen den unlauteren Wettbewerb" (UWG - Act against Unfair Competition) has to
be observed. Three problems are foremost at the moment: forwarding commercial e-mails, the
separation requirement and the use of hyperlinks and frames.



a) Commercial e-mails

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      BkartA, order of 29. 6. 2001, WuW 2001, 1107 – BuyforMetals/Stell 24-7.
                                          Thomas Hoeren-Internet Law                      180
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5LFKWOLQLHQHQWZXUI LQ 005  

Since the boom in the internet and in particular the use of e-mail began, advertising has also
discovered the uses of this sector for its own purposes. To an increasing extent advertisements
are sent via e-mail, individually as well as mass-mailed. Unfortunately in most cases they are
unwanted.


To begin with it has to be noted that the German legislation on advertising is also effective for
foreign spammers (even if they have their registered office outside the EU - e.g. in the U.S. ).
One shouldn’t try to take legal proceedings against foreign offerors though, - it is in practice
pointless. This is because a German judgment, which could certainly be obtained against for-
eign spammers, would hardly be enforceable in countries outside the EU. By the way, enforc-
ing German judgments within the EU is also often a fiasco.


DD 2SWRXW

Some courts have not held spamming to be a disturbance constituting unfairness. The LG
(Regional Court) Braunschweig for example.held that promotion via e-mail is only immoral if
the addressee evidently objects to it572. Immorality could not be based on the single fact that
the addressee’s resources are being used unreasonably. The chamber was guided in the par-
ticular case of a commercial e-mail by the evaluation of Art. 10 [2] of the Distance Contract
Directive (97/7/EC of 20.5.1997). Art. 10 [2] of the Directive rules that the member states
shall ensure that means of distance communication, which allow individual communications
(e.g. e-mails) may be used only where there is no clear objection from the consumer. The AG
(County Court) Kiel had to decide a case of unwanted promotional mail send to private per-
sons, which it concluded was admissible. According to the court’s conception there was nei-
ther a violation of personal rights, nor a claim based on § 823 [1] BGB (Civil Code) nor a
negative right of information according to art. 5 [1] GG (Constitutional Law). No protective
law within the meaning of § 823 [2] was broken either. Due to the lack of transformation into
national law Art. 10 of the Distance Selling Directive was not qualified as an adequate protec-




572
   LG Braunschweig, judgment of August 11th 1999 - 22 -O-1683/99, MMR 2000, 50=CR 2000, 854 = AfP
2000, 513; similar also LG Kiel, judgment of June 20th 2000, K&R 2000, 514 = MMR 2000, 704; AG Dachau,
judgment of July 10th 2001, K&R 2002, 156 (regarding the B2B sector).
                                       Thomas Hoeren-Internet Law                                 181
tive law573. Here it has to be noted that the time period for transformation has now passed and
the Directive has been incorporated into the Distance Selling Act, so that the question con-
cerning the adequacy of the protective law will have to be reconsidered in the future. Admit-
tedly the AG Kiel did not consider competition law when deciding the case574


EE 2SWLQ

In contrast, the LG (Regional Court) Berlin575 and many others576 act on the assumption that
forwarding unsolicited e-mails with commercial content violates § 1 UWG.577 According to
the caselaw regarding fax transmissions the customer does not have to put up with promo-
tional messages, if there is no business connection between sender and recipient and the
sender cannot assume on any other grounds that the addressee has consented to the forward-
ing via fax578. The fax caselaw has been continued in the question whether unsolicited promo-
tional mailings via interactive videotext (BTX) are allowed. The Federal Supreme Court
(BGH) emphasized in a fundamental decision that such promotional mailings are anticompeti-
tive due to the nuisance caused to the BTX-user.579 When transferring this caselaw it is ques-
tionable whether the forwarding of e-mails is an unreasonable nuisance for the addressee.
Different from the old interactive videotext-sector580 any e-mail in the internet sector can be
marked as commercial (by the label "com" or a pertinent indication in the subject). Moreover
the user can search all received mails with automatic filters, identify any mail with freely de-

573
    AG Kiel, MMR 200, 51.
574
    Similar AG Kiel, judgment of June 20th 1998, MMR 2000, 704 = CR 2000, 848 = DuD 2000, 737 = K&R
2000, 514.
575
    See e.g. decision of 2nd April 1998, CR 1998, 6213 with remarks by Moritz; decision of 14. May 1998, NJW
1998, 3208 = MMR 1998, 491 = RDV 1998, 220; judgment of 13 October 1998, CR 1999, 187 = MMR 1999,
43 with remarks by Westerwelle; judgment of 7 January 2000, NJW-RR 2000, 1229; decision of 30 December
1999, MMR 2000, 571; decision of 30 June 2000, MMR 2000, 704; judgment of 23 June 2000, MMR 2001,60 =
CR 2000, 854 = K&R 2000, 517; judgment of 30 June 2000, MMR 2000, 704.
576
    See e.g. LG Traunstein, decision of 18 December 1997, NJW 1998, 109 = RDV 1998, 115 = CR1998, 171;
LG Hamburg, judgment of 6 January 1998 — 312 O 579/97, not published.; LG Augsburg NJW-CoR 1999, 52;
LG Ellwangen, judgment of 27 August 1999, MMR 1999, 675 with approving remarks by Schmittmann; AG
Borbeck, judgment of 18 December 1998 — 5 C 365/98, not published; Hoeren, WRP 1997, 993; AG Berlin-
Charlottenburg, judgment of 21 March 2000, MMR 2000, 775; AG Essen-Borbeck, judgment of 16 January
2001, MMR 2001, 261 (Ls.); Ernst, BB 1997,1057, 1060; Ultsch, NJW 1997, 3007, 3008 Fn. 26;
Schrey/Westerwelle, BB 1997, 17; Marwitz, MMR 1999, 83,86; Wendel, Wer hat Recht im Internet?, Aachen
1997, 80; Gummig, ZUM 1996, 573.
577
    Similar in the United States CompuServe v. Cyber Promotions Inc., 962 F. Supp. 1015 (S.D. Ohio 1997).
578
    See BGH, NJW 1996, 660 = GRUR 1996, 208; OLG Hamm, NJW-RR 1990, 160; OLG Frankfurt, WRP
1992, 823; KG, NJW-RR 1992, 1193 = WRP 1992, 652; KG, CR 1998, 9 (with consideration of the scope of on
Art. 30, 59 EGV); OLG Stuttgart, CR 1995, 89 and 470; OLG Koblenz, WRP 1995, 1069. See also Unger/Sell,
GRUR 1993, 24; Schmittmann, WiB 1995, 109; Mutter, DZWiR 1995, 171.
579
    BGHZ 103, 317, 319 f. = NJW 1988, 1670 = GRUR 1988, 614 with remarks by Lachmann = JZ 1988, 612
with remarks by Ahrens = EWiR 1988, 608 with remarks by Alt. See also Jäckle, WRP 1986, 648; Wienke,
WRP 1986,455.
580
    See for this BGH, WRP 1992, 757 - BTX-Werbung II.
                                          Thomas Hoeren-Internet Law                                      182
finable key words and as delete them as the case may be. These considerations have led part
of the literature to the perception that e-mail-promotion has always been allowed due to the
lack of nuisance.581 According to differing views, e-mail promotion cannot be compared to
phone-582, telex583, fax584 nor interactive videotext585, but rather with advertisements placed in
the letter box586 - which is in principle admissible.587 This ignores the fact that one can place a
sticker on the letterbox which offers protection against advertising material. This is not possi-
ble with an e-mail address.


Sending unwanted e-mail to a private person infringes § 823 [1] BGB according to some in-
terpretations, if the recipient does not agree or his or her consent cannot be presumed within
the framework of an existing commercial connection. Beyond that, according to the LG (Re-
gional Court) Berlin588 and the AG (County Court) Brakel589 this is a violation of personal
rights of the recipient, who has a right to restrain according to §§ 1004, 823 [1] BGB, since §
1004 analogous not only protects property but all absolute rights within the meaning of § 823
[1] BGB, therefore including the general personal right. The LG Augsburg590 had to decide in
particular about the sending of unsolicited e-mail to a private person and affirmed a violation
of § 823 [1] BGB.


If businesspeople are involved as sender and recipient of an unsolicited e-mail, the LG (Re-
gional Court) Berlin591 additionally affirms an interference with business and grants a right to
restrain according to §§ 1004, 823 [1] BGB against the sender. A violation of competition law
according to § 1 UWG (Act Against Unfair Competition) was denied in this particular case,
because even though sending the promotional mail was considered to be a business-related
act, sender and recipient were operating in completely separate sectors so that any competi-
tion was lacking. A violation of property according to § 823 BGB [1] was denied by the LG


581
    Reichelsdorfer, GRUR 1997, 191, 197; Leupould/Bräutigam/Pfeiffer, WRP 2000, 575, 592.
582
    See for this BGHZ 54, 188 (Telefonwerbung I); BGH NJW 1989, 2820 (Telefonwerbung II); BGH GRUR
1990, 280 f. (Telefonwerbung III); BGHZ 113, 282 (Telefonwerbung IV); BGH GRUR 1995, 492 f. (Telefon-
werbungV).
583
    See for this BGHZ 59, 317.
584
    See for this BGH GRUR 1996, 208; OLG Hamm GRUR 1990, 689.
585
    See for this BGHZ 103, 203.
586
    See for this BGH GRUR 1973, 552.
587
    See Vehslage in DuD 1999, 22.
588
    LG Berlin, court order of 14. May 1998 – 16 O 301/98, MMR 1998, 491. see also AG Dachau, 10. July 2001,
MMR 2002, 179, according to which the unsolicited sending of an e-mail which can be recognized as spam mail
to an IT-company does not result in a claim for damages.
589
    AG Brakel, 11. February 1998 – 7 C 748/97, MMR 1998, 492.
590
    AG Augsburg, court order of 19. October 1998 – 2 O 34416/98, NJW-CoR 1999, 52.
591
    LG Berlin, 13. October 1998 - 16 O 320/98, MMR 1999, 43; NJW-CoR 1999, 52.
                                          Thomas Hoeren-Internet Law                                    183
Berlin in this case arguing that receiving an unwanted e-mail does not affect material goods,
but only time, labor and storage-space of the recipient or computer concerned. Those aspects
would as part of the assets not be protected as property, different from fax-advertising where
the ownership of paper and toner are regularly affected592.



FF 7KH KDUDVVPHQW HIIHFW

The sending of junk mail causes in any case costs for the recipient, not directly upon delivery
– in contrast to the receipt via telefax – but when the recipient goes online to check his or her
mailbox for e-mails. At this point telephone charges arise for connecting the computer with
the provider, who in addition can charge for the use of the server; so costs are incurred for the
reading of the junk mail. On top of this, the recipient cannot tell if an e-mail contains advertis-
ing or not. That means the he or she can only identify the junk mail as such by calling the
messages up and reading them one by one, which involves a certain amount of expense and
effort. The LG Berlin followed this view in 2 court orders.593


Harassment through the unsolicited sending of emails therefore has to be considered.594 At-
tention has to be paid to which consequences a more extensive use of e-mail services for
advertising purposes will have for the user. The sender who uses e-mail to a broader extent
for commercial purposes stresses the entire computer system which is involved in the
processing of e-mail services. The mail-spool at the receiving host overflows. As a
consequence the user’s storage capacity at the host is quickly exceeded; incoming mails
cannot be saved anymore. Regarding both the necessary storage capacity and the additional
telephone charges the user in the case of an unsolicited sending of commercial e-mails is
threatened by “net marketing overkill”. Hence competition law only permits “mail on
demand” – the so-called “opt-in”-version; without a request by the user nobody is allowed to
send junk mail on the internet.595
The lack of consent by the recipient is always a condition for the inadmissibility of the send
ing of unsolicited advertising via e-mail. The fact that users have voluntarily entered their e-


592
    Also LG Braunschweig, MMR 2000, 50 for the scope of § 1 UWG; AG Kiel, MMR 2000, 51.
593
    LG Berlin, court order of 2. April 1998 – 16 O 201/98 and court order of 14.5.1998 – 16 O 301/98, both
NJW-CoR 1998, 431.
594
    The opinion by Schmittmann in his annotations to the court order LG Traunstein, MMR 1998, 53, 54 on the
existing netiquette (an informal code of conduct) is doubtful; such a clearly worded regulation does not exist.
595
    See also LG Traunstein, court order of 14. October 1997 – 2 HKO 3755/97, MMR 1998, 53. meanwhile simi-
lar Ernst, BB 1997, 1057, 1060; Schmittmann, DuD 1997, 636, 639; Schrey/Westerwelle, BB 1997, supp. 18,
p.17; Ultsch, DZWiR 1997, 466, 470.
                                          Thomas Hoeren-Internet Law                                            184
mail addresses into a public e-mail list does not lead to the conclusion that they agree to the
sending of advertising via e-mail. Consent can not be assumed analogously to, for example,
consent to receiving bulk mail via post, because at the moment there is no effective way to
defend oneself against unsolicited e-mails. It is – as said before – not possible to add a note to
one’s email address similar to a sticker on the mailbox. The protection mechanisms that exist
at present are completely inadequate. Meanwhile so-called Robinson-lists where users can
register themselves also exist for the electronic area. But American direct marketing compa-
nies especially ignore these lists. Similarly useless are offline-mail readers, which wade
through the subject-lines to find typical advertising terms or person-related indices and filter
out mails from certain companies. But one must remember that when using automated filters
it is possible for solicited e-mails to be filtered out too. The service-provider can cancel con-
tracts with users who abuse their accounts by sending mass junk mail in order to put a stop to
the “spammers”.


The situation gets more complicated when junk mail is mixed up with other harmless ser-
vices. There are cases where a private person sends an advertisement as an attachment at the
end of a private e-mail.596 This is done in order to use a free-of-charge e-mail service or to
collect webmiles. In this case there are almost no ways to take action against the sender. An
advertising company can still be called to account under § 1 UWG (competition protection
act).


The recipients can defend themselves against spammers with full force. They can and should
admonish German and EU-providers. If the recipients are lawyers or call lawyers in, they can
make a lot of money with this written warning. Furthermore the recipients have a right of in-
formation according to German data protection law; spammers must disclose where they got
the e-mail address from and to whom they forwarded it.


GG 3RVVLEOH UHDFWLRQV RI WKH DFFHVV SURYLGHU

The access provider concerned can react at technical and legal levels.597 Technical measures
of defense can be for example:




596
   See in this context also the problem of attaching ads to free-SMS-services.
597
    See the infos at http://www.rewi.hu-berlin.de/~gerlach/falsche-email-adressen.html; http://www.dr-
ackermann.de/spam/faq.htm
                                           Thomas Hoeren-Internet Law                             185
      • Changing the internal mail-communication (between the main mail-server and the in-
         ternal mail-server) to another port than the default port 25, which is used for almost all
         spam-emails. For this purpose a formal coordination within the institution is necessary
         in order to transfer the (incoming and outgoing, internal and external) mails between
         the single mail-servers and the gateway-server on the correct port.
      • Rejection of outgoing mails which are sent by external users (outside one’s own net).
      • Use of signatures (hash value) for the identification of identical mails which are trans-
         ferred in large numbers to the mail-server.
      • The processing of the entire e-mail traffic via a mail-server which does not forward mail
         from unknown senders.
      • Installation of “blacklists” of sites that are open to spam, in order to check mails from
         these hosts for spam-content, e.g. by screening for suspicious keywords, inconsisten-
         cies (especially in mail-headers).
      • Rerouting of all mails which are received from outside to a single mail-server which is
         protected by appropriate efforts against abuse by spammers.


As a legal measure, the entire private law has to be considered. In civil law the unauthorized
use of a mail server to send spam-mails is an unlawful act as defined by § 823 [1] BGB: by
the unauthorized use of an other’s resources and computer’s capacity the spammer infringes
illicitly and negligently the property of the mail-service operator, if the mail-server does not
work properly anymore because of the increased amount of mails. Furthermore the abuse of
the mail-server can be an operation-related interference in the industrial undertaking of the
service operator.
From § 923 [1] BGB results the claim to compel someone to refrain from doing something (in
connection with § 1004 BGB: written warning) and the claim for damages. Other possible
bases for a claim are § 826 BGB (wilful immoral damage) and the infringement of a protec-
tion provision according to § 823 [2] BGB. Possible protection provisions are the elements of
an offense as defined by the StGB (Penal Code).598


For the criminal law point of view on the abuse of another’s mail-server to send spam-emails
the principle of determination stated by fundamental law must be considered: the conduct is

598
    see also the legal situation in Austria where the “opt-in”-principle is stated by criminal law (§ 101 TKG -
telecommunications act); see also Michael Gruber, Werbung im Internet, in: Gruber/Mader (eds.), Internet und
E-Commerce, Vienna 2000, 128seqq. Austrian judgments apply § 101 TKG within the scope of § 1 UWG; see
for example Commercial Court Vienna, judgment of 23. December 1999 – Cg 118/99i-4
                                           Thomas Hoeren-Internet Law                                       186
illegal if there is a sufficiently determined regulation where the respective act can be sub-
sumed. Possible regulations are – according to the concrete appearance – a criminal liability
according to § 265a (Obtaining Benefits by Devious Means), § 303a (Alteration of Data), §
303b (Computer Sabotage) or § 317 StGB (Interference with Telecommunications Facilities).


The obtaining of benefits as defined by § 265a StGB requires that the benefits of a telecom-
munications network serving public purposes are obtained. The benefit consists of the ability
to transmit and receive messages via technical communication systems. This also includes
mail-servers regardless of whether the system serves a mutual transmission of messages or –
as is the case with spam emails – only a one-sided transmission of messages. It is question-
able if the running of a mail server by a DFN-member (German Research Network) is part of
the benefit of a “telecommunications network serving public purposes”. But with regard to the
entire network “internet” this has to be answered in the affirmative; in connection with § 265a
StGB not the designated purpose of the particular facility (i.e. an individual mail server) is
decisive, but rather that of the whole telecommunication network. To fulfill the requirements
of the offense the benefit of the mail server must be obtained by devious means. Here it is
decisive that the spammer has eluded security measures which were installed by the operator
of the mail server against unauthorized use. These are for example the limitation of the relay-
function to local sender addresses. If the spammer fakes the sender data of the mass-mail in
order to have the mails sent, he or she thus eludes the security measures of the mail server.
But if the mail server can be accessed from outside on the standard port for SMTP, this is in
general not seen as a security measure whose defeat would be an obtainment by devious
means as defined by § 265a StGB. Besides, one must consider that § 265a StGB is an offense
against property. Criminal liability can be assumed only if the offender acted with the inten-
tion to use a service free of charge which is normally obtained in exchange for payment. This
could be the case if the use of the the mail server’s resources is conditional on payment for
external users and the spammer abuses the mail server of the facility concerned not only to
disguise his or her identity but also to gain free use of computing and transmission capacity.


§ 303a StGB is applicable if the spammer unlawfully deletes, suppresses, renders unusable or
alters data. An unlawful alteration of data is assumed if the spammer changes the configura-
tion of the respective relay-mail server so that it accepts mass mails and transmits them. If this
modification of the mail server leads to a breakdown of the system concerned, § 303b [1] no.
1StGB (Computer Sabotage) can be applied: a criminal act is committed if somebody inter-

                                    Thomas Hoeren-Internet Law                                187
feres with data processing which is of substantial significance to the business or enterprise of
another with the help of a data alteration as defined by §303a [1] StGB. If the mail server of a
research institute (which is also protected by §303b StGB following the prevailing opinion) is
blocked by a spammer who uses the mail server as a relay for the sending of mass e-mails, it
will be seen as an interference with a data processing facility. The ability of a mail server in
the research area to function is “of substantial significance” as defined by §303b StGB con-
sidering the increasing importance of electronic communication vie e-mail, so that the spam-
mer who abuses the mail server as a relay commits computer sabotage in the case of a wilful
act.


There are also some technical possibilities for avoiding spamming. Registration and order
forms of dubious benefit should be filled in with fake data. When creating homepages tags
like “mailto:xxx@yyy.zz” should be avoided, because address search engines of spammers
collect the addresses in these tags. Instead of this contact forms should be used. In forums or
newsgroups e-mail addresses of GMX, WEB.DE, Hotmail or yahoo which were created for
this purpose should be used. To state of the art belong checks of the computer for Trojans,
viruses and especially spy-ware (e.g. with AdAware). Parasites like for example CyDoor are
an invitation to spammers.


b) Separation rule

In electronic business the so-called “separation rule” is important. In the area of TV and radio,
state laws or agreements between the states provide that advertising must be separated from
editorial content with clear indications. It was questionable for a long time whether the so-
called separation rule should be applied to online services.599 In the meantime this question
was solved at least for the area of media-services in the media-services state treaty between
the states. If an online service is seen as a media-service as defined by the treaty, the adver-
tisements must be clearly recognizable and separated from all other content of the service (§ 9
abs. 2 s. 1). But it remains unclear if the separation rule can be transferred beyond media-
services to other services.600 The principle really ought to be applied carefully. Considering its
origins in press and radio law, its use in media-services which are produced in a similar way
to press or radio seems to be essential: where somebody is bound by the separation rule in


599
    Hoeren, Internationale Gesestze und das Wettbewerbsrecht, in: Jürgen Becker (ed.), Rechtsprobleme interna-
tionaler Datennetze, UFITA-series 137, Baden-Baden (nomos) 1996, 35-56
600
    see also Gummig, ZUM 1996, 573.
                                         Thomas Hoeren-Internet Law                                       188
effect in press and radio laws, he or she should not be able to avoid this binding law by pro-
viding internet-radio or a newspaper on the internet. Beyond this area an obligation does not
seem to be appropiate: how for example can the Deutsche Bank AG separate content from
advertisement on their homepage? Is for example an annual report content or advertising? In
my opinion the entire website must be regarded as advertisement, because even the most cas-
ual consumers know that they cannot expect to find marketing-independent information on
the website of the Deutsche Bank.


c) Hyperlinks

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Other competition law problems exist in the area of hyperlinks. For example: is a company
allowed to link from its homepage to another company’s homepage? Such cross-referencing
is the use of another’s trademark or business name as defined by §§ 14, 15 MarkenG (see be-
low). Furthermore the use of a link could also be seen as a copying of § 16 UrhG (Copyright
Law), if upon the activation of the link a new window with the external website appears.601
If the trademark owner has agreed to this proceeding then the use is admissible in any case.
Such an agreement can be implicitly assumed for the use of external internet-addresses.602
Hyperlinks are the identification mark of the World Wide Web. Everybody who presents
themselves and their company on the internet knows that other internet users can can make
references to this presentation with hyperlinks. In general you cannot defend yourself against
links that refer others to your homepage. But there are some exceptions to this principle based
on general competition law.


601
   LG Hamburg, 12.July 2000, MMR 2000, 761.
602
   OLG Düsseldorf, 26. June 1999, MMR 1999, 729 – Baumarkt; see also Viefhues in: Hoeren/Sieber (eds.),
Handbuch Multimediarecht, chap. 6, no. 197. Different LG Hamburg, 2. January 2001, CR 2001, 265, that re-
garded all hyperlinks between competitors as an infringement of § 1 UWG.
                                        Thomas Hoeren-Internet Law                                   189
DD /HDGLQ DGYHUWLVHPHQW

Problems arise if a competitor presents the external homepage beyond mere hyperlinks in a
very particular way. Examples of such presentations can be found at so-called virtual malls,
digital shopping malls, where the customer can choose from a large number of commercial
homepages and click from the central place to an individual company. In these malls the writ-
ing of the external company’s name – trademark or business name – is used and brought into
a general marketing context. Such a proceeding can be inadmissible due to the exploitation of
the reputation of a trademark belonging to another industry (§ 14 [2] no. 3 MarkenG). Ac-
cording to this, another’s trademark must not be used if the distinctiveness or the esteem of
the known trademark is exploited or encroached on without a good reason and in an unfair
way.
Furthermore such behavior could interfere with competition law in terms of open depend-
ence. § 1 UWG forbids a competitor to establish a link between the quality of its goods or
services and the goods of other competitors, in order to exploit their good reputation as a lead-
in for its own commercial purposes.603 A special presentation is therefore according to both §
14 MarkenG and § 1 UWG admissible only if it can be based on a special objective reason,
especially an overriding interest warranting protection.604 But this interest is out of the ques-
tion where virtual malls are concerned. Designing a “salesroom” for other companies always
serves marketing interests. Basically the customers are meant to assume that they are getting
connections to top companies in such malls. The impression is given that the mall-operator is
has intensive business contacts with the company mentioned. Therefore here the element of
unfair lead-in exists, which can be only be eliminated by obtaining the agreement of the af-
fected company.


EE )UDPHV LQOLQHOLQNLQJ

The question whether so-called "Inline-Linking" is illegal according to competition law is still
unsolved. In this case the internet address does not change when clicking on a link, so the user
thinks the service is still on the initial server. This can be done by using frames that remain on
the browser even though an external URL has been called up (so-called IMG Links). In such
cases it looks like the linked homepage comes from an operator other than the real one. This
proceeding is already dubious under copyright law regarding the right to be named by the

603
      BGHZ 40, 391, 398 – Stahlexport; 86, 90, 95 – Rolls Royce; GRUR 1969, 413, 415 – Angelique II.

                                          Thomas Hoeren-Internet Law                                   190
author (§ 12 UrhG).605 Further an infringement of existing trademark rights must be consid-
ered.606 However in a competition law point of view too this behavior will be unfair by means
of § 1 UWG, if the presentation of the external website in one's own frame is an adoption of
outside data that were put together by the efforts of another.607 This corresponds with the legal
situation in other countries which prohibit online-linking as misleading.608


In these cases a link-agreement is worthwhile. The content could be for example: "You are
allowed to link to our homepage. We insist that our websites are the only part of the browser-
window. Additionally the information must not be altered or distorted. The copying of texts,
parts of texts and illustrations requires our prior approval."


FF 'HHS OLQNLQJ

It is contentious whether a link infringes in general § 1 UWG. The OLG Celle regarded the
use of a large number of links to real estate ads which came from various places on the inter-
net as an unfair exploitation.609 In contrast the OLD Düsseldorf did not regard the choice of
single pages of another’s internet service by using links as an unfair exploitation.610 The LG
Hamburg regarded a link as inadmissible which takes over most of the functions of an inde-
pendent database into a separate window.611 Besides this the LG Hamburg generally regards
any link in business-to-business as unfair as defined by § 1 UWG.612


The OLG Köln generously permitted an internet search service which provided a listing of
press information according to the demands and instructions of a user. The direct access by




604
    BGH, GRUR 1976, 375 – Raziol.
605
    This aspect is ignored by Koch, GRUR, 1997, 417, 430. see also the British judgment in the case Shetland
Times v Shetland News of 24. October 1996, published in http://www.shetland-news.co.uk/opinion.html. Also
Chris Reed, Copyright in WWW Pages, in Computer aw & Security Report 13 (1997), 167.
606
    References also in Playboy Enterprises, Inc. v. Universal Tel-A-Talk, CIV. A. 96-6961 (E.D. Pa. 1998); com-
pare Tucker, Vanderbilt Journal of Law and Technology 4 (1999), 8seqq.
607
    see also OLG Celle, judgment of 12. May 1999, CR 1999, 523 with annotations by de Selby; LG Berlin, 21.
May 1996 - 16 O 171/96, CR 1997, 216 (headnote), which assumes that the adoption of job ads in one’s own
internet service is unfair.; LG Lübeck, 24.1.1998, NJW-CoR 1999, 429.
608
    See also Shetland Times Ltd. v. Wills, Scot. Sess-Cas. (Oct. 24, 1996), EIPR 1 (1996), 723; Ticketmaster
Corp. v. Tickets.com, 2000 US Dist. LEXIS 12987, 2000 WL 1887522 (C.D. Cal 2000).
609
    OLG Celle, 12. May 1999, MMR 1999, 480 with annotations by Hoffmann.
610
    OLG Düsseldorf, 29. June 1999, MMR 1999, 729 – Baumarkt.
611
    LG Hamburg, 12. July 2000, MMR 2000, 761 = CR 2000, 776 with annotations by Metzger.
612
    LG Hamburg, 2. January 2001, CR 2001, 265, which regarded any hyperlinks between competitors as an
infringement of § 1 UWG.
                                           Thomas Hoeren-Internet Law                                       191
the user to the information offered via deep-link was not assumed to be an infringement of § 1
UWG.613


GG +\SHUOLQNV LQ HOHFWURQLF SUHVV SURGXFWV

In this context the use of hyperlinks in electronic press products is problematic. A newspaper
which is present in the WWW can allow hyperlinks in single editorial articles to the home-
pages of companies which were named in the articles. According to the caselaw concerning
press law such a hyperlink is admissible only within the scope of journalistic information du-
ties. The separation rule is not infringed if the objective informing of the reader is in the fore-
ground and the inevitable connected advertisement effect has to be accepted as a side ef-
fect.614
In favor of general admissibility is the fact that hyperlinks relieve the user of the often labo-
rious problem of connecting to the external server by entering the address themselves. Hence
such hyperlinks are seen as a service for the customer and so are often found on the inter-
net.615 But the better arguments say that hyperlinks are not covered by the information duty
that competition law requires. Regularly the reader is informed by the article itself objectively
enough without the need for using links. It is sufficient if the readers can find the WWW-
address of the company in the article. If beyond that they can connect directly to the com-
pany’s server then the borders between information and advertisement become blurred. The
supplier of information is establishing contact with the advertising company – a marketing job
which is normally the advertising company’s duty. At the same time certain companies are
emphasized visually while other companies which do not have their own homepage are dis-
paraged. This speaks in favor of the inadmissibility of hyperlinks in electronic press products
because of an infringement of the separation rule.616


d) Meta-tags

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613
    OLG Köln, 17. October 2000 – 6 U 71/00 (still unpublished)
614
    BGHZ 50, 1 = GRUR 1968, 645 – Pelzversand; BGH, GRUR 1968, 382 – Favorit II; Olg Köln, AfP 1972,
289; OLG Düsseldorf, WRP 1986, 556, 558; OLG Frankfurt, WRP 1985, 37seq.
615
    in favor of links KG, 4. September 2001, MMR 2002, 119.
616
    Further categories will not be addressed here. The use of hyperlinks for cases of comparative advertisement
(§2 UWG) and as part of a lampoon is conceivable.
                                          Thomas Hoeren-Internet Law                                        192
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Very often companies find their WWW-service badly positioned at search engines. If you
cannot be found on the first pages of altavista or yahoo you will not be found at all. This
situation inspired dishonest people to improve their position by abusing the use of meta-tags.
A meta-tag is a piece of information in the HTML-source code. This information is included
in the HTML program that the page is based on as “title” and “description”. This information
is not visible on the screen to the user. The search engines, often automated search robots,
scan the available homepages and read the terms defined in the meta-tags. As a result if these
terms are entered into search engines, among others the tag user’s website is found. For ex-
ample a Ford-technician could use the meta-tag term “Opel” for the HTML-code of the Ford-
website. This would result in referring users of a search engine to the Ford-website even
though they entered the term “Opel”.


The OLG München regarded such behavior as a trade mark infringement.617 A prohibited use
of a trade mark is also the case if somebody uses the infringing term as a meta-tag in the non-
visible part of a homepage. The situation gets more difficult if somebody is entitled to use the
term. An example might be a Miele-retailer who includes the term “Miele” into its website.
The EuGH stated that retailers cannot be prohibited by trade mark law from using the names
of trade mark products (including the logos) for the sale of their products.618 But it is ques-
tionable if this also includes for example the thousand-fold use of the word “Miele” in meta-
tags. Here one could think about applying § 1 UWG where a retailer obtains a position in
search engines through use of a protected term he or she is not entitled to (especially in rela-



617
    OLG München, 6. April 2000, MMR 2000, 546 with annotations by Strittmatter = CR 2000, 461 = WRP
2000, 775; also LG Frankfurt, 3. December 1999, CR 2000, 462; LG Hamburg, 13. September 1999, CR 2000,
121. Similar in the USA Brookfield Communication Inc. v. West Coast Entertainment Corp., 174 F 3d 1036, 9th
Cir. 1999 and in the UK the High Court see the report at http://www.out-law.com/php/page.php3?
page_id=metatagandsearch1022067199.
Other opinion Day, AJP 1998, 1466seq. and Viefhues, MMR 1999, 336, 338, who say that meta-tags do not
serve the individualization of a company or a product.
618
    Judgment of 23. February 1999, JZ 1999, 835 = WRP 1999, 407, 411.
                                         Thomas Hoeren-Internet Law                                   193
tion to the producer).619 However the dividing line between admissible and inadmissible is
fluid.


e) “Kartenfuchs” and others

An internet service which brings people together in order to use reduced group charges of the
Deutsche Bahn does not infringe § 1 UWG. In particular there is neither unfair obstructing
competition nor the adoption of another’s services.620


Banner advertisement in the form of “keyword advertising” infringes due to exploitation of
reputation and diversion of customers621 § 1 UWG.622 This category also contains constella-
tions where somebody buys a connection to a search term with a trade mark owned by a com-
petitor.
If a search engine merely couples a generic term with a banner (e.g. a boiler company when
searching for “heating” and “solar”) this is not a poaching of customers as defined by § 1
UWG.623


The offer to register a .de-address free of charge does not infringe § 1 UWG –including under
the aspect of value advertisement.624



 4XHVWLRQV RI SURFHGXUDO ODZ

A competition lawsuit which concerns the admissibility of an advertising message on the
internet contains a lot of procedural problems. First of all it must be noted that an exact desig-
nation of the incriminated homepage is necessary. Regarding § 253 [2] no. 2 ZPO it is impor-
tant to name the URL of the page exactly; the mere reference to the central entrance page
could be problematic. This is of special importance because homepages are easily and incon-
spicuously changeable at any time, so that an exact determination ex post is impossible.



619
    According to the LG Düsseldorf (judgment of 27.3.2002) the use of html-meta-tags, which do not have an
objective relation to the contents offered on the website, infringes § 1, 3 UWG. Judgment available at
http://www.netlaw.de/urteile/lgd_32.htm
620
    LG Frankfurt, judgment of 17. November 2000, CR 2001, 125 with annotations Leible.
621
    BGH, GRUR 1960, 431.
622
    LG Berlin, court order of 12. January 2001 – 15 O 22/01, K&R, 171 with annotations by Michael. Similar
also LG Hamburg, 16. February 2000, CR 2000, 392.
623
    LG Frankfurt, 13. September 2000 – 2/06 O 248/00, K&R 2001, 173.
624
    KG, 24. November 2000, MMR 2001, 708 with annotations Hoffmann.
                                         Thomas Hoeren-Internet Law                                    194
On the other hand it must be taken into consideration that with claims for injunction, a prohi-
bition on advertisement in foreign countries is traditionally not possible. The jurisdiction of
German courts end at the national borders. This limitation of claims for injunction causes
problems in the internet, because when a certain online-service is prohibited it is made
unavailable globally. Technically it is not possible to design the possible methods of calling
up a website in such way that it is only blocked in one country. So this is an argument in favor
of granting the injured party a claim to prohibit the incriminated homepage in an international
context.




                                   Thomas Hoeren-Internet Law                               195
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On the internet many contracts are concluded on an international basis. Our German Contract
Law cannot simply be applied to these contracts. In fact the applicable contract law will be
determined according to Private International Law.



 81 &RQYHQWLRQ RQ &RQWUDFWV IRU WKH ,QWHUQDWLRQDO 6DOH RI *RRGV

German International Contract Law is provided in the articles 27-37 EGBGB (Introductory
Act to the Civil Code), which are based on the European Contractual Obligations Convention
of 19.6.1980625 and therefore contain an EU-uniform regime of points of contact for contrac-
tual and non-contractual obligations. According to art. 3 [2] EGBGB international agreements
have priority over this autonomous law of conflict of laws where they have become enforce-
able domestic law. In particular the UN Convention on Contracts for the International Sale of
Goods – CISG626 is such an agreement.


625
    European Agreement about the law applicable to contractual obligations (European Agreement on contractual
obligations) from 19.6.1980, BGBl. II 1986, 810, in the form of the 2. Agreement.
626
    UN Agreement on Contracts about the International Sale of Goods of Vienna, BGBl. II 1989, 588.
                                         Thomas Hoeren-Internet Law                                      196
Regarding the subject matter, the CISG will be applicable if goods are sold in a commercial
context. Goods are all movables, article 1 [1] CISG. The convention is applicable at least mu-
tatis mutandis to the sale of standard software, irrespective of the question of whether it is
delivered per data carrier or long-distance data transmission.627 Database contracts are not
covered because most of the time they are not contracts of sale. Besides this objective compe-
tence the territorial field of application has to be opened. Article 1 [1] CISG requires that the
parties to the contract of sale have their place of business in different states, which means that
there has to be a cross-border sale. Additionally, the sale must show a connection to at least
one contracting state. This will be the case if the parties have their registered offices in differ-
ent contracting states (article 1 [1] a CISG) or if the rules of Private International Law lead to
an application of the law of a contracting state (article 1 [1] b CISG). Because of the fact that
all important nations are parties to the contract except Great Britain, the territorial application
will be available for many contracts of sale made on the internet. Article 6 CISG does allow
deviation from the rules of the CISG or rather the determination of a national law as govern-
ing law. However ,where a choice of law in favor of a contract member state has been made,
it generally has to be assumed that the choice of law includes the whole law - and therefore
also the CISG which has become domestic law. If for example the application of German sub-
stantive law is desired then the choice of law has to take place with the clear exclusion of the
UN Convention on Contracts for the International Sale of Goods.



 0DLQ IHDWXUHV RI WKH (*%*%

If the UN law on sales is not pertinent, the governing law will follow articles 27, 28 EGBGB.
Because of the priority of consumer contracts expressed in article 29 EGBGB, in terms of
practical application primarily those internet transactions are included in which freelancers or
business people participate on both sides. According to article 27 EGBGB a contract like this
will as a matter of priority be subject to the law chosen by the parties. Even general terms and
conditions of trade can contain a choice of law clause.628 Moreover an implied choice of law
can be taken into consideration. In particular the agreement of a jurisdictional venue or an




627
    See Diederich, Autonome Auslegung von Internationalem Einheitsrecht, Baden-Baden 1994, 174; the same
author, RIW 1993, 441, 452; Endler/Daub, CR 1993, 601, pp. 603; Hoeren, CR 1988, 916; Mankowski, CR
1999, 581, 586. Different opinion Piltz, NJW 1994, 1101.
628
    Waldenberger, BB 1996, 2365, 2370 with further references.
                                          Thomas Hoeren-Internet Law                                 197
arbitration tribunal is supposed to be a (refutable) indication of a choice of the substantive law
which is effective at the location of the court.629
If the parties have not made a choice of law, according to article 28 [1] EGBGB the law of
that state will be applicable with which the contract has the closest connection (so-called ob-
jective point of contact). Whose performance most characterizes the legal and economic na-
ture of the contract will be decisive. According to article 28 [2] EGBGB it is assumed that the
contract has the closest connection to that state in which the party who produces the character-
istic results has its usual presence or its administrative headquarters. However this assumption
will not be applicable if the characteristic performances cannot be determined or if the con-
tract points to a closer connection with another state (article 28 [2] and [5] EGBGB).
A two-stage verification has to be carried out: first it must be questioned whether a character-
istic performance can be determined, then the relevant point of contact (usual location, place
of administrative headquarters) has to be determined. The determination of characteristic per-
formances has no internet-specific features.630 For contracts of sale usually the seller produces
the characteristic performance; therefore its registered office determines the applicable law. If
the object of the performance is “information”, the provider of the information produces the
performance that is characteristic for the contract.631 With the download of software the char-
acteristic performance is providing the software, so the law that is effective at the software
provider’s principle place of business is decisive for the executory transaction agreement,632
even where a foreign provider uses a German server.633 With regard to license agreements (for
example on the assignment of rights in software) according to the prevailing opinion the place
of business of the licensee should be decisive if it has certain execution or exploitation du-
ties.634 Following this concept the licensee is the one who is responsible for the distribution of
and trade with copies of value; in this respect it produces the performances that are character-
istic for the contract. An exception will only be made if the act of the licensee is just paying a
charge; then the right holder’s place of residence will be decisive.
Locating the provider focuses in part on the real circumstances, like the provider’s usual place
of presence or place of business. If there is no business establishment or if the provider is only
present on the internet then for business people too the usual place of presence will be deci-



629
    BGH, JZ 1969, 261; WM 1969, 1140, 1141; OLG Hamburg, VersR 1982, 236.
630
    Mankowski, RabelsZ (63) 1999, 203, pp. 220.
631
    Mankowski, RabelsZ (63) 1999, 203, pp. 220.
632
    Busse, CR 1996, 389, 392.
633
    Pfeiffer, NJW 1997, 1207, 1214.
634
    BGH, GRUR 1960, 447, 448 – Comics; OLG Hamburg, UFITA 26 (1958) 344, 350.
                                        Thomas Hoeren-Internet Law                            198
sive.635In part, the utilization of a server at a different location from the place of busi-
ness/residence is supposed to justify an establishment in the sense of article 28 [2] EGBGB.
But a server only performs an ancillary function. It can be replaced at any time, so the durabil-
ity which is required for an establishment is lacking.636



 6SHFLDO SRLQWV RI FRQWDFW

According to articles 27, 28 EGBGB the determination of the governing law is restricted by
the special reservation of article 34 EGBGB in favor of the compelling German law. This
reservation is especially important for the application of the German and European cartel law
and external economic relations law, the regulations of the Product Piracy Act as well as the
Data Protection Act and the Taxation Act. “Compelling law” within the meaning of article 34
EGBGB is not the same as “compelling law” in the sense of non-optional law, in this respect
higher requirements are set.637 Furthermore, according to article 6 EGBGB (“ordre public”) a
correction of the chosen law has to be made if the application leads to a result which is in-
compatible with the substantive principles of German Law. But in this context too high stan-
dards have to be applied, the application of the ordre public can only be the ultima ratio.



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Special points of contact can be found in international insurance law. The usually relevant
regulations of articles 27-37 EGBGB concerning the German law of conflict of laws are not
applicable according to article 37 no. 4 EGBGB (there is only an exception for reinsurance).
Instead the focus is on the risk situs. Where there is an insurance contract which covers a risk
within EEC/EEA the applicable law will be determined according to articles 7-15 EGVVG
("Einführungsgesetz zum Versicherungsvertragsgesetz" = Introductory Act to the Insurance
Contract Act). But if the insured risk is situated outside the European economic area, then Art.

635
    Ernst, JuS 1997, 776, 777; Martiny, ZeuP 1999, 246, 259.
636
    Hoeren, Rechtsfragen des Internet, Rdnr. 279; Mankowski, RabelsZ (63) 1999, 203, 226-230; Junker, RIW
1999, 809, 818.
637
    BGHZ 135, 124, 135 seq.
                                          Thomas Hoeren-Internet Law                                   199
27-34 EGBGB will be applicable. Pursuant to art. 7 [2] no. 4 EGVVG the usual place of resi-
dence of the policy holder is important for the risk situs. If the risk situs and the usual place of
residence and/or the place of business of the policy holder are in the same EEA-state the focus
will generally be on the law of that state pursuant to article 8 EGVVG. The possibility of
choosing the law in these cases of convergence will only exist within three exceptions for:


   • great risks (here an unrestricted choice of law exists pursuant to article 10 [1] EGVVG),
   • damages abroad (article 9 [3] EGVVG) and
   • correspondence insurances (choice of law possible according to article 9 [4] EGVVG).


In the latter case the question arises if the conclusion of contracts via the internet can be seen
as a correspondence insurance. In this case a choice of law to the disadvantage of the policy-
holder would also be possible. The requirement would be that the person who wants to be
insured must contract with the foreign insurance company directly and not via an intermedi-
ary such as a broker or an agent. Normally this done by post, by telephone or by travelling
abroad.



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In principle contracts can be made via internet just like in normal business. In doing so one
has to bear in mind that regularly a website is only an “invitatio ad offerendum”(invitation to
make an offer).638 The customer makes the offer; the content provider decides at his or her
absolute discretion whether to accept the offer. Even automatically generated declarations are
expressions of will within the meaning of the BGB (German Civil Code).639


Substantial changes in the national laws can be expected from the E-commerce Directive. It
came into force as Directive 2000/31/EG of 8 June 2000.640 According to the first draft of the
EU-Commission, which only covered the (exceptional) case of a binding offer by a service
provider, the contract was concluded by offer, acceptance, confirmation of acceptance and
confirmation of the confirmation (!).641 This complicated and much criticized                  642
                                                                                                     provision
has been dropped. Nevertheless even the new "principles" about order placement cannot be
easily placed within traditional legal transaction doctrine. Art. 11 assumes an order by the
user and covers therefore (at least also) the typical case of a service provider offering only an


638
    See also OLG Oldenburg, CR 1993, 558; Eckert, DB 1994, 717, 718; Wagner, WM 1995, 1129; Ernst,
NJW-CoR 1997, 165; Ph. Koehler, MMR 1998, 289, 290; H. Köhler, NJW 1998, 185, 187; Waldenberger, BB
1996, 2365. A bit different Mehrings, MMR 1998, 30, 32, who assumes a binding offer in some cases.
639
    Köhler, AcP 182 (1982), 126, 132; Mehrings, in: Hoeren/Sieber (ed.), Handbuch Multimediarecht, 13.1 mar-
ginal note 23 with further references. Different opinion in the past Susat/Stolzenburg, MDR 1957, 146; Clemens,
NJW 1985, 1998, pp. 2001.
640
    Retrievable under http://europa.eu.int/comm/internal_market/en/media/eleccomm/index.htm.
641
    See regarding German Law Hohenegg/Tausch, BB 1997, 1541; Mehrings, MMR 1998, 39; Mehrings, BB
1998, 2373; Koehler, MMR 1998, 289.
642
    See for this Tettenborn, K&R 199, 257, 258; Hoeren, MMR 1999, 192, 198 f; Spindler, ZUM 1999, 775, 788
seq; Landfermann, ZUM 1999, 795, 800.
                                            Thomas Hoeren-Internet Law                                     201
"invitatio ad offerendum". The receipt of the order has to be confirmed according to the Di-
rective. Is this meant to form the constitutive criteria of contractual conclusion? Is a confirma-
tion even necessary if the binding offer (as an exception) comes from the provider? Is the pro-
vider upon receiving a user’s offer even obliged to accept it? Probably not - but should he or
she have to communicate this intention to decline the offer? If so, what consequences does his
or her silence have? In relation to consumers, that is to those natural persons acting for private
purposes, national regulations may not permit provisions differing from the principle of
obligatory confirmation. The obligation to confirm the offer does not apply to contracts which
are concluded by exchanging electronic mail or other comparable means of individual
communication.


According to Art. 6 [1] of the Directive on the Protection of Consumers in Distance Contracts
the consumer can withdraw from the contract within seven working days or three months if
information about the right of withdrawal is absent (to be set out later on).


Exceptional features have to be considered in the field of insurance business. There are two
types of contractual conclusion: The offer-model and the policy model. Both procedures exist
in legal juxtaposition. Therefore it incorrect to consider the policy model as merely an emer-
gency model.643
Following the offer-model the contract is concluded when the client submits a binding offer to
conclude an insurance contract and the insurer declares acceptance usually by sending the
client the insurance policy. When submitting the offer, the policy holder has handed out the
necessary consumer information in written form according to § 10 a VAG ("Versicherung-
saufsichtsgesetz" = Insurance Authority Act). If the offer has been submitted in written form,
the policy holder has the right to withdraw in written form provided that the conditions of § 8
[4] VVG ("Versicherungsvertragsgesetz" = Insurance Contract Act) are fulfilled. A fourteen
day period for withdrawal begins only when the insurer has informed the policy holder about
the right to withdraw and the policy holder has confirmed the information with his or her sig-
nature. In the case of an oral offer it is disputed whether the policy holder can withdraw ac-
cording to § 8 [4] VVG.644




643
   Schirmer, VersR 1996, S. 1046.
644
   Negative: Prölss/ Martin, § 8, no. 42; Römer/ Langheid, § 8, no. 46; Stiefel/ Hofmann, § 1 AKB, no. 30e; in
favor of it: Koch, VersR 1991, 725, 727).
                                          Thomas Hoeren-Internet Law                                      202
Within the policy model contractual conclusion works as follows: The policy holder and the
insurer agree on the insurance contract. At this point the policy holder has not received any or
hardly any consumer information (including the insurance conditions) according to § 10 a
VAG. For this reason, § 5 a [2] VVG gives the policy holder the right to withdraw in written
form within fourteen days after receiving the documents. The withdrawal period only starts
running when all documents are handed over, including the certificate of insurance, and under
the condition that the policy holder has been informed about his or her withdrawal rights and
the beginning and length of the withdrawal period in a written form which was printed legi-
bly. Otherwise, the right to withdraw only expires one year after paying the first premium.
The insurance contract is then binding on the basis of the insurance policy, the general busi-
ness conditions and the consumer information which lays down the content of the contract, if
the policy holder does not withdraw within fourteen days after receiving the documents. The
wording leads to the conclusion that the insurance contract is provisionally invalid until the
expiry of the withdrawal period.645



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There are some difficulties concerning the interpretation of expressions of will (acts) within
the scope of online auctions.646 The Landgericht (Regional Court) Münster had to decide a
lawsuit of a participant in an auction who had successfully bid for a new car – far below the
list price.647 The general conditions of trade of the – merely mediating - organizer provided
that the seller agrees to accept the highest bid received before expiry of the time limit at the
moment the website is opened for bidding. The Landgericht did not have any reservations
about the possibility of an anticipated acceptance. But it was of the opinion that the technical
details of the auction (the time for bidding could not be extended and the steps for making a
bid were strictly determined) were incompatible with the requirements of fair business and
considered the “auction” to be a game of chance. Under these circumstances one could not
assume that the “offering” participant really meant to accept every highest offer.648 This
would not be changed by the opportunity to enter a minimum price.



645
    Honsell, Berliner Kommentar zum VVG-Schintowski, § 5 a, Rn. 78; Römer/ Langheid-Römer, § 5 a, Rn. 25,
35; Prölss/ Martin-Prölss, $ 5 a, Rn. 10; Schirmer, VersR 1996, S.1045, 1052.
646
    See Sester, CR 2001, 98.
647
    LG Münster, decision of 21 January 2000, MMR 2000, 280 with annotations by Wiebe; similar AG Neu-
markt i.d.Opf., decision of 26 September 2000, CR 2000, 852 with annotations by Tröber. See also Gaul, WM
2000, 1783; Ulrici, JuS 2000, 947.
648
    Different AG Sinsheim 4 C 257/99, headnote in MMR 2000, 181.
                                           Thomas Hoeren-Internet Law                                  203
This judgment was reversed by the Oberlandesgericht (Higher Regional Court) Hamm.649 It
based its decision on the assumption that there was already a binding offer in opening the web
page for bids. This followed from the acts of the parties as stated in the auction site’s general
terms of trade. However, the buyer was not regarded as a user of these general terms of trade
so an infringement of §§ 308, 309 BGB could not be affirmed. The BGH (Federal Supreme
Court) confirmed this opinion.650 The judgement in Hamm has been confirmed by the Su-
preme Court. According to the judgement, at an internet auction a contract is concluded when
the highest bis is made, if the auctioneer expresses the appropiate intention when connecting
the offer-website. At this point the auctioneer has already accepted the highest legally valid
offer. The provider of the website acts as a representative for the auctioneer as well as for the
bidder. A decisive point for the BGH was that the defendant auctioneer made an express dec-
laration to ricardo.de before the offer was made available, with the following wording: “at this
point I already declare the acceptance of the highest legally valid offer.” The BGH regarded
itself as not permitted to examine the general business terms of trade of ricardo.de, as they
could not have influenced the content of the contract between the auctioneer and the bidder.


According to the AG (Local Court) Kerpen there is no legally binding offer in online auc-
tions, when the vendor explicitly requests in the product description not to bid (“no bidding
here”), but instead mentions a price as a basis for bargaining.651 The Federal Supreme Court
had no concerns based on the law of general business terms, about the use of the following
terms: “With the expiry of the time which was fixed by the vendor a contract between the
vendor and the highest bidder is concluded.”652



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Customers can avoid their offer according to §§ 119, 120 BGB if their declaration of intent
has been wrongly transmitted by the provider.653 Customers who erroneously give wrong

649
    Decision of 14 December 2000, CR 2001, 117 with annotation by Ernst = MMR 2001, 105; similar AG Wies-
baden, decision of 6 September 2000, CR 2001, 52.
650
    Judgment of 7th November 2001, BB 2001, 2600 = K&R 2002, 85 with annotation by Leible/Sosnitza.
651
    Judgement of 25th May 2001, MMR 2001, 711.
652
    Judgement of 15th August 2001, BB 2002, 168 = K&R 2002, 147.
653
    See Heun, CR 1994, 595, 596; Waldenberger, BB 1996, 2365, 2366.
                                        Thomas Hoeren-Internet Law                                   204
details when composing their e-mails will be able to avoid their declaration according to §§
119 [1]. Alt. 2 BGB.654 But avoidance will not be possible with computer-generated declara-
tions that contain mistakes which stem from incorrect data material entered previously.655 All
in all, avoidance will not be possible where incorrect data material has been used because this
is only a mistake in the inducement, which is not significant.656 For errors in transmission an
avoidance analogous to § 120 BGB should be considered.


If a stranger uses the user’s I.D. code a binding to the electronic order comes into considera-
tion according to the rules about acting on behalf of another.657 The business partner wants to
make a deal with the owner of the name; therefore, the contract only obligates the owner of
the name pursuant to § 177 [1] BGB:
      • if there is an authorization,
      • according to the rules of the power of representation by estoppel,
      • according to the rules of apparent authority (in dispute).658


The rules of apparent authority are also effective if a minor enters into a legal transaction via
the internet with the I.D. code of his or her legal representative; in this case the legal represen-
tative would be bound by the contract.


Furthermore, the question arises at which point in time a contract via internet is concluded.
The German law distinguishes between declarations of intent between persons present and
absent persons. Concerning the conclusion of a contract between persons present, a expres-
sion of will reaches somebody at the moment of acoustically accurate perception (so-called
theory of perception). Concerning a expression of will between absent persons, the decisive
point in time is the moment when the declaration reaches the sphere of influence of the re-
ceiver in such a way that he or she will be able to obtain knowledge of the declaration, or in
which knowledge can be expected.659 Computers communicating online (for example in the
EDI area) are in part assumed to be declarations between persons present.660 This may be ac-


654
    OLG Hamm, CR 1993, 688; see also BGH, DB 1984, 2399.
655
    AG Frankfurt, CR 1990, 469=NJW-RR 1990, 116; in the result also LG Frankfurt, NJW-RR 1988, 1331; LG
Frankfurt, CR 1997, 738.
656
    LG Frankfurt, CR 1997, 738.
657
    See Borsum/Hoffmeister, NJW 1985, 1205.
658
    OLG Oldenburg, CR 1993, 558.
659
    So-called theory of knowledge or receipt; see MünchKomm/Förschler, 3. Edition, § 130 marginal note 3.
660
    Like this Brinkmann, BB 1981, 1183, 1185; Fritzsche/Malzer, DNotZ 1995, 3, 9; Herget/Reimer, DStR 1996,
1288, 1291; Taupitz/Kritter, JuS 1999, 839, 841.
                                          Thomas Hoeren-Internet Law                                      205
ceptable in the EDI area. But in the WWW-sector the contrary opinion is more convincing,
according to which the conclusion of the contract occurs by way of declarations by absent
persons, particularly because § 147 [1], s. 2 BGB requires a declaration directly from one per-
son to another.661
For the receipt of declarations of intent via e-mail therefore the point in time when retrieval of
the mail by the receiver is to be expected is decisive. In this respect business and private re-
cipients must be distinguished.662 People in business can be expected to regularly check their
electronic mailboxes. E-mails that are retrievable during business hours are considered to be
received at that point in time. E-mails sent out of business hours are usually noticed when
opening for business the next day. Private persons can be expected to check their incoming
mail at least once a day. In the absence of usual times of retrieval, emails are considered to be
received on the day after they first become retrievable.
If orders are accepted automatically, passing through the interface of the online-company will
be sufficient, so that the right of protest in § 130 [1], s. 2 BGB will be meaningless in a prac-
tical sense.663


The opening up of e-mail access is dangerous because of the connected liability risks. If a
lawyer for example makes his e-mail identification public to his clients the impression could
arise that legally relevant transactions with the lawyer can be made by e-mail. If a client there-
fore requests his lawyer by e-mail to file an appeal and the lawyer does not read the e-mail, an
action for damages against the lawyer will threaten. Publishing the e-mail address on station-
ery and business cards indicates a willingness to accept orders by e-mail. The provider then
has to react immediately during normal business hours. If he does not want to, he will have to
point that out to his clients. Clear statements are advisable (“The e-mail address only serves to
transmit desired information and not for placing e-mail orders.”). Providers who want to ac-
cept or settle orders by e-mail should have a special e-mail address for this and should check
the account regularly, where necessary several times a day.


The provider bears the risk of forgery; an attempt to shift this risk onto the client by the gen-
eral terms of trade is void. It is worthwhile to agree upon security standards with the client


661
    Also with a result like this Graf Fringuelli/Wallhäuser, CR 1999, 93, 98; for the EDI area Bartl, DB 1982,
1097, 1100; Fritzemeyer/Heun, CR 1992, 130; Hellner, Festschrift Werner 1984, 251, 266; Heun, CR 1994, 595,
597; Klier, WRP 1983, 534, pp. 535; Redeker, NJW 1984, 2390, 2391.
662
    Ernst, NJW-CoR 1997, 165, 166; Graf Fringuelli/Wallhäuser, CR 1999, 93, pp. 98; in detail Taupitz/Kritter,
JuS 1999, 839, pp. 841.
663
    Like this also Heun, CR 1994, 595, 597.
                                          Thomas Hoeren-Internet Law                                      206
(e.g. by passwords). The provider should also point out to the client the risk of forgery, for
example like this:
“The client wishes his orders to be accepted and dealt with by e-mail. The client has been
explicitly informed by the provider that abuses cannot be excluded where e-mail transmission
is concerned. The provider is not able to check e-mail orders to see whether the sender and the
content are correct. Notwithstanding the client asks the provider to accept these electronic
orders. The provider is completely discharged from liability that may result from a misuse of
the transmission system. The parties agree upon the following preventive measures.”



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However the Directive on Electronic Commerce raises special problems. Art. 11 [2] provides
a special regulation concerning the correction of input errors. Typically input errors fall
within the risk area of the users, who can avoid their expressions of will because of such mis-
takes, but will then have to pay for the damage caused by breach of trust. In this case the Di-
rective provides an additional filter. According to Art. 11 [2] providers have to make available
means for the correction of input errors; pursuant to Art. 10 they also have to inform the users
of this. Today standard practice already includes confirmation fields which show clients the
text of their declaration after they have placed their electronic order to give them the opportu-
nity to correct mistakes. In this respect this measure is technically easy to arrange. However,
the provider‘s duty to establish correction aides needs to be embodied in German law; then it
will also need be determined what consequences a breach of this duty will have for the pro-
vider.
Deviating from the BGB concept of receipt, declarations pursuant to Art. 11 [1] of the Direc-
tive are considered to be “received” if they can be retrieved by the receiver. It does not matter
whether the receiver can be expected to immediately take notice.



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                                   Thomas Hoeren-Internet Law                                207
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Compliance with a special written form is provided for in numerous places in the German
Civil Law. Digitally signed documents and declarations by their very nature do not meet the
requirements of the written form according the current legal situation.664 This is because pur-
suant to § 126 BGB the text must be signed personally with a handwritten signature by the
writer or by a notarially certified sign where the written form is legally required. The re-
quirement of written form is provided for example in consumer loan agreements (§ 492 [1], s.
1 and 2 BGB), for contracts of sale of land (311b BGB), for written receipts (§ 368 BGB), for
guarantor declarations (§ 766 BGB) and for wills (§ 2231 no. 1, 2231 no. 2, 2247 [1] BGB).



 'LUHFWLYH RQ (&RPPHUFH (OHFWURQLF 6LJQDWXUH 'LUHFWLYH DQG ZULWWHQ
IRUP

The subject has also been taken up at a European level because the existing national and in-
ternational regulations do not offer a satisfactory solution to the problems arising in the course
of electronic business. In particular, the valid conclusion of contracts on the internet should
not fail because of form requirements set by national law.
At the end of 1999 the Electronic Signature Directive665 became effective. Its aim is to ensure
the international legal acceptance of electronic signatures and to create an appropriate and
harmonized legal environment.
According to Art. 5 of the Directive electronic signatures should have the same legal effect as
handwritten signatures and should also be admitted as evidence in court.
To meet the requirements in comparison with personal signatures the signature must refer to a
certificate created by a secure-signature-creation device, Art. 5 [1]. This is an electronic
statement that assigns a signature examination to a person that can verify the identity of that
person and corresponds with the requirements of appendix I of the Directive. The appendix


664
   Fundamentally BGHZ 121, 224.
665
   Directive 1999/93/EG of the European Parliament and the Council of 13 December 1999 on common general
requirements for electronic signatures.
                                        Thomas Hoeren-Internet Law                                  208
contains the requirements which have to be met by these qualified certificates. However, the
legal effectiveness of an electronic signature must not be rejected according to Art. 5 [2] only
because of the fact that it is made in an electronic form and is not based on a qualified certifi-
cate i.e. on a qualified certificate made by an accredited certification service provider.


Besides the EU Electronic Signature Directive, the Directive on E-Commerce666 has to be
taken into account. In the previous explanation it was said that “the member states have to
bring about a certain condition and have to examine their internal legal regulations systemati-
cally to see whether they would hinder or restrict the application of electronic contracts, or
make them uninteresting.” In Art. 9 of the Directive a detailed regulation concerning the ques-
tion of the written form can be found. According to Art. 9 [1] the conclusion of electronic
contracts must be made possible. The very fact that a contract has been made electronically
should not lead to the invalidity of the contract. With the content of Art. 9 [1] the complicated
discussion between Germany and the rest of the European Union concerning the question of
the legal requirements of digital documents might be settled.667 According to this every elec-
tronic text would meet the requirements of the electronic form, independent of the way it was
made.
Art. 9 [2] intervenes in the catalogue of exceptions which excludes notary contracts, contracts
with a duty to register as well as agreements in family law and the law of succession in a cor-
rective fashion.668 This provision is surprising in so far as the “spirit of the Internal Market” is
reflected in the draft of the Directive, but now thoughts of reforming the Civil Law are emerg-
ing. Family law and the law of succession have nothing to do with the internal market. Any-
way, agreements in this field are usually not made on the internet or through other online-
providers. According to Art. 9 [3] of the Directive the respective member states of the Com-
mission should present a complete list of further exceptional cases, as they are provided for by
[2].


Even if the problem of the written form has not been completely solved by the EU-Signature
Directive and the Directive on E-Commerce and if permanent improvements need to be made


666
    Changed draft law for a Directive of the European Parliament and the Council concerning legal aspects of
electronic commerce within the Internal Market of 17 August 1999 – COM (1999) 427 final.
667
    See in general on the signature discussion, Bergmann/Streitz, jur-pc 1996, 37; Kuner, NJW-CoR 1996, 108;
Malzer, DnotZ 1998, 96; Mertens, CR 1996, 769; Roßnagel, MMR 1998, 75.
668
    According to the initial draft of 18 November 1998 the list of exceptions should have been capable of being
changed unilaterally – extended or shortened – by the Commission. In the amended draft of 17 August 1999 and
in the passed Directive this regulation has been eliminated.
                                           Thomas Hoeren-Internet Law                                       209
with regard to the constant progression in technical development, they might still encourage
national legislators to begin intensive legislative activities with a view to the organization and
concrete wording of formal requirements, if this has not already happened.



 1HZ UHJXODWLRQV UHJDUGLQJ IRUP

The early drafts of the IuKDG (Informations- und Kommunikationsdienstegesetz) attempted
to master this problem through the introduction of a “test norm”. They provided for a single
unimportant in practice provision of written form, namely concerning distance teaching con-
tracts within the framework of the "Fernunterrichtsschutzgesetz" (distance teaching protection
act) with a special electronic form. However the experiment was abandoned and the question
of the written form was left open.


In May 1999 the Federal Ministry of Justice took on this issue, also prodded into action by the
E-Commerce Directive mentioned above.669 The Ministry presented a draft law concerning
the adaptation of the formal legal requirements of Private Law to the modern course of busi-
ness.670 On 20th June 2001 the mediation committee passed a resolution recommendation
which has been accepted by the “Bundestag” (Lower House of German Parliament).671 This
law became effective on 1st August 2001.672


Besides the notarial recording the law also provides for the “electronic form” (§ 126 [3] BGB)
as a substitute for the required written form. The requirements of the electronic form are pro-
vided in § 126 a BGB. Here, the nature of the SigG (Signature Act) as a reference law be-
comes apparent because the observance of the electronic form makes a digital signature under
the SigG necessary. Two refutable presumption rules from the first draft of 1999 have been
eliminated, firstly the attribution of a an expression of will to the owner of the signature key
(§ 126 a [3] BGB unamended version) and secondly, a special reflection of a presumed appar-
ent authority or authority by estoppel (§ 126 a [3], s. 2 BGB unamended version).673 Written
form remains for particular situations, e.g.



669
    See also the Japanese Omnibus Act for the Use of Information and Communications Technology relating to
the Delivery of Papers, Act. No. 126 of 2000, effective on 1 April 2001.
670
    Draft law concerning the adaption of the formal legal requirements of Private Law to the modern course of
business of 19 May 1999 – BMJ I B 1 – 3414/2.
671
    Bundesrats Drucksache 497/01. See the draft under http://www.bmj.bund.de/ggv/ggv_i.htm/bgbrege1.pdf.
672
    Gesetz zur Anpassung der Formvorschriften im Privatrecht from 13 July 2001, BGBl. 2001 I Nr. 35, p. 1542.
                                        Thomas Hoeren-Internet Law                                       210
       • § 623 BGB (termination of employment contract)
       • § 630, § 73 HGB (certificate of employment)
       • § 766 s. 2 BGB (suretyship)
       • §§ 780, 781 BGB (acknowledgement of indebtedness, recognition of liability)


With the “text form” as a new “marketable” form an eased674 form requirement has been pro-
vided for by § 126 b BGB compared with the formal written form, which makes concessions
towards the needs of modern legal relations. Initially the text form requirements were to be
fulfilled if the text is readable in letters, the declaring person recognizable and the end of the
declaration can be determined. But the Federal Council ("Bundesrat") protested and pointed
out that this wording was too broad and § 126 b should be deleted without replacement.675
This protest was problematic since the law reforming the law of tenancy which passed the
Federal Council the same day included references to the text form. The provision was edited
in a hurry and passed the mediation committee in June 2001.676 According to the § 126 b
BGB in force now, the requirements of the text form are met if the statement


       • is given within a document or another manner suitable to permanent reproduction in let-
           ters
       • the person making the statement is named and
       • the end of the declaration is indicated by an image of the signature or other means.


The personal signature can then be dispensed with. Problematic is the reference to durable
reproduction and the parallels to the personal signature. The text form is meant for cases
which until now have required a strict written form, but where the requirement of a handwrit-
ten form is unsuitable and an impediment to transactions. Typical applications concern mass
proceedings, mostly with repetitive declarations of no significant evidential weight. This in-
cludes a computer-fax from one personal computer to another. Such cases identified in the
law are for example §§ 355 [1], 356 [1] No. 3, 410 [2], 416 [2], 556b [2] No. 1 and 651g [2] s.
3 BGB.




673
      Conclusion, identity, authentication, warning and probative function.
674
675
      BT-Drs. 14/6044 of 15 May 2001.
676
      BT-Drs. 14/6353 of 20 June 2001.
                                            Thomas Hoeren-Internet Law                          211
The new regulation in the ZPO (Civil Procedural Code) is different. With the Zustellungsre-
formgesetz677 (Service of Process Reformation Code) service in civil matters can take place
with a fax or an electronic document (§ 174 [2] and [3] ZPO amended version). Which form
requirements have to be fulfilled by the electronic document is not stated in the Act. How-
ever, a qualified form is essential to ensure the unaltered delivery of the content of the mes-
sage. The electronic document is understood to be delivered when the addressee confirms that
he or she received it and accepted it at a specific time. The declaration of receipt can also be
delivered electronically, where codification or a signature is not necessary. As for the delivery
of that declaration the ZPO will have to be changed once again in order to enable an elec-
tronic form of return delivery.



 6SHFLILF FKDUDFWHULVWLFV RI LQVXUDQFH ODZ †  D 9$*

The insurance business involves some specific characteristics. The application model, where
the future policyholder files an application for the conclusion of an insurance contract with
full knowledge of the consumer information pursuant to § 10 a VAG, is seen by the prevailing
opinion as not very useful for making direct and “clear” legal transactions on the internet,
given the legal situation up until now. The reason for this is the requirement to inform the
client in writing according to § 10 a [2] VAG. Until now this was understood as information
on paper. Moreover, the imperative of a “handing over” of advance information is extracted
from § 10 a VAG and § 5 a VVG. A website on the internet is assumed not to fulfill these
requirements.678 The written form is supposed to require a physical handing over to the policy
holder; for reasons of consumer protection a deviation from the wording of § 10 a VAG is
said to be impossible.


But the restrictions could be dispensed with if one assumed –with regard to technical devel-
opments and the aim of § 10 a VAG – that the aim of the consumer protection can be met by
any “written version” of the necessary information. Accordingly, “written” would not be
equated with “on paper”, so the classical written form of § 126 BGB is not necessarily meant
by this.




677
    Statute to reform the procedure in court deliveries of 25 June 2001, BGBl.I 1206, in force since 1st July 2002,
See also Viefhues/Scherf, MMR 2001, 596 and Viefhues, CR 2001, 556.
678
    Like this for example Hoppmann/Moos NZVersR 1999, 199/200.
                                           Thomas Hoeren-Internet Law                                           212
There are several legal aspects backing up this idea. And this opinion is held by some.679 But
in the end the necessity of “paper” to meet the requirements of § 10 a [2] VAG is also de-
manded by the opinion maintained here. Therefore, an internet-insurer would be advised not
to use this sort of argument.
Concerning the interpretation of the word “written” the internet-favorable opinion could be
supported by saying that:
       • by this only the differentiation between written and oral declarations is meant,
       • the written form does not necessarily mean “printed on paper” but can also mean “in an
           electronic text form”,
       • and therefore an availability of the information on a durable medium meets the require-
           ments (corresponding to § 361 a BGB).680


The equation of the requirement of the written form with the embodiment of the text on paper
results from the regulation of § 126 BGB. However § 126 BGB is a regulation that belongs to
the field of Civil Law. In contrast to this § 10 a VAG is part of Public Law. But that does not
mean that § 126 BGB has to be disregarded when judging this problem. After all § 10 a VAG
is so to speak transferred into Private Law by the reference in § 5 a VVG.681 Besides, the in-
terpretation of the written form has to be made in the same way in Private Law and Public
Law because the legal origin is the same. But the fact that the written form in § 10 a VAG is
not to be understood as strictly as in § 126 BGB can after all be deduced from the circum-
stance that the prevailing opinion within the insurance industry assumes that the consumer
information need not be signed. But in the end you cannot come to the reverse conclusion that
you can interpret the “paper-obligation” as widely as this. It is only an indication which is still
relevant to assessments made after the amendments to the form regulations.
A strict interpretation of the wording, orientated according to the requirements of § 126 BGB
seems to be a reason against renouncement of the “paper form”. So far an embodiment has
been required particularly as § 5 a [1] VVG speaks of a handing-over of information. Even on
paper after printing, only a derivative of the electronically saved consumer information can be
presented. Therefore, it could be doubtful if a print-out can fulfil the requirement of the writ-
ten form. Also changes in the saved data cannot be excluded when using current procedures.
Starting out from the meaning and purpose of the requirement of the written form, it is first of
all to protect the consumer, who is meant to become more familiar with the invisible product

679
      Schimikowski, r + s 1999, 489.
680
      Considerations like these in Schimikowski, r + s 1999, p. 485, 489; Leverenz, p. 91, 92.

                                            Thomas Hoeren-Internet Law                           213
“insurance” before signing a contract. Therefore, the handwritten signature of the insurer
technically required by § 126 BGB is not required here. By giving the consumer information,
not so much an evidential function but more so an informational function should be fulfilled.
But an embodiment on paper as least has so far seemed to be still necessary according to the
law. Unlike the rights of the policy holder concerning protest and withdrawal, deviation from
the legal requirements is not possible. An e-mail with the corresponding information or a
download of the consumer information is not sufficient even though these possibilities are just
as useful for the consumer to become familiar with the insurance product and to be able to
compare it with others. In part the electronic forms even offer better possibilities, for example
regarding special search applications within the information material or automatic links. In
addition, through storage the protection-worthy interests of the policy holder in an informa-
tion form with a certain probative value will be safeguarded. According to § 361 a BGB (una-
manded version) it is sufficient for the probative value if the client had the opportunity to save
the explanation by the business representative so that it cannot be manipulated by the insurer,
which the fixation on a durable medium is supposed to protect against.682 With the reform of
the law of obligation the term "durable medium" has been replaced by the text form (§ 312c
[2] BGB), which refers to the permanent reproduction of letters (§ 126 b BGB). Therefore the
meaning and purpose of the consumer information according to § 10 a VAG does not go
against the application of electronic media, it is just a strict interpretation of the wording.
Conversely this means that with a wide interpretation of the wording without a binding to the
regulation of § 126 BGB paper-free information for the consumer could be possible.
But historical and systematic aspects work against a renunciation of a strict interpretation.
When creating this regulation the legislature had fundamentally the regulation of the “written
form” of § 126 BGB in view, even if one tried to differentiate between regulations in Civil
Law and Public Law. Of course one could consider an adjustment of the legal requirements
by a wide interpretation of the wording regarding technological progress, but in the end this
would be false. That can be seen from the fact that the legislator partially adjusted formal re-
quirements to read “the state-of-the-art”, like for example § 361 a BGB, and is planning the
same for further regulations. To anticipate this reform by a wide interpretation is not forbid-
den but goes against the method of the adjustment of the formal regulations. According to the
draft for the adjustment of the formal regulations a simple e-mail is technically under a prohi-
bition with a permission reservation, which means that it must be possible to infer the text


681
      Leverenz, Rechtliche Aspekte zum Versicherungsgeschäft im Internet, Karlsruhe 2001, p. 93.
682
      Wieser, VR 2000, 164.
                                         Thomas Hoeren-Internet Law                                214
form from of the law. If you consider this as already possible through an interpretation of the
law, you would be one step further than intended by the reform. It also does not count against
it that according to some regulations an e-mail is considered sufficient to fulfill the require-
ment of the “written form”, because this only concerns regulations which refer to a
consumer’s declaration, which means the so-called weaker part of the contract.



 )RUP DQG PRQH\ ODXQGHULQJ

With respect to the opening of a bank account the credit institute is obliged to demand the
presentation of an identity card or passport and to note the name, date of birth, address and the
issuing identity authority (§ 1 [5] Geldwäschegesetz = Money Laundering Act; similar § 154
[1] AO = Fiscal Code). This formal requirement can be fulfilled by the application of the
PostIdent-proceedings that have been established by the Deutsche Post AG. In performing
this legitimacy check, the credit institute can make use of the Deutsche Post AG, which by
way of postal delivery carries out an identification of the clients, who have to identify them-
selves to the postman.



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+DXSWYHUVDPPOXQJ XQG ,QWHUQHW LQ =+5   

Special form problems arise with the holding of general meetings on the Internet. Up until
now the necessary information for the holding of the general meeting (§ 125 [1] AktG) had to
be produced in a written form and sent to the shareholders. Here the recently passed Namen-
saktiengesetz683 (Personal Share Act) helps. By the NaStraG § 125 [2] No. 3 AktG has been
changed in such a way that the executive board will now be able to inform individual share-
holders (with their consent) by e-mail with an attached download. But this regulation raises
difficult problems: It is doubtful if a general consent by the shareholders is sufficient for all
future cases. It is also questionable who has to maintain the e-mail addresses and whether the




                                   Thomas Hoeren-Internet Law                                215
shareholder can use various e-mail addresses. It also has to be clarified whether other share-
holders may view the e-mail addresses and what will be effective in case of a failure to re-
ceive the e-mail.


Concerning the conferral of proxy papers, relief from the requirement of the written form can
be provided in the corporate statute (§ 134 [3] AktG). The authorization of a credit institute
can be conferred formless (§ 135 [1] AktG). A shareholder can also give instructions to the
credit institute by e-mail to call a general meeting (§ 128 [2], [3] AktG).



 (SURFXUHPHQW DQG IRUP

As a duty deriving from the e-commerce directive the member states have to change the law
so that electronic contracts are not hindered. Public awarding of contracts therefore has to
treat digital and non-digital offers equally. In this respect the EU-directive enables the elec-
tronic conclusion of contracts for public purchases too, and is required to be implemented into
German law by 17th January 2002. The implementation has already taken place in the form of
§ 15 of the new Vergabeordnung (Procurement Statute) which has been in force since Febru-
ary 2001.



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683
   Gesetz zur Namensaktie und zur Erleichterung der Stimmrechtsausübung of 18 January 2001, BGBl. I, 123;
see on this Noack, ZIP 2001, pp. 57: Seibert, ZIP 2001, 53 ff. Similar laws are in preparation at the moment in
Japan; see on this Kozuka, The Reformation of Corporate Law, Tokyo 2001.
                                        Thomas Hoeren-Internet Law                                         216
86$ LQ 'X'   GLHVV 6LJQDWXUUHJXOLHUXQJ LP 5HFKWVYHUJOHLFK %DGHQ %DGHQ
 3HWHU YRQ 2QGDU]D 'LJLWDOH 6LJQDWXUHQ XQG GLH VWDDWOLFKH .RQWUROOH YRQ Ä)UHPGOHLV
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LP GHXWVFKHQ 5HFKW LQ &5   5LH‰ 6LJQDWXUJHVHW] ± GHU 0DUNW LVW XQVLFKHU LQ 'X'
  $OH[DQGHU 5R‰QDJHO $XI GHP :HJ ]X QHXHQ 6LJQDWXUUHJHOXQJHQ LQ 005 
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6FKOHFKWHU (LQ JHPHLQVFKDIWOLFKHU 5DKPHQ IU HOHNWURQLVFKH 6LJQDWXUHQ LQ . 5 %HLODJH
 6FKU|WHU 5HFKWVVLFKHUKHLW LP HOHNWURQLVFKHQ *HVFKlIWVYHUNHKU =XU 1RWZHQGLJNHLW
HLQHU JHVHW]OLFKHQ =XUHFKQXQJVUHJHOXQJ EHLP (LQVDW] HOHNWURQLVFKHU 6LJQDWXUHQ LQ :0
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Apart from the written form, the question of the probative value of digitally generated docu-
ments arises.



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According to the prevailing opinion these documents can only be taken into consideration at
trial within the scope of a free evaluation of the evidence (§ 286 ZPO) in court.684 However,
more and more voices do not recognize the probative value of an e-mail at trial. For example
the provision of an e-mail address, even when secured with a password, has been considered
insufficient evidence that the e-mail holder has actually taken part in an internet auction.685


A qualification as a private document in the sense of § 416 ZPO is not possible because there
is no permanent embodiment and no sufficient signature and moreover the statement of
thought cannot be directly perceived in itself. Therefore, when making contracts on the inter-
net the seller should not believe that the electronically made documents will be complete evi-
dence for the conclusion and the content of the contract. The client will have no problems
pleading that he or she never concluded that contract – or not with that content. Transmission
protocols do not give prima facie evidence for the receipt of the declaration; they can at most
serve as circumstantial evidence.686


684
    On this in detail Nöcker, CR 2000, 176, 180 f.; Geis, CR 1993 f.; Heun, CR 1995, 2, 3; different opinion only
Kilian, DuD 1993, 607, 609.
685
    AG Rostock, judgement of 14th September 2001, MMR 2002, 127 with annotation by Wiebe; similar LG
Bonn judgment of 7th August 2001 – 2 O 450/00 (not published).
686
    BGH, NJW 1995, 665.
                                         Thomas Hoeren-Internet Law                                           217
 (YLGHQWLDO VWLSXODWLRQ

This problem also cannot be solved contractually by making an evidential agreement. A
clause would be conceivable according to which the client has to accept the probative value of
electronic documents as documentary evidence. But such a clause would not have a binding
effect on the court for the evaluation of the evidence in court. The judge could still refuse to
qualify documents as legal documents. Even the binding of the client to this clause is doubt-
ful.687



 $PHQGPHQW RI ODZV

A solution can only be found by changing the laws. Such a regulation can be found for exam-
ple in Great Britain. According to the Civil Evidence Act 1995 a computer file will be admit-
ted as judicial evidence if “it forms part of the records of a business and an officer of the
business provides a certificate of its authenticity”. But this rule is in my opinion not to be un-
derstood as an expression of an increased probative value. It is more pursuant to the fact that
electronic information is not per se excluded from the evaluation of evidence because it is
stored electronically. However the question of the general admissibility of electronic evidence
must be distinguished from the question of the concrete probative value.


An exact definition of the probative value of electronic documents can only be found in Italy.
Pursuant to the Act No. 59 from 15 March 1997 electronic documents should have the same
probative value as paper-documents. Other European countries are skeptical about this liberal
attitude in Italy. They wonder why every electronically generated document should have such
a high probative value despite its manipulability.


Originally the regulation of the probative value was provided within the scope of the German
“Informations- und Kommunikationsdienstegesetz (IuKDG = Information and Communica-
tion Service Act)”. Early drafts of the “Signaturgesetz” (Signature Act) included in this law-
package provided that an electronic document could be accepted as a legal document with
probative value if the authenticity of the electronic signature used can be checked with a pub-
lic key which has been confirmed by a certificate of an authorized certification center which


687
      Hoeren, CR 1995, 513, 516.
                                    Thomas Hoeren-Internet Law                                218
was valid at the time of signing. However the legislator lost heart. There were detailed regula-
tions in the IuKDG regarding digital signatures within the scope of the “Signaturgesetz” and
the ancillary “Signaturverordnung” (Signature Ordinance). But the observance of complicated
rules of procedure for digital signatures does not imply their probative value however. Any
connection between the signature regulation and the ZPO was eliminated later. But this did
not exclude the fact that the digital signature has a special probative value within the free ju-
dicial evaluation of the evidence (§ 286 ZPO), even if the question of the probative value of
digital documents is still a question for the discretion of the individual judge.



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However the European Union came to the rescue here with the Directive on Electronic Signa-
tures passed at the end of 1999.688 Meanwhile the “Bundestag” (Lower House of the German
Parliament) also passed a re-enactment of the Signaturgesetz in February 2001689, to imple-
ment the instructions of the Directive into national law. At the end of November 2001 the
corresponding “Signaturverordnung” came into force.


The Directive distinguishes between “electronic signatures” and “advanced digital signa-
tures”. According to Art. 5 [2] a (simple) electronic signature must not be generally denied
legal effectiveness and admissibility as evidence. An “advanced” digital signature has in addi-
tion an increased probative value. This makes it necessary for the signature to be exclusively
assigned to the signatory, so that identification of the signatory is possible; and that the signa-
ture is made up by means which are under the special control of the signatory, and that it is
connected with the data it refers to in such a way that a later alteration of the data can be rec-
ognized. “Advanced” electronic signatures which are based on a qualified certificate690 should
fulfill the legal requirement of a signature (Art. 5 [1]). With this it might now be certain that
at least where the high security requirements of the German Signaturgesetz are fulfilled the
probative value of a document signed in this way must be the same as that of a private docu-
ment. The same might be effective for signature proceedings in other states if the certification
authorities there meet the requirements determined in Appendix II of the Directive. Certifica-

688
    Directive 1999/93/EG of the European Parliament and the Council of 13 December 1999 on common general
requirements for electronic signatures, Abl. L 13 from 19 January 2000, 12. Parallel to this the preparations for
the UNCITRAL-Model-Act for electronic business have to be noted, which also include the development of
common rules for electronic signatures (http://www.un.or.at/unicitral/index.htm). The OECD is also working on
a survey about formal requirements in the field of electronic signatures.
689
    See MMR 3/2001, p. V with reference to the press release of the BMWi of 15 February 2001.
                                         Thomas Hoeren-Internet Law                                          219
tion authorities who issue a qualified certificate will be liable to every person who reasonably
trusts in the certificate. They are able to restrict the applicability of certificates and the value
of transactions for which a certificate is effective. In these cases the certification authority will
not be responsible for damages which are the consequence of a utilization of the certificate
which was far beyond the scope of application.
The Directive on Electronic Signatures is the right way. But it still leaves questions open. In
particular the relationship between the “advanced digital signature” and the security require-
ments of certain national signature regulations is unclear. As fast as possible, planning cer-
tainty should be established concerning the question of what probative value each safety
structure for a digital document has. But planning certainty can only be established if people
begin to use this signature. The state has set a good example. Large companies are also called
on to supplement classical distribution with a virtual distribution by means of digital signa-
tures and here make available to policy holders the relevant hardware (chip card and reading
device) at a reasonable price. Otherwise there is a danger of the dilemma where everybody is
afraid of being the first and the digital signature therefore never comes to be used effectively.


On 15 February 2001 the “Bundeskabinett” (Federal Cabinet) passed the draft of an act on the
general conditions for electronic signatures and the implementation of the Directive. This
draft also passed the “Bundesrat” (Federal Council) on 9 March 2001. On 22 May 2001 the
Act then was published in the “Bundesgesetzblatt” (Federal Law Gazette).691


With the new Signature Act three stages of signature creation come into operation. First of all,
there is the simple signature. This is a digital signature, which is not made under the condi-
tions of the Signature Act. Such signatures are not illegal, but they are not treated as equal to
the written form (§ 126 [3] BGB). Furthermore, they do not have a higher probative value,
and they lack the assumption of safety according to § 15 [1] SigG.


The new Signature Act only regulates the requirements of a “qualified electronic signature”.
Only such a signature fulfils the conditions of the Signature Act (see § 2 [3] SigG). A “quali-
fied certificate” is every electronic written statement that assigns “signature check keys” to a
natural person and confirms the identity of this person (§ 2 No. 6 and 7). The certificate must
contain certain minimum details (§ 7 SigG) and must correspond to the legal requirements of

690
      The requirements for a qualified certificate can be found in the appendix of the Directive.


                                             Thomas Hoeren-Internet Law                             220
the SigG. Software-based signature systems are also allowed (§ 2 No. 10 SigG) in contrast to
the former SigG. Running a certification service for such certificates does not require a permit
(sec. 4 [1] and [3]).An announcement has to be made to the Regulierungsbehörde für Tele-
kommunikation und Post (RegTP = Telecommunications and Post Authority). The RegTP
also controls any misuse concerning compliance with technical standards. According to § 11
[1] SiG a certification office is liable to a third party for the damage which it suffers because
it relied on the information in the qualified certificate. The liability will not apply only if the
provider can prove that it did not act culpably (§ 11 [2] SigG). According to § 292 a ZPO a
qualified certificate serves for the presumption that the certified electronic expression of will
is real. This presumption can only be disproved by presenting facts which raise serious doubts
about whether or not the expression of will originated from the signature-keyholder’s inten-
tions. Therefore, customers can still claim that their chip card with the signature key was sto-
len, but they have a duty to notify the contract partner of this as soon as possible, otherwise
they lose their right to claim.


A voluntary accreditation is possible for certification service providers who receive an addi-
tional seal of quality from the responsible legal authority (sec. 15 SigG).692 Among these pro-
viders are:


      • The Deutsche Telekom AG with its subsidiary company “T-Telesec Crypt”
         (http://www.telesec.de)
      • The       Deutsche          Post        AG         with        the        service        “Signtrust”
         http://www.signtrust.deutschepost.de)


Since the Signature Act came into force 13 certification offices have been accredited, three
further ones are about to be accredited. The certificates created in this manner have a higher
probative value than just qualified signatures, without any certainty about the exact value.


Clarification is still necessary in the field of inter-operability of the signatures, especially re-
garding use abroad. Not until the end of September 2001 were specifications concerning inter-



691
    Gesetz über Rahmenbedingungen für elektronische Signaturen und zur Änderung weiterer Vorschriften, Bun-
desgesetzblatt 21 May 2001, BGBl. 2001 Teil I Nr. 22, pp. 876.
692
    See on this the services of Verisign http://www.verisign.com and the Trust Centers of the Telekom T-TeleSec
under http://www.telesec.de.
                                            Thomas Hoeren-Internet Law                                      221
operability (ISIS-MTT) published by BMWi (Ministry of economic and technological af-
fairs).



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To understand the Signature Law a short introduction to the technical basics is necessary. The
encryption of electronic information can be done in two ways: symmetric and asymmetric.


a) Symmetric encryption

In symmetric encryption the encipherment and decipherment is done via a consistent key.
Examples of such an encryption can be found in childhood when children for example invent
a secret language: If you say A, you mean B. If you say B, you mean C. Agreements like
these can and must of course follow a more complicated pattern if the exchange of secret in-
formation between adults over the internet is concerned. IBM for example had already devel-
oped the procedure DES (Data Encryption Standard) by the 1980s. With this type of encryp-
tion the secret procedure needs to have been previously discussed between the children. But
on the internet agreements like these are seldom possible. One would usually have to make
such an agreement on the internet itself, which distinctly reduces the security value of the
“security language”. And too many people communicate with each other to be able to agree
on secret procedures within a small group. On the internet one can therefore use only proce-
dures like these in closed user groups.


b) Asymmetric encryption

With asymmetric encryption (public key cryptography) two different pairs of keys are gener-
ated and used. Encryption and decryption keys are not identical; they are like two parts of a
puzzle that are different but can be put together by its user. Therefore, the pairs of keys can be
used for different purposes. On the one hand it can be guaranteed that the message will reach
the recipient without being read by a third person (for example a hacker or criminal prosecu-
tion authorities). For this the encryption key of the recipient will be made public; his or her
                                    Thomas Hoeren-Internet Law                                222
decryption key is kept secret. The sender enciphers the message with the recipient’s public
key and sends the message. The recipient then will be able to decipher the message with his or
her private key and then read it. The message cannot be read by third persons.
Additionally the authenticity of a message can be secured with the pair of keys. For this the
decryption key of the sender will be made public but the his decryption will be kept secret.
The sender ciphers her message and then sends it to the recipient. He will only be able to de-
cipher the message by means of the public decryption keys and will know that only the sender
was able to send the message. As far as this is concerned the key pair has the same effect as a
digital signature.


Here a key generation is important which makes a fast processing of the keys in one direction
possible but not in the opposite direction. For this, the so-called RSA-Algorithm is used
(named after the developers Rivest, Shamir and Adleman). Very large numbers are built that
have to be disassembled into prime numbers. The large number can easily be calculated by
means of the prime numbers. But someone who only knows the large number will have so
many possibilities for calculating it using prime numbers that they will not find the correct
calculation, even not with the help of electronic data processing.
The application of proceedings like these can easily be demonstrated using the example of
eTrust. ETrust is a signature model of the “Deutsche Post Signtrust” on the basis of qualified
certificates (see above).693 In a branch office of the “Deutsche Post” clients receive a chip
card, a chip card reading device and a PIN-number after showing their identity card. Then
Signtrust gives them a key pair that will help the users to sign their e-mails. When sending the
message ETrust transfers it into a code of numbers. This so-called “Hash-value” that is differ-
ent for every e-mail then will be ciphered once again and will be sent to the recipient together
with the original message and the public key. From this basic data the recipient will be able to
see who sent the message (through the public key) and whether it has been transmitted with-
out any alterations (through the Hash-value).


c) Alice and Bob

Traditionally the characters Alice and Bob are used to explain cryptographic operations.
These two want to exchange messages via a channel like the internet, more precisely Alice




693
      See http://www.signtrust.de.
                                     Thomas Hoeren-Internet Law                             223
wants to sign an electronic mail to Bob. Late a bad guy named Mallory gets involved, and the
certification center Trent.
In general only the application of the asymmetric procedure makes sense. Two keys are used -
a private and a public key. Both are assigned to a certain person like for example Alice. They
are interdependent but can be used separately. The private key is only known to the holder. It
is used for enciphering data. The public key should be published as much as possible. Using
this public key the addressees like Bob can check the signature. First of all Alice has to pro-
duce once only a pair of keys, that is one private and one public key. To produce them, Alice
uses her private key. First of all the text she wants to sign is compressed by an irreversible
Hash-Procedure. The compressed version produced like this (Hash-value) is the "fingerprint"
of the text. It then is encoded with the private key. The resulting signature is added to the
document intended for transmission. Today this procedure is taken over by appropriate soft-
ware.



 Document                            Document



                                     Signature
                                                                
 Hash Value



         Encryption


   Private Key

Illustration: signing




-----BEGIN PGP SIGNED MESSAGE-----
Informationsrecht, Prof. Dr. Thomas Hoeren
Donnerstags, 18.00 - 20.00 Uhr im S10
Beginn der Vorlesung: 15.10.1998
Klausur: 11.02.1998
-----BEGIN PGP SIGNATURE-----
Version: PGPfreeware 5.5.3i for non-commercial use <http://www.pgpi.com>
iQCVAwUBNrcWfXATg3nt91HBAQEyxAP/TgKI4n5FVpo5BKbg5QpbENkofXOSNAnE
qul8/ja8MqpvCafS6sPUztgGSer+BrXcBXzuUmCKt+J9OypTb3JEEJpFV40QrdEz

                                   Thomas Hoeren-Internet Law                              224
Ril6eOjBP9hMWlxwUcXT6cNNoZ9EMq0BsH97ZpF6pHLO4yoJZgNaOy8rTAbqWacq
AkDnfIcen2c=
=VMWr
-----END PGP SIGNATURE-----
Illustration: example of a message signed with PGP


In principle, instead of the hash-value the actual message could be copied and encoded with
the private key and in this way serve as a signature. Here the significantly higher amount of
text and operating effort would be problematic, due to the complexity of the asymmetric pro-
cedure. Common procedures to form the shortened hash-value are the algorithms RIPEMED-
160 or SHA-1 with a hash-value of 160 bits. The algorithms are characterized by the fact that
they are irreversible. That means according to present knowledge it is impossible to produce a
text matching a given hash-value except by Brute Force (systematic trial and error of all pos-
siblities). The probability of two documents having the same 160 bit long hash-value is 1 to
2160.
For encoding, two procedures can be considered. Quite common is RSA, the encoding and
decoding procedure which consists of ciphering and deciphering the hash-value. Here very
complex mathematical functions come into operation. According to the present stage of theo-
retical knowledge it is impossible to break the encoding exept by a Brute Force attack. With
this all possible keys are tried systematically. Due to the sufficient length of the keys the nec-
essary effort would exceed the current world-wide data processing capacity. Furthermore keys
could be variably lengthened if necessary. Presently a length of 1024 Bits is current, in the
future 2048 Bits will be used.
Bob now receives the message. His software also compresses the text using the same proce-
dure which Alice’s software used and which was indicated in the signature. This adds up to a
hash-value again. This hash value, Alice’s public key as well as the digital signature of the
document received are now drawn on to verify the signature. To do this with the RSA-
procedure the software decodes the signature with Alice’s public key and obtains the hash-
value back, which Alice’s software had produced and added to the signature. The two hash-
values now have to be compared. If they match, the identity of the text sent and received is
clear. In addition it is certain that only Alice, the only one holding the private key, could have
produced the signature, because otherwise the public key would not fit.




                                    Thomas Hoeren-Internet Law                                225
                    Document                      Hash Function



                   Signature



                                              Hash Value             Hash Value
                   Decoding
                                                            Comparison

                    Public Key
                   of the Sender
                                                                                               Il-
lIllustration: Verification of signed documents


Nevertheless the procedure is based on the assumption that Alice’s public key used by Bob is
authentic, meaning that the key indeed came from Alice. Bob could be sure about that, if Al-
ice had personally handed the public key over to him. This is not workable in most cases. Al-
ice could also make the key available on her website. However this is not safe enough: in this
situation Mallory could infiltrate the internet communication and manipulate the key retrieved
or replace it with his own public key (Man-in-the-middle-attack). Mallory could then send
Bob a message pretending it was signed by Alice. Bob’s verification would than show that the
message had indeed been signed by Alice.
Instead of this certificates are used. Qualified electronic signatures are electronic signatures
based on a certificate valid at the time of the signature-production. The certificate is an elec-
tronic attestation, by which a public key can be assigned to a person and the identity of this
person is confirmed. It contains besides the public key among other data declarations like the
holder’s name (or a pseudonym), the name of the certification center and the expiry date of
the certificate.
If Alice wants to obtain a certificate, she has to apply to a certification center like Trent. She
has to hand in her public key. Trent now signs the public key with his own private key. This
procedure can be repeated on several levels, which creates a certifying hierarchy. This is also
called PKI (Public Key Infrastructure). Besides that there are similar but non-hierarchic pro-
cedures like the popular "Web of Trust" used with PGP.
Certificates are issued by certification centers. Thus in June 1999 the four big German Banks
joined together in the security service provider "TC Trust Center". This provided a basis for a
                                    Thomas Hoeren-Internet Law                                226
common certification provider for the private banks. In addition certification is offered for
example by the Deutsche Post AG (German Mail Corp.) with SignTrust and the Deutsche
Telekom with Telesec. The same applies to several professonal associations. The status of
certification providers who have been accredited by the regulation authority or have an-
nounced their activity to it, can be found under http://www.regtp.de.
In this way addressees who possesses the public key of a certification center can verify signa-
tures. Besides that they can check directly whether a certificate is valid by consulting the pub-
lic lists of the certification centers. A certificate might, for example have been withdrawn, due
e.g. to the private key being compromised. Thus Bob only needs to make sure that the public
key of an authority as high as possible in the certification hierarchy (like the RegTP) as source
authority is correct. Thus if necessary he can check at several several levels whether Alice’s
certificate and thus her public key is correct. In addition he should check whether or not the
certificate has been withdrawn in the meantime by checking the corresponding public data-
bases of the certification provider.
Presently signing procedures are predominantly carried out on personal computers using spe-
cial software like PGP. In doing so private keys are typically stored on data carriers like disks.
But this procedure is not safe enough, since the personal computer could be attacked by Tro-
jan Horses for example, thus spying out the private key. In the future SmartCards will be in-
creasingly widespread, which contain the private key and process the encoding operation di-
rectly on the card, meaning that the private key never leaves the card. Code scanners are nec-
essary for this. Compared to the now-common simple code scanners, high-quality devices
with a display are preferable. The display shows the text which is meant to be signed in order
to prevent unwanted texts from being foisted on the user. Quite problematic in regard to digi-
tal signatures is for example the long-term archiving. The sensitivity of signatures is subject
to technical progress, meaning that a signature produced now by Alice may well be irrelevant
in future, if the procedures used prove to be insecure. Therefore when choosing a procedure it
is necessary to plan on sufficient head-start when compared to progressing technology, e.g.
regarding the bit length used compared to the present breakable bit length and if need be to
modernize important signatures with new procedures (signing over).



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The incorporation of the general conditions of trade into a website raises special difficulties.
According to § 305 [2] BGB the general conditions of trade must be explicitly referred to at
the time of conclusion of the contract and the customer must be given a reasonable opportu-
nity to take notice of them. If the general conditions are referred to in advance in a framework
agreement and their inclusion in the main contract expressly agreed upon, the requirements of
§ 305 [2] BGB are fulfilled.


The incorporation of general conditions that can only be seen by the user via electronic re-
trieval is problematic. Here the adjudication on the BTX-transactions is often used in argu-
ment, which state that reading lengthy conditions is unreasonable because of the long duration
of transmission.694 For texts longer than one screen page there should be the a print-out should
be available.695 Others however point out that printing involves costs, requires client skills
concerning printing methods and also requires the existence of a printer.696 Because of the
potential for subsequent alteration, the literature considers effective agreements about general
conditions over the internet to be impossible.697
In my opinion these requirements seem to be exaggerated. Especially in the www-area cus-
tomers are free to load the general conditions onto their computer or a proxy-server and to
read them without any additional transmission costs. Additionally they will be able to print
them out and thereby be sure they are taking authentic notice of the general conditions in
question. In the end customers use the internet for the conclusion of contracts of their own
free will and therefore also have to accept the informational possibilities of the internet. A


694
    LG Freiburg, CR 1992, 93; similar also LG Aachen, NJW 1991, 2159, 2160; LG Wuppertal, NJW-RR 1991,
1148, 1149; AG Ansbach, 3 C 295/93 quoted from Herget/Reimer, DstR 1996, 1288, 1293. Scholars of the same
opinion are: Ulmer/Brandner/hensen, AGBG, 8th edition 1997, § 2 margin note 49a and Borges, ZIP 1999, 130,
135; Mehrings, BB 1998, pp. 2373, 2380.
695
    Heinrichs, NJW 1999, 1596, 1598; similar also Borges, ZIP 1999, 130, 135.
696
    See on this Mehrings, BB 1998, 2373, 2378; Kamanbrou, CR 2001, 421, pp. 423.
697
    Wolf/Horn/Lindacher, AGBG, 4th edition 1999, § 2 marginal note 24; Bultmann/rahn, NJW 1988, 2432, pp.
2434.
                                         Thomas Hoeren-Internet Law                                   228
subsequent change of the general conditions would create liability to prosecution for fraud.
Hence this rather vague possibility actually supports an effective agreement on the general
conditions.698


The mere reference to the general conditions on a webpage is not sufficient, for example
within the scope of frames on the entry site699. The inclusion into the online order form of a
reference to the general conditions complete with a link is to be recommended: “With this I
order the following items and have taken notice of the general conditions of trade (link here)
and accepted them: ...”. Even more distinct would be windows with the general conditions
compulsorily integrated into the order procedure that can be closed only through a button-
click by the customer. In this case four windows would have to be established that have to be
“clicked” one after the other and have to be confirmed. These four windows are
      • a window for the description of the supplier and the chosen product (according to the
         requirements of the “Fernabsatzgesetz” = Distance Contracts Act),
      • a window with the general conditions of trade,
      • a window with data protection consent (see §§ 4, 4a BDSG (Federal Data Protection
         Act) and
      • a window with the opportunity to make corrections to the order (requirement of the Di-
         rective on E-Commerce; in future regulated in § 312 e [2] BGB).


Furthermore, § 312 e [1] BGB (Civil Code) has to be observed which is the implementation
of Art. 10 [3] of the E-Commerce Directive.700 According to this the conditions of the con-
tract including the general conditions of trade have to be made available to users in such a
way that they will be able to retrieve them and to save them, so that they can be reproduced.
In this regard references to technical storage possibilities via shortcuts like ctrl-s and ctrl-p are
necessary.701 The possibility of reproduction will be best secured if the general conditions are
made available as an HTML-document for downloading.


698
    LG Münster, 4 O 424/99 (not final): “also extensive general conditions of trade will be effectively included
when concluding a contract on the Internet if the client has the opportunity to copy them for free”; similar
Palandt/Heinrichs, BGB, 59th edition 2000, AGBG, § 2 marginal note 1688; Moritz, CR 2000, 61, 64; v. Bern-
storff, RIW 2000, 14, 16; Waldenberger, BB 1996, 2365, pp. 2368.
699
    See also referring to possible mistakes regarding the integration of general conditions the gloss under
http://www.kommdesign.de/galerie/empfang/rechtsabteilung.htm .
700
    The decision of the BMJ, to implement the E-Commerce Directive partially as part of the „Schuldrechtsmod-
ernisierungsgesetz“ will raise difficulties in so far as the amendment of the law of obligations will then also fall
under the notification duty of the European Transparency Directive and the notification procedure will take sev-
eral months. Disscussions on this within the BMJ are pending.
701
    See Kamanabrou, CR 2001, 421, pp. 424.
                                            Thomas Hoeren-Internet Law                                         229
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   • the payment procedure,
   • the prices,
   • the shipping charges,
   • the reservation of ownership,
   • information on withdrawal, the costs of returning goods (“Fernabsatzgesetz” = Distance
       Contracts Act),
   • no illegal restriction of warranty and liability (§ 307-309 No. 7 and 8 BGB),
   • no choice of jurisdictional venue in relation to non-commercial customers and
   • the foreign user of standard terms and conditions in relation to commercial customers .


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   • simple right of utilization,
   • ownership of copies of the work?,
   • admissible = license for a single location with a prohibition of a simultaneous utilization
       of several CPUs;
   • but not a restriction to a particular CPU,
   • inadmissibility of a prohibition on resale (§§ 17 [2], 69 c No. 3 UrhG (Author’s Rights
       Act) in connection with § 307 [1] BGB) but: transmission of the general conditions
       concerning non-business users and destruction of older copies,
   • rental rights remain with the provider (§§ 27, 69 c No. 3 UrhG),
   • no sublicenses by users,
   • safety copies (§ 69 d [2] UrhG) are imperative concerning software,
   • restriction of error correction and de-assembling is illegal (§§ 69 d [1], 69 e UrhG) if the
       provider itself supplies no support service.



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                                    Thomas Hoeren-Internet Law                               230
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On the German-language internet, credit cards, direct debiting and payment on account are the
most widespread means of payment.
The advantage of the credit card is that it is quite obvious as an international means of pay-
ment even for international transactions. Its advantage for sellers is that the credit card com-
pany makes a payment guarantee so that they do not need to rely primarily on the credit sol-
vency of the customer. But customers can easily cancel payments by credit card so that their
risk is kept within reasonable limits. Security problems arise when data is transmitted unpro-
tected over the internet so that it can easily be intercepted and read. To combat this problem,



                                   Thomas Hoeren-Internet Law                               231
SET (Secure Electronic Transaction)702 was developed which makes a ciphered form of data
transmission possible as well as the identification of the persons who participate in this trans-
action, through digital signatures and certificates. SET is a world wide standard for payments
by credit card on the internet and serves to protect credit card data while transmitting it on the
internet. The number of credit card issuers and sellers who offer SET-protected payments is
still increasing.703 But in contrast to other protocols that cipher the transmitted data stream,
like for example SSL (Secure Socket Layer), SET is still a platform-bound solution.


In direct debiting the seller electronically receives authorization to collect the invoice amount
per direct debit from the customer’s current account. In oder to do this the customers provides
his or her bank details to the seller, mostly by using a WWW-form. A disadvantage of this
procedure is that the seller does not have a proof of the direct debiting authorization because
that requires the customer’s personal signature. According to the direct debiting agreement
between the credit economy and the industry this form of proof is compulsory; an electronic
document is not sufficient.704 A further element of uncertainty for the seller is that the cus-
tomer can make a reverse-entry of the direct debit within six weeks without any problems.
Direct debiting is not suitable for international transactions because in this form it is restricted
to domestic transactions.
With regard to invoice delivery it has to be noted that the seller bears the risk of the credit
solvency of the customers and their willingness to pay, because the delivery of goods occurs
first in relation to the payment. Without additional means to ensure the identity of the client
and the authenticity of the order – for example through the application of digital signatures
and certificates – this form of payment is not the best possible for most internet-sellers.


Systems that make payment on the internet per chip card (for example money cards705 or
Mondex706) or net money (for example eCash707) possible, are continuously in development
but so far have not been used in practice. A relatively new offer that will probably lead to an
acceptance of the payment systems is to offer the eCash-software in connection with a credit



702
    http://www.setco.org/.
703
            Compare        for      example         http://www.mastercard.com/shoponline/set/bycountry.html;
http://www.eurocard.de/online-shop-ping/nachweis/set_nachweis.html;
http://www.visa.com/nt/ecomm/shopping/set_merchants.html; http://www.visa.de/ks/karten/partner.html.
704
    Hoeren/Sieber/Werner, 13.5, marginal note 39.
705
    See http://www.sparkasse.de/ecommerce/, there also information on SET.
706
    http://www.mondex.com/; Mondex is not available in Germany.
707
    http://www.ecashtechnologies.com/; http://www.deutsche-bank-24.de/ecash/.
                                         Thomas Hoeren-Internet Law                                     232
card.708 Also systems are being developed which make so called micro payments on the inter-
net possible; the best known examples are Millicent709 and CyberCoin710.


The functionality of these forms of electronic money has been described in detail in litera-
ture.711 Here, the further legal assessment will be restricted to net-money712 and the first refer-
ence will be to the pioneering article by Escher.713 The decisive turning point is the question
whether the legal nature of net-money is more a claim against the bank or some kind of a
vested debenture bond (§§ 793, 797 BGB). In the first case net-money would have to be
treated parallel to “normal” assets in a bank; but then the circulation ability of the net-money
would also be endangered because of the strict protection of good faith concerning the as-
signment of claims714. In the second case an assessment oriented to the law of property be-
comes the focus of attention according to which net-money is a digital coin but can still be
transferred pursuant to § 929 BGB. However this assessment goes wrong because net-money
does not have the quality of a legal document and in this respect the assumption of a vested
debenture bond must be wrong.715 Therefore, Escher proposes an analogous application of the
regulations regarding bearer bonds and in this respect speaks of “bearer bond data”, “digital-
ized bearer bonds” or rather “value data”.716 This analogous conclusion is at least justified for
open systems which also admit a use of e-cash outside a bank-referred test business. It corre-
sponds to the analogous application of the property regulations regarding software made by
the prevailing opinion717 which is in this regard only seen as a special case of digital informa-
tion. But the situation is different for closed e-cash systems which are now in test operation.
There, a separate big bank “gives” e-cash to certain chosen customers and afterwards
“cashes” it from the supplier. Following from the legal classification of the money card718, the
relationship between the customer and the bank is to be seen as a contract for services in the
sense of § 675 BGB. The transmission of the digital “coin” from the customer to the seller
implies a separate instruction by the customer to the bank pursuant to §§ 665, 675 BGB to


708
    http://www.deutsche-bank-24.de/g_konto_yahoo_card.html.
709
    http://www.millicent.digital.com/.
710
    http://www.cybercash.com/.
711
    See especially Furche/Wrightson, Cybermoney, 1997; Birkelbach, WM 1996, 2099; Jaskulla, ZBB 1996, 216;
Escher, WM 1997, pp. 1163; Hoeren/Sieber/Werner, 13.5 passim; Gramlich, in: Handbuch zum Internet-Recht,
pp. 103, 105.
712
    On this see the detailed considerations by Kümpel, WM 1997, 1037.
713
    Escher, WM 1997, 1163, especially 1180.
714
    See §§ 407, 409 BGB.
715
    On the missing quality of a legal document see also the comments below.
716
    Escher, WM 1997, 1173, 1181.
717
    See BGH, NJW 1988, 406.
718
    See Escher, WM 1997, 1179.
                                            Thomas Hoeren-Internet Law                                 233
debit the e-cash account with a certain amount and to credit the amount to another account.
The seller transmits this instruction as a messenger to the bank which confirms the cashing to
the seller after an online-examination of the “coin-file” submitted. With this declaration the
bank creates an abstract financial obligation to the cashing seller. In the relationship between
the customer and the seller, eCash can only be seen as a performance in full discharge of the
obligation (§ 364 [2] BGB).


Regarding the application of regulations on public supervision of banking to net money it has
to be noted that within the scope of the 6. KWG-reform719 net-money transactions have been
integrated into the catalogue of sec. 1 KWG and as a consequence only banking houses are
allowed to issue digital money (§ 1 No. 12 KWG; effective since 1 January 1998). According
to the Directive of the European Parliament and the Council on the taking up, carrying out
and supervision of transactions of e-money institutions720, in future there will also be an issue
of electronic money by non-banking houses, which will not be subject to such strict require-
ments as now - if this is restricted to this field of activity only. At the moment only eCash
falls under the term net-money in the sense of § 1 No. 12 KWG; with regard to Millicent the
marketability is lacking whereas SET is tied to deposit currency accounts. But the former
rules concerning net worth and liquidity of credit institutions however can be transferred to
net-money to secure sufficient liquidity for the expenditure of net-money. In regard to mone-
tary law net-money cannot be seen as a legal instrument of payment in the sense of § 14 [1] s.
3 BBankG (Federal Bank Act) and therefore interferes with the banknote monopoly of the
Deutsche Bundesbank (German Federal Bank). Issuing net-money is not liable to prosecution
pursuant to § 35 BBankG. Because of the planned elimination of the regulations concerning
the safety fund, the question of whether issuing net-money would lead to a reduction in the
circulation of notes and coins dangerous to safety fund policy, does not play any further role.
The “Geldwäschegesetz” (Money Laundering Act) which requires in § 2 an “adoption or
submission of notes and coins” is not applicable to net-money either directly or analogously.



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719
    Art. I of the implementation of EC-Directive on the Harmonization of Banking and Security Supervision of
22 October 1997, BGBl. 1997 I Nr. 71, 2518 of 28 October 1997.
720
    Directive 2000/46/EC of 18 September 2000.
                                        Thomas Hoeren-Internet Law                                      234
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Questions of consumer protection play a special role with regard to utilisation of the internet.
In particular the question arises as to how far regulations of consumer protection law are ap-
plicable to electronic orders via e-mail.



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For consumer contracts too, the applicable substantive law has to be determined first. Finding
the governing law of the contract follows Art. 27-37 EGBGB (Introductory Act to the Civil
Code) but with observance of the special consumer protection rules of the German Private
International Law.
The UN Sales Convention will not be applicable according to Art. 2 lit. a CISG if the con-
sumer transaction is recognizable for the seller. This recognizability may be missing if an em-
ployed person places an order with the e-mail address of the company, but the goods or ser-
vices are intended for private personal use.
A choice of law is also permitted for consumer contracts and has to be considered primarily
for the determination of the applicable law. But pursuant to Art. 29 [1] EGBGB this choice of
                                    Thomas Hoeren-Internet Law                              235
law must not lead to the consumer losing the protection which is guaranteed by the imperative
regulations of the state in which he has his habitual residence. Even if the application of for-
eign law is agreed on the German consumer will be under the protection of the [former] HwiG
(Door-to-door Selling Act) , the VerbrKrG (Consumer Credit Act) and the AGBG (General
Conditions of Trade Act) (all of them now regulated in the BGB) when placing electronic
orders.
As a prerequisite, a consumer contract in the sense of Art. 29 [1] EGBGB must be concerned,
meaning that the purpose of the contract cannot be ascribed to the professional or commercial
occupation of the customer. Furthermore, it is partially required – like in Art. 2 lit. a CISG -
that the contracting party must be able to recognize the purpose of the contract from the ob-
jective circumstances.
The contract must be made for rendering services or for the delivery of movable goods.
Moreover one of the alternatives listed in Art. 29 [1] No. 1-3 EGBGB must be given.
Whereas No. 3 obviously cannot be applied to the conclusion of contracts on the internet, No.
2 could be pertinent from its wording. The case where the consumer’s contract partner or his
representative has accepted the order of the consumer within the consumer’s state of residence
is regulated there. But a non-physical presence which exists only in the ability to retrieve a
website is generally not sufficient. But in part an acceptance in the home state in the sense of
Art. 29 [1] No. 2 EGBGB is affirmed where from the average consumer's point of view a
purely domestic transaction has occurred, i.e. if the seller makes use of a domestic server.
In any case, No. 1 has to be taken into consideration for the conclusion of contracts on the
internet, according to which there has to be an explicit offer or an advertisement within the
consumer‘s state of residence before concluding the contract. The consumer must also have
accepted the legal actions required for making contracts in this state. Generally it is required
that “advertisements” in the sense of Art. 29 [1] No. 1 EGBGB are aimed at the consumer‘s
state of residence. However, internet supplies are normally not aimed at a specific state but
addressed to the whole world. On the other hand, an address on the internet is regarded as
individual and it would also be inconsistent if providers did not have to be responsible for the
international character of their medium. The risk of being subject to a huge number of legal
systems (overspill-risk) must generally be borne by the person who makes use of a transna-
tional medium. Therefore, it must be sufficient for the application of Art. 29 [1] No. 1
EGBGB that the internet advertising is at least aimed at the consumer’s state of residence.
But it is questionable whether the protective purpose of Art. 29 EGBGB can be transferred to
internet transactions. No. 1 and No. 2 should protect those passive consumers who remain

                                   Thomas Hoeren-Internet Law                                  236
within their home country and are contacted from abroad. But when making contracts on the
internet consumers virtually travel abroad and in this respect they become active consumers.
On the other hand, the consumers physically stay within their state of residence and only react
to the offers and/or advertisements on a foreign website. In this respect the protective idea is
also applicable to contracts made on the internet.
If the parties did not make a choice of law, the law of that state is applicable to consumer con-
tracts in which the consumer has his or her habitual residence (Art. 29 [2] EGBGB). In this
context there are neither problems nor special features arising concerning contracts concluded
on the internet.


Until now there have been two special points of contact supplementing Art. 29 EGBGB
within the area of consumer protection law: § 12 AGBG (General Conditions of Trade Act)
and § 8 TzWrG (Installment Withdrawal Act). Another special regulation was provided by
Art. 12 II of the Directive on Distance Contracts. Art. 29a EGBGB was enacted by the Fern-
absatzgesetz (Distance Contracts Act) of 30 June 2000, where all three consumer protection
regulations based on the EU directives have been summarized. The former regulations of § 12
AGBG and § 8 TzWrG have been replaced by this.
Art. 29a EGBGB has to be considered DIWHU art. 29 EGBGB, and namely irrespective of the
question whether the scope of Art. 29 EGBGB has been reached. The recourse to Art. 29 a
EGBGB will only be obstructed if the third-state law that has been agreed on is applicable
according to Art. 29 [1] EGBGB because it is more favorable compared with the law of the
state of residence.
In contrast to Art. 29 EGBGB which refers to the applicability of DOO consumer protective
regulations, Art. 29 a EGBGB only determines the applicability of norms which have been
enacted by implementing consumer protection directives. These are conclusively listed in Art.
29 a [4] EGBGB, but this list can be extended by the legislator if needed. Moreover the enu-
meration is organized “dynamically”: reference is made to the secondary legally relevant acts
“in their currently valid version”.


Like Art. 29 EGBGB Art. 29 a EGBGB only refers to factual situations where there is a
FKRLFH RI ODZ in favor of the law of a state other than the home state. Factual situations to
which the law of another state is applicable because of an objective point of contact are not
included: They cannot be influenced by any of the parties to their advantage, a special protec-
tion of the consumer is therefore not necessary.

                                      Thomas Hoeren-Internet Law                             237
So Art. 29 a EGBGB will be applicable if:


       • the contract does not fall under the law of a member state or a contractual state of the
           EEA by operation of a subjective point of contact (that means choice of law) and
       • the contract shows a strong connection “with the territory of one of these states”.


If these requirements are fulfilled the judge has to apply the “valid provisions for the imple-
mentation of the consumer protection directives” of that EU- respectively EWR-state “to
which the contract shows a close connection”. So that statute will be applicable to which the
contract shows a special relationship. The norms that are effective there and specific to the
Directive are complementary to the norms of the governing law determined by choice of law.
Art. 29 a [2] EGBGB provides guiding examples of a “strong connection”. Such a strong
connection exists for example according to art. 29 a [2] No. 1 EGBGB with the EU or the
EEA -state in which a public offer, public advertisement or similar related to business comes
into action, based on which a particular contract has been concluded.
More important than this is Art. 29 a [2] No. 2 EGBGB which connects closely to the habitual
residence of the consumer in so far as this is within a EU- or EEA-state. Problems arise with
the referral to the law of a member state where the Directive has not yet been implemented or
where a secondary legally relevant act has been implemented in time but not correctly. If Art.
29 a [1] EGBGB leads to an application of the law of a member state which does not corre-
spond to the Directive, the German judge has to try to interpret this law in conformity with the
Directive using the appropriate canon of methods. If this is not possible the consumer may file
a state action against the tardy member state.721 According to the EU-law the person applying
the law may not restrict the legal consequences determined in Art. 29 a [1] EGBGB and en-
force the German lex fori by recourse to Art. 34 EGBGB.




721
      Staudinger, RIW 2000, pp. 416, 417.
                                            Thomas Hoeren-Internet Law                         238
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Some of the literature applies the “Haustürwiderrufsgesetz”722 to cases of internet shop-
ping.723 The regulations of this act can be found in the BGB (Civil Code) as of 1 January 2002
in (§§ 312-312a BGB). It is not disputed that the requirements of § 1 HWiG (§ 312 BGB) are
not met in this case. Some argue that because of the leisure-time character of “net surfing”
with a corresponding webpage design, a subsumption under the term “Freizeitgeschäft (lei-
sure time transaction)” and with this a direct application of the HWiG according to § 1 [1] No.
2 (now § 312 [1] s. 1 No. 2 BGB) would be possible.724 In any case however, an analogous
application of the ban on circumvention of § 5 [1] HWiG will be imposed. The prerequisite
for this would be that the contract came about under circumstances which can objectively be
compared to the cases described in the Act.725 The meaning and aim would also be to protect
the customer from the risks of hasty and ill-considered contracts.
The customers themselves enter the net and call up the desired webpage. As a consequence
they decide freely whether to place an order or not. Therefore, the prevailing effect in other
market sectors of taking someone unawares is missing.726 The application of the HWiG to
internet supplies is partly considered possible if the customers find advertisements by surprise
when calling up a webpage.727 But the HWiG is not a law for protection against every form of
surprising or misleading advertising. Moreover, §§ 1, 3 UWG are applicable in this case. A
sale situation comparable to a door-to-door selling therefore does not objectively exist.



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6WHSKDQ /RUHQ]W =HLWVFKULIWHQDERQQHPHQWV LP ,QWHUQHW ± KHXWH XQG PRUJHQ LQ 1-: 
 3HWHU 0DQNRZVNL :HEVLWHV XQG 9HUVDQGKDQGHOVSULYLOHJ LQ &5  




722
    Gesetz über den Widerruf von Haustürgeschäften und ähnlichen Geschäften (HwiG) from 16 January 1986
(BGBl. I, 122).
723
    Ermann/Klingsporn, § 1 HwiG Rdr. 13 b; Eckert, DB 1994, 717, 721 f; Gilles, NJW 1988, 2424, 2427.
724
    Ruoff, E-Commerce und Verbraucherschutz – Zur Anwendbarkeit des Haustürwiderrufsgesetzes im Internet,
NJW-CoR 2000, 38.
725
    MüKo-Ulmer, § 5 HWiG, marginal note 4.
726
    Like this also Waldenberger, BB 1996, 2365, 2367; more detailed Köhler, NJW 1998, 185, 187.
727
    Waldenberger, BB 1996, 2365, 2367.
                                        Thomas Hoeren-Internet Law                                    239
For e-business the Consumer Credit Provisions could also be relevant. They could be found
until January 1st 2002 in the "Verbraucherkreditgesetz" (VerbKrG) of 17 December 1990728 .
Since the reform of the law of obligations the provisions of §§ 491 ff BGB are in force.


The consumer credit provisions are effective for
       • credit contracts (§ 491 [1] BGB), debt deferrals of more than three months (§ 499 [1]
           BGB) and other financing aids (§ 499 [1] BGB) as well as installments (§ 499 [2]
           BGB,
       • between a business person (§ 14 BGB) offering the loan and the consumer (§ 13) ac-
           cepting the loan as a natural person
       • if the credit or the cash price is higher than 200 ¼ †  >@ 1R  %*% †  >@
           BGB) or if a debt deferral of more than three months is granted (§ 3 No. 1 and 3
           VerbrKrG).


These transactions can only be taken into consideration in two forms on the internet. For one
thing, loan agreements could conceivably be made via electronic mail. But this is rare at the
moment. The conclusion of installment contracts is more interesting. Indeed electronic mail-
order companies also offer installment credits, for example by a virtual mall. If they merely
relied on the exchange of e-mails these agreements would be void. These transactions must be
in a written form which means they must be personally signed by both parties according to §
126 [1] BGB. An electronic signature does not fulfill these requirements – not even by meet-
ing the above-mentioned requirements for digital signatures – (also like this expressly § 492
[1] s. 2 BGB in connection with § 501 BGB). Thus, the attempt to make loan agreements
would be doomed to failure when applying the VerbrKrG (§ 494 [1] BGB). However it has to
be noted that the noncompliance with the required form will be cured by delivering the goods
or by taking the credit (494 [2] BGB). In these cases the contractually agreed rate of interest
will be reduced to the legal rate of interest (§ 494 [2] s. 2 BGB).


Regarding part-payment contracts in distance selling, § 502 [2] is of central importance. Ac-
cording to this, part-payment-contracts do not require written form, if
       • the brochure contains the cash price and the part-payment price, amount, number and
           due date of the particular rates and the annual percentage rate and



728
      BGBl. I, 2840.
                                      Thomas Hoeren-Internet Law                           240
      • the necessary information is communicated to the consumer early enough for him or her
         to inspect the information duly before signing the contract.


Differing from § 502 [2] BGB of the draft, the law does not mention the durable medium any
more; the reference to the text form refers to § 126 BGB.


The consumer’s right of withdrawal is also important. According to § 495 [1] in connection
with § 355 BGB the consumer has the right to revoke an expression of will within two weeks
in writing or on another durable medium. The time period starts only if the consumer has re-
ceived information about the right of withdrawal, which he or she has to sign separately. If the
correct information is missing the customer will be able to withdraw within 6 months after
making the declaration (355 [3] BGB).


Besides credit contracts certain regulations of the Consumer Credit Provisions are also effec-
tive for recurring obligations to buy (§ 505 BGB), for example magazine subscriptions or as
part of a club membership. The right of withdrawal also applies to installment delivery con-
tracts concluded via internet (§ 505 [1] s. 1 BGB). They must also be agreed in writing; nev-
ertheless the written form can be replaced by giving the consumer the opportunity to call up
the contract’s clauses and the general conditions when concluding the contract and store them
in a form appropriate for reproduction. This complies with the standards set by caselaw refer-
ring to the old § 8 VerbrKrG; especially the decision of the OLG München in the case
“Bunte”729. The court concluded from the application of § 8 VerbrKrG to subscription con-
tracts that the provision of the necessary consumer information on a durable medium was suf-
ficient. But a “durable medium” was to be interpreted in such a way that the information must
be available to consumers for as long as they need to take note of the data provided before
making their offer. It is not necessary for the information to be available after placing the or-
der. Therefore, consumers only need to be able to retrieve the information from the com-
pany’s webpage in order to make it visible onscreen for as long as necessary.



 'LVWDQFH VHOOLQJ SURYLVLRQV

/LWHUDWXUH


729
   Decision of 25 January 2001, NJW 2001, 2263 with annotation by Lorenz, NJW 2001, 2230 = ZIP 2001, 520
= ZUM 2001, 436 = CR 2001, 401 with annotation by Mankowski.
                                      Thomas Hoeren-Internet Law                                     241
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Since 1992 the European Commission has been planning a directive on the protection of con-
sumers in respect of distance contracts. After first drafts730 a Common Position731 was deter-
mined by the Council on 29 June 1995. Under consideration of 31 amendment proposals732


730
    Abl. EG Nr. C 156 of 23 June 1992, 14; Abl. EG Nr. C 308 of 15 November 1993, 18.
731
    Abl. EG Nr. C 288 of 30 October 1995, 1 = EWS 1995, 411.
732
    See on this EuZW 1996, 131.
                                         Thomas Hoeren-Internet Law                       242
which were made by the European Parliament, the Directive was passed on 20 May 1997733.
In order to implement the Directive, the Federal Ministry of Justice first published an imple-
mentation draft734 for the so-called “Fernabsatzgesetz” (Distance Contracts Act) with a de-
tailed explanation. On that basis the “Fernabsatzgesetz” was enacted on 9 June 2000.735 The
Act became effective on 1 July 2001. In this respect the time-limit for the implementation set
by Brussels (June 1st) was exceeded by several days, which was the fault of the German Pub-
lishers and Booksellers Association. This association noticed at the last minute that a right of
withdrawal concerning books might cause difficulties for the publishing trade. The late im-
plementation might lead to a liability of the Bundesrepublik but one which should be of
minimal significance in practice because of the minor overshooting of the deadline. Mean-
while there have been a lot of articles in literature on the “Fernabsatzgesetz” (Distance Con-
tracts Act)736, a legal framework which was not specifically designed for the internet but
rather for telephone transactions or tele-shopping.


A further modification was made by the “Schuldrechtsmodernisierungsgesetz” (Law of Obli-
gations Reform Act). By this the regulations of the “Fernabsatzgesetz” will be transferred into
the BGB (§ 312 b-d BGB) without modifications being made.737


a) Scope of application

The applicability of the “Fernabsatzgesetz” (Distance Contract Act) is according to § 312 b
[1] BGB restricted to the conclusion of contracts with the exclusive utilization of distance
communication techniques. One of the contracting parties must be a consumer in the sense of
§ 13 BGB. The other party must act within the scope of a distribution or service system de-
signed for distance selling (§ 312 b [1] BGB). Traditional distribution methods like catalogues
and mail order businesses as well as modern forms like e-mail sale, distribution on the inter-
net, tele-shopping and the like form part of those distance communication techniques defined
in § 1 [2] (§ 312 b [2] BGB).


733
    Directive 97/7/EG of the European Parliament and the Council of 20 May 1997 on Consumer Protection
concerning Contracts of Distance Selling, Abl. Nr. L 144/19 from 4 June 1997.
734
    Draft bill of 31 May 1999, available on the Internet under www.bmj.bund.de7download/fernag.doc. See also
Waldenberger, K & R 1999, 345.-
735
    Gesetz über Fernabsatzverträge und andere Fragen des Verbraucherrechts sowie zur Umstellung von Vor-
schriften auf Euro from 27 June 2000, BGBl. I, 987.
736
    See Fuchs, ZIP 2000, 1273; Härting, CR 1999, pp. 157; Härting/Schirmbacher, MDR 2000, 917; Kamanbro,
WM 2000, 1418; Micklitz/Reich, BB 1999, pp. 2093; Roth, JZ 2000, pp. 1013; Schmidt-Räntsch, ZBB 2000,
344; the same author, VuR 2000, pp. 427; Tonner, BB 2000, pp. 1413 and others.
737
    See Micklitz, EuZW 2001, pp. 133.
                                          Thomas Hoeren-Internet Law                                    243
An application to financial services is excluded (§ 312 b [3] BGB). However there is no rea-
son to release banking houses and insurance companies from consumer protection obligations.
Still, the release of internet business is the most understandable since this is bound to a tight
framework of consumer protection by the third Insurance Directives and the Distance Con-
tract Directive. This is not true for online-banking and further financial services. Especially in
the field of direct-banking consumers undertake quite a lot of transactions, which also repre-
sent a high economic value. It is very hard to see why consumers should be unprotected in
this area. The Commission noticed this very quickly after it originally committed itself within
the scope of an additional agreement to the Distance Contract Directive to examining just the
legal situation in general. Therefore this gap has been rightly closed by the draft directive on
consumer protection concerning financial services. Its second draft is already under discus-
sion now (see below). Surprisingly (or perhaps not so), this draft adopts the structural ele-
ments of the Directive on Distance Selling. Because of this, the information duties and with-
drawal rights are also effective within the area of the credit and insurance economy. Even if
different nuances can be found in the details, for the financial services sector the provisional
farewell from Distance Selling Law has been a lobbyistic pyrrhic-victory. Besides this it has
to be noted that the “Fernabsatzrecht” will of course be applicable where credit institutions
operate online shops.


b) Duties to supply information

The “Fernabsatzgesetz” (Distance Contracts Act) contained a lot of duties of the business
owner to supply information (§ 2 [2]).738 These needed to be supplemented by further duties
to inform according to the Electronic Commerce Directive. The “Fernabsatzgesetz” and the
EC-Directive are both guided by the consumer receiving certain information before making
the contract and during the duration of the contract. The duties to inform within the “Fernab-
satzgesetz” explicitly refer to consumer protection whereas this is not the case with the Elec-
tronic Commerce Directive. Art. 5 of the Directive instead provides a general duty to supply
information independent from the user’s status as consumer. In Art. 6 this is extended to
commercial supplies (“Commercial Communications”) without depending on the purpose of
the consumer.




738
      § 2 [1] and [2] FernAbsG-E.
                                    Thomas Hoeren-Internet Law                                244
c) Extent

From the regulations named above more than thirty facts have to be taken and made part of
the corresponding consumer information. They have now been summarized in a statutory
regulation which has been passed within the scope of the “Schuldrechtsmodernisierungsge-
setz” (Lao of Obligations Reform Act) pursuant to Art. 240 EGBGB (Introductory Act to the
Civil Code) (see § 312 c [1] No. 1 BGB). The corresponding regulation came into force on
January 15th 2002739 In detail, a provider has to supply information about


DD  &RPSDQ\VSHFLILF GDWD

      • the identity of the supplier
      • the address of the place of business
      • the e-mail address for direct contact
      • the commercial register number, name, address and other basic data of any relevant
         regulatory authorities
      • any affiliation to a professional organisation (including a reference to the valid code of
         professional conduct)
      • the turnover tax identification number


EE 3URGXFWVSHFLILF GDWD

      • substantial characteristics of the goods or services
      • (gross) price of goods or services including all taxes
      • minimum duration of the contract, if it contains a permanent or recurring obligation
      • additional delivery costs
      • sale, discount and bonus
      • the existence of games of chance


FF 'HWDLOV FRQFHUQLQJ SD\PHQW DQG GHOLYHU\

      • costs for the use of distance communications techniques
      • details about payment (e.g. cash on delivery or on invoice)
      • period of validity of the supply or price


739
   The regulation concerning BGB information obligations invented with Art. 7 of the "Schuldrechtsmodernis-
ierungsgesetz" was published on 8 Januar 2002 as a regulation dating from 2 January in the BGBl. I, 2002, 342.
                                        Thomas Hoeren-Internet Law                                          245
       • minimum term of the contract


GG ([LVWHQFH RI D ULJKW RI ZLWKGUDZDO

An example could be more or less the following wording:
"Right of withdrawal.
You are entitled to withdraw your order within a period of two weeks after receiving the de-
livery. To comply with the time-limit, it is sufficient to send goods suitable for a mail package
or, for goods not suitable for a package to send the request to take back the item to XXX. The
withdrawal has to be in written form in either case or on another durable medium. A state-
ment of reasons is not necessary. It would nevertheless be nice if you told us the reasons for
sending the goods back. The right of withdrawal does not apply to software, if the delivered
media have been unsealed or the software has been especially designed for a particular client.
You have to bear the costs of sending back the goods for less than 40 ¼ \RXUVHOI XQOHVV WKH
delivered good is not the ordered one. We bear the costs of sending back goods exceeding a
value of 40 ¼ ,I \RX KDYH DOUHDG\ XVHG WKH JRRGV ZH DUH HQWLWOHG WR GHPDQG UHPXQHUDWLRQ ,Q
addition you are obliged to reimburse the loss in value, if the goods have been damaged by
you."


These details must be clear and understandable. The question of comprehensibility is also a
question of the language of the contract, which has to be determined by the member states
according to the Recital 8 of the Directive on Distance Contracts.740 Typically the language of
the consumer‘s place of residence will be used unless another contractual language has been
agreed on.
In my opinion it is questionable whether the danger of a subliminal influence on the consumer
through a specially designed web-site can be countered by such a preliminary supplier’s duty
to inform. Here, over-regulation is a danger, which might dull consumers and could lead to
the situation where because of the sheer amount of information consumers are no longer able
to discern the truly important information.741 Here, the German idea of a judicial control could
also have been taken into consideration. The German Law offers a lot of instruments for em-
bodying unwritten preliminary contractual duties to inform via the “culpa in contrahendo”
construction. There is also the general prohibition of misleading of § 3 UWG. From this, dif-
ferent duties to inform can be inferred with respect to the specifics of the case and which can


740
      Reich, EuWZ 1997, 581, 584.
741
      Like this also the German criticism, see for example Rott, ZvglRWiss 1999, 382.
                                             Thomas Hoeren-Internet Law                      246
then be objected to ex post. But instead the Commission attempted a positivistic solution
which results in the above-mentioned ex-ante embodiment of duties to inform. But every ex-
ante consideration has the decisive disadvantage that prediction deficits concerning the neces-
sity of certain information must be accepted. Because of this, it is conspicuous that the now-
embodied duties to inform do not do justice to the complexity of electronic business. Why
should somebody who orders a music CD know the company’s commercial register number?
Completely incomprehensible is the reference to the turnover tax number. The background for
this information duty is probably Spanish Law where the turnover tax number has a central
identification function for all companies. But then it is not comprehensible why the Spanish
model should be extended to all European companies exclusively for the internet.


But this criticism is still not enough: Even harmless duties like the duty to inform about the
identity of the deliverer cause problems. Major producers are now turning to the use of clev-
erly negotiated networks to include traders in electronic orders within the area of electronic
business. When a customer selects a particular product and sends a corresponding order to the
producer he may get a message that the conclusion of the contract and the delivery will hap-
pen via a specified trader in his region. In this case customers do not find out before conclud-
ing the contract who they will actually be dealing with. Only once an order has been placed
do they find out who their contractual partner is. This sort of electronic trade (which is eco-
nomically very useful) is rendered virtually impossible by Art. 4.


d) The durable medium and the text form

The necessary information must be transmitted to the consumers in writing or on a durable
medium that must be available to themwhen fulfilling the contract (§ 312 c [2] BGB). There
is only an exception if a service is directly provided immediately by communication tech-
niques and the consumer at least knows the geographic address of the deliverer (§ 312 c [3]
BGB). The time of the contract confirmation is decisive for the beginning of the period of
withdrawal.


The term "text form" again refers to § 126 b BGB, according to which the statement has to be
in a document or another form suitable for durable reproduction in written signs. In this re-
spect the term "text form" replaces the old durable medium which could be found in the old
"Fernabsatzgesetz" (Distance Contracts Act), but repeats the term "durable" leading to the


                                   Thomas Hoeren-Internet Law                               247
difficult (and even problematic under the old provisions) question of what medium is “dura-
ble”.


DD :KDW LV D GXUDEOH PHGLXP"

Here the concept of a durable medium or data carrier causes problems. Pursuant to § 126 b
BGB the possibility of a textually unchanged reproduction of the information is required for
the expression of will. It is decisive that the data file is removed from the (possibly manipulat-
ive) access of the supplying company.742


Surely, some kind of paper information will fulfill this, which the customer will receive for
example when the goods are delivered. More difficult is the situation where the information is
sent as part of an e-mail communication. Here, one will have to focus on the question of
whether the customer actually received the e-mail and saved it on his or her computer. In this
respect it is certainly sufficient that the provider sends an e-mail with the relevant information
to the consumer, who will receive it and either download it from the server or at least will be
able to read it from there.
But the situation remains unclear when the consumer claims to have never received the e-mail
in question. It would be possible to generate an electronic acknowledgement of receipt to-
gether with the e-mail; the classic e-mail programs even provide this function. But the ac-
knowledgement of receipt might be deleted by the consumer intentionally or mistakenly, so
that the receipt will never reach the server of the deliverer. In this regard there are plenty of
possibilities for the consumer to keep the deliverer in the dark.
The situation is even more difficult concerning the information on a website. The website of a
deliverer is not a durable medium. In addition there is no transfer of information to the con-
sumer with a website, so that the consumer does not “receive” the information in the sense of
Art. 5 [1] of the Directive on Distance Contracts. Here, considerable obstacles are thrown into
the path of electronic trade by the implementation of European consumer protection. Aston-
ishingly, the member states simply refer uncritically to the text when implementing the Direc-
tive and make no suggestions for solving the durable medium problem.
Finally, it is very confusing that Art. 5 [1] of the Directive on Distance Contracts refers to the
fact that “written information” about the conditions of the right of withdrawal must be given.
By the reference to the written form, an internet-specific transmission of the information



742
      See Lorenz, NJW 2001, 2230, 2231.
                                          Thomas Hoeren-Internet Law                          248
about withdrawal is excluded. However, this regulation forms part of a wider context that is
confusing, too. Within the same set of regulations additional information duties concerning
for example customer service or guarantee or notice conditions are provided for - which were
not included at all in Art. 4. In this respect Art. 5 s. 2 is more like an alien element that does
not fit into the previous structure. But this does not alter the fact that the named regulation is
expressly geared to the written form and will in this regard cause a lot of difficulties concern-
ing the practical implementation of the Directive.
Caution has to be exercised as well when placing the information. The information duties are
only fulfilled according to the “Fernabsatzgesetz” (Distance Contracts Act) if the interested
person has to recall the information unavoidably before making the contract. A link to this
information will not be sufficient.743


EE /RRSKROHV"

The only loophole can be found in Art. 3 [3] of the coming Financial Services Directive
whereby the parties have to agree on the medium that should be used. This regulation sounds
like the question of the data carrier is optional. But this interpretation would fail to appreciate
that Art. 3 [3] still requires that a durable medium has to be used ultimately and only the
choice of the concrete (durable) medium is up to the disposition of the parties. A solution
might possibly be found in the suggestion of the European Commission of 26 July 1999 about
a Directive on Insurance Intermediaries. Pursuant to this the transmitted consumer informa-
tion has to be “in writing, including by electronic means, or other means, or any other manner
appropriate to the means of communication” (Art. 8 [1]). In an internal comment by the
Commission on this it is stated that “the information should be made in a written form, but e-
mail would also suffice”. This indicates that within Europe a particular understanding of the
term „written form” could be established. Indeed it is not necessary to place the term “writ-
ing” on a level with the traditional model of the written form and to make it “paper-near”.
Rather, the term “writing” can also refer to electronically written letters.


e) Right of withdrawal

In any case the consumer will be entitled to withdraw from the contract within two weeks
without giving reasons and without paying a civil penalty (§ 312 d [1] BGB). Regarding the
modalities of withdrawal the “Fernabsatzgesetz” (Distance Contract Act) refers to the general,


743
      OLG Frankfurt, decision of 17 April 2001 – 6 W 37/01.
                                           Thomas Hoeren-Internet Law                          249
newly embodied regulation on consumer withdrawal § 355-357 BGB). There, it is provided
that the withdrawal has to be in writing, on a medium or by returning the product and within
two weeks (§ 355 [1] s. 2 BGB). The period begins with the consumer’s receipt of the goods,
or for services at the conclusion of the contract (§ 312 d [2] BGB in deviation from § 355 [2]
BGB). If the deliverer does not fulfill the requirement of the written form the time-limit will
be extended up to six months (§ 355 [3] s. 1BGB)


Instead of the right of withdrawal, a right of return may also be contractually agreed (§ 312 d
[1] BGB). An agreement like this is very useful in the internet business. This is because when
withdrawing from the contract the consumer could otherwise at first keep and use the ordered
product. Regarding the right of return, the product has to be sent back immediately (§ 356
BGB).


The right of withdrawal can be asserted without giving reasons. Basically the consumer does
not have to bear the costs for the exercise of the right of withdrawal. As Art. 6 of the Direc-
tive on Distance Selling expressly determines, the consumer only has to bear the direct costs
for returning the product. The Directive on Distance Contracts expressly did not provide a
compensation for use to the detriment of the consumer. Such attempts are not in conformity
with the Directive and contradict the clear wording of Art. 6. The German legislator did not
keep to this. Firstly, the regulation concerning the costs for the return-shipping of the product
§ 357 [2] s. 2 BGB) is peculiar. On the intervention of the German Publishers and Booksellers
Association at the last minute a regulation was embodied by the “Bundesrat” according to
which the consumer has bear the costs for the return of the product if this has been contractu-
ally agreed and if the order is less than 40 ¼ 7KH FRQVHTXHQFH RI WKLV ZLOO EH WKDW FUDIW\ FRn-
sumers are in future going to place orders of more than 40 ¼ ,I WKH FRVWV IRU WKH WUDQVSRUW DUH
very high the customer can refuse to return the product until he or she receives an advance
payment (§ 669 BGB analogous).


But there are also regulations concerning a compensation for use (§ 357 [1] s. 1 BGB). Ac-
cording to this the utilization of the goods as well as the value of other performances have to
be remunerated following § 346 [2] No. 1 BGB. Until 1 January 2002 there had been an ex-
ception effective for the decrease in value occurring through the intended use of the goods.
But this exception was eliminated by the “Schuldrechtsmodernisierungsgesetz” (Law of Obli-
gations Reform Act). Pursuant to § 357 [3] BGB a decrease in value which occurrs through

                                   Thomas Hoeren-Internet Law                                250
the the use intended must be compensated by the consumer if he or she was informed about
this legal consequence beforehand. It is disputed whether this regulation is in conformity with
the Directive - especially regarding Art. 6 [2] and 12 [1] Distance Contracts Directive. Parts
of the literature reject this.744 But it would also be conceivable to make a reference to the fact
that the compensation for use is not to be paid “in consequence of the right of withdrawal” but
as a consequence of the utilization of the product.745


The exception provisions for the rights of withdrawal and return are very important. There are
several exception provisions for the right of withdrawal which are provided for in § 312 [4]
BGB). But these exceptions are only effective for the right of withdrawal and not for the right
of return; a reference to § 312 [4] BGB is missing in the regulation on return of § 312 d [1]
BGB). Nevertheless it has to be taken into consideration that where a right of withdrawal is
not provided by law this can’t be replaced by a right to return. The right to return may, and
only needs to, refer to goods which are subject to a right of withdrawal provided for by law.
To begin with there is no right of withdrawal regarding contracts for the delivery of goods
which have been produced according to the customer’s specifications or which have been
made with regard to the personal needs of the customer (§ 312 d [4] No. 1 BGB). For example
the order of a new car according to the specifications of the customer (for example with re-
gard to the color) is not subject to this regulation. If the request for a change is only of minor
importance the exception provision, which is to be interpreted very strictly, will not be appli-
cable.


Furthermore consumers are not going to be able to make use of the right of withdrawal for the
delivery of sealed audio or video recordings or software after unsealing them § 312 d [4] No.
3 BGB. These are quite some exceptions. The reference to the unsealing of software is reveal-
ing. Strictly speaking the regulation is correct because otherwise through the right of with-
drawal the sale of sound carriers or software would be used for making private copies and the
original products concerned would be returned after a few days. However, the reference to the
unsealing leaves you wondering. On the one hand it is superfluous particularly in so far as the
connection between unsealing and audio and video recordings is still unclear. On the other
hand this tends to legitimate a practice within the software branch which is highly dubious in
Civil Law terms. This is the so-called “shrink-wrap-agreements” which the big software com-


744
      Like this also Tonner, BB 2000, 1413, 1416.
745
      Like this Gößmann, MMR 1998, 88, 91.
                                            Thomas Hoeren-Internet Law                        251
panies want to impose on customers. They buy a software package and notice at home that the
package is sealed. There is a sticker on the protective cover informing the customer of the fact
that by destroying the protective cover you are agreeing to an additional contract with the
producer. This practice is not only dubious but also questionable with regard to Civil Law.
The customer as the buyer of the software package can tear open any and all protective covers
without being in danger of having this later interpreted by someone else as consent to a sec-
ond contract. With the reference in the Directive on Distance Contracts it is alleged that this
procedure is correct and will lead to the conclusion of effective additional contracts with the
producer. But this regulation is very much an “own-goal” for the software industry as far the
area of the download of software is concerned. If software is available on the internet a seal
will be missing. As a consequence, the regulation for sealed products (which is to be inter-
preted very strictly because of its exceptional nature) is not applicable here. The electronic
data processing industry wants to apply another exception provision according to which a
right of withdrawal will not exist for goods which are not suitable for return because of their
composition (§ 312 d [4] No. 1 BGB). But this is a provision for pizza services on the internet
and not for software where a return is not excluded per se because of its composition.


Also with a mind of its own, is the further exception effective for contracts for the delivery of
newspapers, journals and magazines § 312 d [4] No. 3 BGB). Of course it would be absurd to
be able to order magazines on the internet and then to be able to send them back after a few
days and get back the purchase price. But it is not understandable that this exception is not
effective for books. As a consequence it will be possible to order books on the internet and to
return them after some time and to get back the purchase price. With this Amazon.com will
lose its character as virtual bookstore and will mutate into an electronic lending library.


The following text is conceivable as a text to inform about withdrawal: “You can withdraw
from your order within two weeks in writing, on a durable medium (for example by e-mail),
or by returning the product. The withdrawal does not have to contain reasons. The period is
going to begin when you receive the product ordered, and we have made the necessary infor-
mation available to you in writing. To observe the time limit the timely sending of the with-
drawal is sufficient. The withdrawal has to be addressed to us at the following address: '...'.”
Concerning the distribution of software, pointing out the risks of unsealing would be advis-
able: “When buying software the above-named right of withdrawal only exists if the goods
have not been unsealed.”

                                    Thomas Hoeren-Internet Law                                252
 'LUHFWLYH RQ )LQDQFLDO 6HUYLFHV

The Directive on Distance Contracts is not effective for online-banking and the conclusion of
insurance contracts on the internet. This is a consequence of Art. 3 [1] and appendix II of the
Directive which exclude documents of value and banking services from the scope of applica-
tion of the Directive. However, a protocol explanation by the Commission has been added to
the Directive in which the Commission obligated itself to examine “how consumer protection
can be integrated into financial service policy and other regulations in this area”. This expla-
nation can be seen as a reference to the fact that the exclusion of banking services from the
Directive had already been the object of controversial discussions before the passing of the
final text. Indeed it is questionable why a consumer should not get the same protection for
these services as for other online-supplies. These doubts are all the more justified as the ob-
servance of the regulations would not have been very difficult for the credit institutions.


Based on these considerations the European Union has taken the necessary steps. Meanwhile,
the Union has planned a separate directive about consumer protection regarding financial ser-
vices on the internet; the first draft dates from 23 July 1999.746 Meanwhile, this text has been
changed twice, the last time on 12 February 2001.747 But it is still disputed whether the Direc-
tive should cause a full or minimum harmonization. The applicable law and the jurisdictional
venue are still unclear; the southern European states demand the determination of the princi-
ple of referring to the consumer’s place of residence. For this reason everyone assumes that
the directive will never be passed. But this, however, will lead to significant security gaps in
consumer protection at least for the banking area.


a) Scope of application and information model

An agreement on distance selling is every contract in which the offering, negotiating and the
conclusion occurs by way of distance communication techniques.748 If just the offer has been
placed on the internet the subsequent traditionally-concluded insurance contract will be sub-
ject to the planned directive. An essential element of the Directive will be the information
model. The consumer should be able to find information about the company and its products

746
    COM (1999) 385 final. Concerning the first version, see the draft directive on distance selling of financial
services to consumers of 14 October 1998, COM (1998), 468 final, Abl. C 385 of 11 December 1998, p. 10.
747
    Doc. 598PC0468.

                                         Thomas Hoeren-Internet Law                                         253
on the webpage of the insurer (Art. 3). If you count the planned E-Commerce Directive too,
you will have over 50 pieces of information which have to be present as compulsory specifi-
cations on the web page of the insurer. It is questionable whether the interests of the consumer
will really be served with a multitude of pieces of information because an informational inun-
dation can also be counter-productive for the consumer. In addition, some duties to inform
seem to be formulated incorrectly, for example if the specification “duration and effectiveness
of the supply and the price” is made (Art. 3 [1] lit. E). In the case of an offer without obliga-
tion or an “invitatio ad offerendum” duties like these do not make sense.


b) The “durable medium”

The reference to “durable media” also causes problems. Similar to the distance selling legisla-
tion the Draft Directive on Financial Services also requires that the conditions of the contract
and other relevant information be transmitted to the consumer “on a durable medium” (Art. 3
a [1] and [2]). But it is questionable how much durability can be required from a medium. So
it is left unclear whether the transmission via e-mail would suffice for example. An availabil-
ity of information does not seem to be sufficient because the draft expressly requires a
transmission to the consumer.


c) Right of withdrawal

The right of withdrawal embodied in Art. 4 of the Draft Directive is probably not new. Con-
sumers can withdraw from every financial service transaction made on the internet. According
to the national implementation they have a time limit of 14 – 30 days after the conclusion of
the contract and/or the handing over of the necessary information. In the insurance business
the length of the time limit might depend on the amount of the premium and the duration of
the policy. If there are different regulations within the member states the company’s place of
business should be decisive. If the consumer makes use of the right of withdrawal the supplier
will receive compensation for the financial services it has supplied up to that moment (Art. 4
[1]) unless the consumer has not been sufficiently informed about the right of withdrawal
(Art. 4 [2]). This regulation corresponds to the legal provisions for example in the field of
insurance business. However, the formulation “right of withdrawal” is problematic because it
gives the (false) impression that the dispositive right inserted here is not a right of termination



748
      See reason 12 of the Directive.
                                        Thomas Hoeren-Internet Law                             254
but a right of withdrawal in the sense of the provisions of the law regarding withdrawal of
door-to-door and similar dealings.
Besides the Directive on Financial Services the existing duties to inform, in particular in
online share trading, have to be noted. § 31 [2] of the “Wertpapierhandelsgesetz” provides for
extensive duties to provide clarification for online share trading. It is not clear how they are
supposed to be fulfilled by internet discount-brokers. Because from the outset they are only
aimed at well-informed and experienced investors, without consultancy services, in my opin-
ion obligations to give information can be fulfilled by standardized consultation before the
commencement of business. An individual consultation would contradict the basic idea of
discount-broking to which the customers agree of their own free will.749 Furthermore the un-
solved question has to be attended to, as to how far alternative trade systems like securities
trade systems are subject to the supervisory authority of stock markets and exchanges; initial
recommendations were made on this by the stock markets panel of experts in May 2001.750



 6XPPDU\ 2EOLJDWLRQV RI PHUFKDQWV LQ HFRQWUDFWLQJ

In summary, the duties of the offeror in e-business with consumers (B2C) can described as
follows:


The offeror has to provide for adequate, effective and accessible means which can be used by
the consumers to identify and correct input data errors in their orders. The offeror has to in-
form the customer about the particular steps leading to a contract conclusion, before ordering.


The provider has to inform the customer whether the contract text will be stored after conclu-
sion and whether it will be accessible for the customer.


The offeror has to indicate to the client which languages are available for contract conclusion.


The offeror has to confirm electronically an incoming order without delay.




749
   Similar also Balzer, DB 1997, 2311, 2315.
750
   Recommendations by the stock market panel of experts concerning the regulation of alternative trade systems,
Frankfurt 2001, available under http://www.finanzplatz.de. See also the Special Study of the Securities and Ex-
change Commission on „Electronic Communication Network and After-Hours Trading“of June 2000;
http://www.sec.gov./news/studies/ecnafter.htm.
                                         Thomas Hoeren-Internet Law                                         255
The offeror has to inform the customer (this exceptionally even where the customer is not a
consumer) about the basic key data of the enterprise (address, representative authorized by
law, phone, fax, mail, existing supervising authority, number in the commercial register, pur-
chase tax number and applicable codes of professional conduct).


The offeror has to inform the customer about essential features of the goods or service includ-
ing all payment modalities.


The offeror has to indicate the existence of a right of withdrawal to the customer and explain
how to exercise this right.




                                   Thomas Hoeren-Internet Law                              256
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Special personal rights should be considered in advance, e.g. the Artistic Copyright Act (Kun-
sturhebergesetz – KUG) and the rights in one’s own image (§§ 22 seqq. KUG). The rights in
one’s image also apply to company, whose picture therefore can only be published on the
internet if they give their consent. A publishing agreement given for the purpose of staff ad-
ministration does not automatically extend to internet publications. Two limits exist: On the
one hand, there is a temporal limit: Following §31 [4] UrhG, an agreement given before 1995
cannot extend to internet publication. On the other hand, the copyright principle of assign-
ment of purposes (=ZHFNEHUWUDJXQJVJUXQGVDW]) (§31 [5] UrhG) is to be applied accordingly
here. Therefore, an agreement for the purpose of staff administration does not legitimate use
on the internet.751
Concerning the right to one’s own image, the right of revocation at any time must be noted. If
the person who is represented in the image declares such a revocation, an analogous applica-
tion of §42 [3] UrhG does not seem possible - therefore there is no right to adequate compen-
sation. Rather there remains only a claim for reimbursement through analogous application of
§ 122 BGB.752


751
    See the decision of the KG, 24th of July 2001, AfP 2001, 406, where mere knowledge of the potential use is
not enough to assume an agreement according to the KUG.
752
    AG (Local Court) Charlottenburg, ruling of February 21 2002, AfP 2002, 172
                                          Thomas Hoeren-Internet Law                                      257
Furthermore, the general personal right according to §823 [1] BGB needs to be taken into
account, this is infringed for example when debtors are publically denounced on the inter-
net.753


Liability for compliance with the regulations of the Artistic Copyright Act also extends to the
provider of internet forums, as the OLG Cologne ruled in the case Steffi Graf v. MSN. In the
middle of last year, a user of the MSN service generated fake pornographic pictures of the
German tennis star and offered them on his MSN.de community homepage. In December
2001, the LG Cologne had already ruled in favor of Graf, who had sued against the distribu-
tion of the pictures. Now the OLG Cologne has rejected Microsoft’s appeal against the in-
terim injunction, according to which the software group’s German subsidiary has to prevent
the distribution of the manipulated nude pictures.754



,, 3UHYLRXV KLVWRU\ RI GDWD SURWHFWLRQ ODZ

Data protection law refers to a right of control concerning data, but is not completely de-
scribed by this. Data protection is situated on the joint between the access rights of third par-
ties and the exclusive right of the affected person, who wants to rely on the “right to be left
alone”, privacy or more specifically, the right to informational self-determination. In this re-
spect, data protection law includes the protection of the confidentiality of correspondence and
telecommunication, as well as the special personal rights to one’s image, text and sound. Data
protection law is situated historically at the beginning of information law. It was only later
that copyright law and other sub-areas were added.



 3UHYLRXV KLVWRU\ XQWLO WKH %'6* 

The birth of German data protection law occured in 1970. In that year Hessen was the state
world-wide to enact a data protection act.755 This act was influenced by the American debate
concerning the “right to privacy”756 as well as by the “Mikrozensus” ruling of the Federal
Constitutional Court of July 16, 1979,757 in which the following is stated:


753
      OLG Rostock, finding of the 7th of March 2001, ZIP 2001, 796. v critical comment by Paulus, EwiR
18/2001, p.863.
754
    taken from: http://www.ix.de/newsticker/data/jk-28.05.02-002
755
    GVBl I, 625.
756
    On the evolution of data protection in the USA see Tinnefeld/Ehmann, I. part, 2.1, p. 36.
757
    1. BvL 19/63 = BVerfGE 27, 1.
                                            Thomas Hoeren-Internet Law                             258
         „The state must not by any measure – even by law – violate the human dignity or in-
         terfere in any other way beyond the barriers of Art. 2 [1] GG (Grundgesetz, German
         Constitutional Law) with the freedom of any person in its core meaning. It would be
         incompatible with human dignity if the state could grant itself the right to compulso-
         rily register and index a human being’s whole personality and to treat him or her like a
         thing that is amenable to stocktaking in any regard, even if it is only in an anonymous
         data collection.” 758


In 1970 the federal government announced that the preparatory work for a draft of a Federal
Data Protection Act had begun.759 After several drafts and intense discussions in both cham-
bers of the national parliament these preparations led to the “Act for the protection against
misuse of person-related data in the course of data processing of January 27th, 1977 – Federal
Data Protection Act (Bundesdatenschutzgesetz – BDSG)”.760 This act came into effect on the
first of January 1978.


On the basis of the BDSG, all federal states enacted data protection acts by 1981;761 further-
more, data protection representatives were appointed at federal and state level as well as in
private enterprises, and the designated supervisory authorities were set up.
Data protection law then changed fundamentally because of the “population census” – ruling
by the Federal Constitutional Court on December 15, 1983.762 The court set up the following
requirements for all statutory regulations on data protection:


•     Every citizen has the “cardinal right to decide for himself on the surrender and use of his
      personal data.” This right results from Article 2 I combined with Article 1 I GG and was
      called the “right of informational self determination” by the Federal Constitutional Court.
•     “Under the conditions of automated data processing there is no longer such a thing as a
      'trivial' piece of data”: Each person-related piece of data is protected by the constitution,
      regardless of whether it contains sensitive information or not.


758
    Similarly the later decision on divorce by the Fed. Const. Ct., 15.1.1970 - 1 BvR 13/68 = BVerfGE 27, 344 =
NJW 1970, 555 as well as the Soraya-decision of the Federal Supreme Court (BGH), NJW 1865, 685 and the
Fed. Const. Court (BVerfG), BVErfGE 34, 269.
759
    Bundestags-Drucksache VI/1223 of 5.10.1970.
760
    BGBl I, 201.
761
    About the federal structure of the German data protection law v. Tinnefeld/Ehmann, I. Teil, 4.3, p. 93
762
    BVerfGE 65, 1 = NJW 1984, 419.
                                           Thomas Hoeren-Internet Law                                       259
•      The citizens must know, “who knows what, when and on what occasion about them.”
       Therefore far-reaching duties of explanation exist for data-processing institutions. Simul-
       taneously, the principle of the primacy of self-disclosure is to be applied. If possible, the
       citizen himself is to be asked for disclosure of his data before others are asked for infor-
       mation about him.


•      Restrictions of the right of informational self-determination need an explicit legal basis.
       This basis has to define the essential conditions for the permissibility of the data collection
       and data processing as precisely as possible. Furthermore, duties concerning the informa-
       tion about processing, disclosure and erasure as well as the participation of independent
       data protection representatives must be provided.


•      The collection and processing of person-related data are strictly bound to specific pur-
       poses: Data can be collected and saved only for a certain purpose; each collection of per-
       son-related data “on stock for undefined purposes” is illegal. The data can be processed
       only in the framework of the purpose they have been collected for (so called basic princi-
       ple of fixation to one purpose - Zweckbindungsgrundsatz); any use of the data not com-
       plying with this purpose is illegal.


On the basis of these requirements set up by the Constitutional Court, the legislator was
forced to make fundamental changes to the BDSG. On May 31, 1990, the Bundestag enacted
                                                                               763
the “Act for the development of data processing and data protection”                 and send it to the
Bundesrat. The Bundesrat in its turn rejected the act and called on the conciliation commit-
tee.764 The amended act then became effective June 1, 1991 in a compromise version765
drafted in the conciliation committee.



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%'6*

As well as the national legislators, the EU also had to become active in this area, at least to
answer the questions concerning cross-border data-exchange within the EU. As early as 1976,

763
      BT-DrS 11/4306.
764
      BR-DrS 379/90.

                                       Thomas Hoeren-Internet Law                                  260
the European Parliament had passed several decisions766 in which the EU Commission was
asked to draft an EU data protection directive. The EU-Commission however took its time
with this directive. It was not until July 18, 1990 that a package of measures concerning ques-
tions of data protection was set up.767 This package comprised the proposal for a directive on
the protection of individuals concerning the processing of personal data and the proposal for a
directive on the protection of personal data in the telecommunications sector. In October 1995
the data protection directive was passed.768 In December 1997 the Telecommunications data
protection directive followed.769 At present there are discussions in Brussels on uniting both
directives in one single text.


The EU data protection directive was supposed to have been implemented on October 24,
1998. The history of the amendment of the BDSG regarding the EU data protection directive
is complicated. Already in July 1997 a first referee’s proposal was published.770 The discus-
sion about the proposal from 1997 fell victim to the political changes in Berlin. The new
SPD/Green Party coalition took a longer timeout before publishing their own proposal. A
main point of criticism was always the question of a better protection of the press, because the
press feared being impeded in the collection of information about informants and celebrities
by a too strict data protection.
The German legislator then took its time with implementation. After approval by the Bundes-
rat on May 11, 2001 and signing by the President of the Federal Republic on May 18, 2001
the new Federal Data Protection Act was published on May 22, 2001.771 It therefore came into
force on May 23, 2001.772



,,, 4XHVWLRQV RI FRQIOLFW RI ODZV

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765
    BGBl I, 2954.
766
    ABl Nr. C 1000 of 3.5.1976, p. 27; also ABl. Nr. C 140 of 5.6.1979, p. 34; ABl Nr. C 87 of 5.4.1982, p. 39.
767
    KOM (90) 314 final = Abl C 277/12 of 5.11.1990; printed in German version as BR-DrS 690/90
768
    Directive 95/46/EC of the European Parliament and the Council of 24 October 1995 on the protection of
individuals with regard to the processing of personal data and on the free movement of such data, Abl. EG L of
23.11.1995, 31. See also Brühann/Zerdickm, CR 1996, 429; Simitis, NJW 1997, 281; Weber, CR 1995, 297
769
    Directive 97/66/EC of the European Parliament and the Council of 15 December 1997 concerning the proc-
essing of personal data and the protection of privacy in the telecommunications sector; CR 4/1998
770
    http://www.dud.de/dud/documents/bdsg97ct.htm
771
    Bundesdatenschutzgesetz (BDSG), BGBl 2001 part I No. 23, p. 904seqq.
772
    See Gola/Klug, NJW 2001, 3747 seqq.; Schierbaum, PersR 2001, 275; Franzen, DB 2001, 1867.
                                          Thomas Hoeren-Internet Law                                          261
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QHW %DGHQ%DGHQ   +DUDOG .RFK 5HFKWVYHUHLQKHLWOLFKXQJ XQG .ROOLVLRQVUHFKW LQ
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'DWHQYHUNHKU LQ GHU .UHGLWZLUWVFKDIW LQ :0   3DOP 'LH hEHUPLWWOXQJ SHUVRQHQ
EH]RJHQHU 'DWHQ LQ GDV $XVODQG LQ &5  

Regarding the progressive internationalization of data processing especially in the online-
area, the question arises as to when German data protection law applies. It is certain that con-
tractual clauses on the applicable law do not affect the applicability of data protection law.773
From the perspective of the German doctrines on applicable law, the headquarters of the proc-
essing office is generally decisive. German law is applicable if the headquarters of the proc-
essing office is located in Germany.774


This point of view will have to be changed with the implementation of the European data pro-
tection directive. In accordance with Article 4 [1] lit. a), c), the point of contact is the location
of the place of business of the controller who is responsible for the data processing. Accord-
ing to this so-called principle of territoriality (Territorialitätsgrundsatz) the data protection
provisions of the country where the data processing office has its headquarters are relevant.
The definition of “controller” describes the institution, that


-     processes personal data or orders its processing (e.g. by commissioning someone else to
      process the data) and
-     decides about the purpose and aim of the data processing, the data used, and procedure
      and the addressees of the transmission (Article 2 lit. d). This definition makes it hard to
      ascertain the controller. The BDSG already makes it difficult to draw a clear dividing line
      between a commission to process data and a delegation of functions (e.g. outsourcing).
      According to the directive it is moreover doubtful whether a person who only decides
      about the purpose and aim of the data processing can be seen as responsible, when every-
      thing else is left up to the processing office.




773
   See art. 27, 34 EGBGB
774
   Ellger, Datenschutz, 604; differently Moritz/Winkler, NJW-CoR 1997, 43, 45, who want to subsume “every
data process that takes place within the Federal Republic of Germany” under the BDSG.
                                           Thomas Hoeren-Internet Law                                 262
The supplemental application of the principle of the location of the equipment remains prob-
lematic. According to art. 4 lit. c) the directive shall also be applied if the controller is not
established in Community territory, as long as he uses automated or non-automated equip-
ment situated in the territory of a Member State for his data processing – unless such equip-
ment is used only for purposes of transit. Here the vague term “equipment” turns up. The ex-
planations refer illustratively to terminals and questionnaires. However, in this case the con-
troller is obliged to designate a representative established in the territory of a Member State
(Art. 4 [2])


As a result the German data protection law must be applied if


-   a company established in Germany has data processed in the USA
-   a company established in the USA processes data via German terminals.


Conversely the law of an extra-European country is applied if


-   a company is established outside the EU and only processes data there
-   an American sales manager sits with his laptop in the transit area of the Frankfurt airport
    (“transit”)



,9 %DVLF VWUXFWXUH RI GDWD SURWHFWLRQ ODZ

At first it is necessary to draw a dividing line between the BDSG and the Teledienstedaten-
schutzgesetz (TDDSG - Tele-services Data Protection Act) regarding their applicability to
the e-commerce sector. The TDDSG comprises only data that is used in carrying out a tele-
service. From now on the new TDDSG is not applicable to processing the data of legal per-
sons (§1 [1] TDDSG). Neither is it applicable to data processing under employment or work
contracts, in so far as the use of the tele-service takes place solely for occupational purposes.
In addition, communication of or between companies is exempted from the application of the
law as far as the use of the tele-service only takes place in order to control work or business
processes.
Whether the BDSG or the TDDSG has to be applied depends on the different levels of use of
the internet. The invitation to make an offer is a tele-service itself, the handling of the corre-
sponding data belongs to the area of the TDDSG. Therefore the resellers of banner ads are

                                   Thomas Hoeren-Internet Law                                 263
subject to the TDDSG, unless the advertising contributes in exceptional circumstances to the
shaping of public opinion (then the MDStV, Media Service State Treaty, is applicable). If the
user actually makes an offer, data is again exchanged. These data however do not deal with
questions of the duration of the offer or the control of the services called up. Instead this is a
matter of information that is necessary for the contract itself. The use of and inquiry after this
personal data by companies which offer tele-services have to follow the regulations of the
BDSG.


Besides this, the BDSG applies without restriction in the private sector only to:


-      personal data (§3 [1] BDSG)
-      of natural persons (§3 [1] BDSG)
-      that are used or processed by data processing systems (§1 [2] No. 3 BDSG)



 3HUVRQDO GDWD † >@ %'6*

Only “single details on personal or factual circumstances of a determined or determinable
natural person” (§3 [1]) are protected by the BDSG. The legal definition contains two facts: it
limits data protection to natural persons only. Therefore only pieces of information on indi-
viduals are protected. In contrast to the provisions of other European countries (Luxemburg,
Denmark, Austria) the BDSG does not cover data on legal persons, such as those of a regis-
tered association, a limited company, a co-operative society or a incorporated company. Even
sensitive data on companies (e.g. staff statistics, financial situation, technical know-how) is
not protected by the BDSG, but only possibly by §17 UWG (Act on Unfair Competition) as a
trade secret or by §823 [1] BGB (right to a settled and pursued industrial undertaking). One
exception can be found in social law: according to §35 [4] SGB I (Social Law Act) business
and trade secrets are equal to personal data and enjoy the complete protection of the “social
secret” (6R]LDOJHKHLPQLV).
The situation is different, however, if business data (not protected by BDSG) is brought into
relation to individual members of the board of directors, the management or individual asso-
ciates.775 In this case the BDSG is applicable. Furthermore - according to the opinion of the




775
      see BGH, 17.12.1985, NJW 1986, 2505
                                        Thomas Hoeren-Internet Law                            264
BGH - the unauthorized transmission of business data shall infringe the “general personal
right of a company” stated by §823 [1]BGB.776


Secondly the BDSG protects all information that reveals details of the people concerned, in-
cluding
-     first and surname
-     address
-     citizenship and
-     occupation


In general this does not depend on how sensitive and how much in need of protection a single
piece of data is. In this respect the BDSG has to be interpreted in accordance with the popula-
tion census decision, which states that there is no such thing as a trivial piece of data in the
age of electronic data processing.777 Therefore a picture of a building in an address database
on CD-ROM has to be classified as personal data if the picture of the building is connected to
the name and address of the single inhabitants, so that conclusions can be drawn on the hous-
ing conditions of the persons affected.778


It is contentious whether evaluations and judgments are covered by the term “personal data”.
With respect to the old BDSG, already the view was taken that evaluations and judgments as
mere “assumptions” needed to be differentiated from “information” and therefore were not
covered by the protection of the law.779 Considering the great importance that evaluations
and personal judgments have for individuals, e.g. in staff files, one has to agree with the pre-
vailing opinion, according to which value judgments enjoy the protection of the data protec-
tion acts.780




776
    see BGH, 8.2.1994, NJW 1994, 1281 = CR 1994, 396; differing for the transmission of business data of a Ltd.
OLG Karlsruhe, 2.10.1986, GmbHR 1998, 62
777
    For the special protection of sensitive data see above remarks on the presumption of § 28 II No. 1b BDSG
and on the EU data protection directive
778
    Concerning this see LG Waldshut-Tiengen, decision of 28.10.1999, DuD 2000, 106 (109), which leaves the
question on the reference of the picture to the inhabitants open, but assumes the legitimacy of the data collection
(as far as pictures of buildings are concerned) “in the case that the BDSG is applicable” according to § 29 I 1 No.
2 BDSG.
779
    Schedl, Leitfaden, 19; compare Hergenhahn, DuD 1977, 25.
780
    For the old BDSG see Hümmerich/Kniffka, NJW 79, 1184; Eberle, DÖV 77, 317; Gallwas § 2 No. 5; for the
current BDSG see Simitis/Dammann § 3 No. 12; Auernhammer § 2 No. 5; Gola/Schomerus, § 3, comment 2.4.
                                            Thomas Hoeren-Internet Law                                          265
More controversial is the question whether forecast and planning data are protected by the
BDSG. In general it is decisive whether data is concerned that deals not only with upcoming
but also with the already present circumstances of an individual.781 The human resources
planning of an employer on the career path of an employee is founded on the evaluation of
the present professional qualification, for example. Such planning data is regularly based on
the analysis of past and present circumstances and can imply a relevant impact on the present
status of an employee. Therefore one has to assume that at least planning data that can be re-
individualized has to be subsumed under the BDSG if those data result in concrete conse-
quences for the employee.782


Also relevant is the question to what extent anonymous or summarized (aggregated) data and
collections of data are subject to the BDSG. According to the prevailing opinion collective
data of a group of persons, aggregated or anonymized data are not individual data as defined
by §3 [1] BDSG, if it is impossible to draw conclusions on individuals.783 However, a con-
nection to individuals is established if an individual is characterized as a member of a group
of persons about which particular information is given, with the result that the data has a di-
rect effect on an individual.784 In the area of e-commerce, this is relevant for example for user
profiles, if an internet user can be classified within a distinct group of buyers because of sta-
tistical findings.785 According to the legal definition of anonymizing in §3 [7] BDSG it is de-
cisive whether the data “can no longer be assigned to a determined or determinable individ-
ual or if it can be assigned only with an unreasonably high amount of time, costs and work
capacity”. Therefore every case must be examined using a risk analysis to determine what
economic and technical effort is necessary to restore a connection to individual persons.786 In
general however, setting up anonymous profiles is permitted, because data protection law is
not applicable in this case. The same is true for pseudonyms, as long as assignment lists in
the possession of the data processor do not allow the uncovering of the identity of the user
behind the pseudonym.




781
    Gola/Schomerus, section 3, comment 2.7; Bergmann/Möhrle/Herb, section 3 No. 20,
782
    see also Gola/Schomerus, section 3, comment 2.7; restricting Bergmann/Möhrle/herb, section 3 No. 20, that
exclude “abstract“ planning data from the field of application of the BDSG, because they “regularly do not con-
tain single data“.
783
    Compare Gola/Schomerus, section 3, comment 2.2; Auernhammer, BDGS, section 3, No. 4. BFH NJW 1994,
2246; Tinnefeld/Ehmann, Part II, 3.1.1, p. 186
784
    comapre BAG, RDV 1986, 138; BAG RDV 1995, 29.
785
    See also the comments on tele-service data protection (TDDSG) mentioned below
786
    Gola/Schomerus, section 3 comment 14.2.
                                          Thomas Hoeren-Internet Law                                        266
 3URWHFWHG SURFHVVLQJ SKDVHV † >@ WR  %'6*

The old BDSG recognised four phases of data processing: storage (§2 [2] s. 1 in connection
with §9 BDSG), alteration (§2 [2] s. 3 in connection with §9 BDSG), transmission (§2 [2] no.
2 in connection with §§ 10seq. BDSG) and deletion (§2 [2] No. 4 in connection with §14 [3]
BDSG).
This inflexible definition of data processing phases has turned out to be questionable and arti-
ficial, particularly since as a result, the phase of data collection was taken out of the applica-
bility of the BDSG. The current BDSG therefore has an enlarged extent of protection – ac-
cording to the guidelines of the population census decision: the law does not just cover the
actual data processing but also the collection and use of data.


a) Data collection, §3 [4] BDSG787

According to §1 [2] the BDSG is also applicable to the collection of personal data. The term
“collection” is defined in §3 [4] BDSG as “the procurement of data about the affected per-
son”. In addition, §27 BDSG is relevant. According to this provision, the BDSG is only ap-
plicable in the private sector if the data are collected using data processing devices or in or
out of files. Therefore the BDSG comprises the collection of data if the data is subsequently
stored electronically or in files. The mere collection as such (i.e. without a subsequent proc-
essing) is not subject to the BDSG.788
A collection is assumed in the case of e.g.
-     questionnaires (for instance staff questionnaires789 or customer and consumer question-
      naires790) medical surveys (blood tests) and
-     surveillance of individuals with the help of cameras


The BDSG contains detailed provisions on the legitimacy of data collection for the public
sector (§11); considering the private sector the act confines itself in §28 [1] s. 2 to the terse
reference, that data must be collected “in good faith and in a lawful manner”.




787
    Concerning this see Tinnefeld, Persönlichkeitsrecht und Modalitäten der Datenerhebung im Bundesdaten-
schutzgesetz, NJW 1993, 1117; especially for the collection of staff data, Däubler, CR 1994, 101.
788
    Therefore inconsistent Bergmann/Möhrle/Herb, section 1 No. 41 and section 3 No. 57
789
    see Däubler, Erhebung von Arbeitnehmerdaten, CR 1994, 101.
790
    See Breinlinger, Datenschutzrechtliche Probleme bei Kunden- und Verbraucherbefragungen, RDV 1997, 247.
                                          Thomas Hoeren-Internet Law                                   267
b) Data processing

Besides the area of data collection the BDSG comprises also the processing of personal data.
This contains according to §3 [4] the


-       storage (no.
-       alteration (no. 2)
-       transmission (no. 3)
-       blocking (n. 4)
-       and deleting (no. 5) of personal data.


DD 6WRUDJH † >@ QR  %'6*

Storage as defined by the BDSG means the registration, integration or keeping of data on
data media for purposes of subsequent use. Because of the fact that according to the new
BDSG it is no longer necessary that data be stored in files, records on unformatted data carri-
ers like paper are storage as defined by the BDSG.


EE $OWHUDWLRQ † >@ QR  %'6

The BDSG defines “alteration” as the reshaping of content of stored data. Thus it refers to the
modification of the informational content and the expressiveness of a concrete data. Mere
formal proceedings, like the comparison of data, therefore cannot be subsumed under §3 [4]
no. 2 BDSG.
This legal definition is problematic because the alteration of data always implies deletion of
old and storage of new data. Therefore it has to be assumed that the provisions on the storage
and deletion of data are seen as a lex specialis. Since the legal preconditions for storage and
change are identical, the precise demarcation plays only a minor part in practice.


The alteration may also be the loss of a former context that was based on a specific connec-
tion and the adoption of a new modified informational value, e.g. if data is taken out of its
previous context or if a new connection is established (e.g. transfer of data from a debtor in-
dex into a staff file).791
§3 [4] no. 2 BDSG is, however, not applicable if only a change of external circumstances of
the data processing takes place, e.g. if the access to data occurs through persons who do not

791
      see Gole/Schomerus, section 3 comment 9; Bergmann/Möhrle/Herb, section 3 no. 78
                                         Thomas Hoeren-Internet Law                        268
belong to a social environment that was defined according to specific functional criteria. Only
effects on the datum itself but not the change of content of a datum through changed previous
knowledge fall under the term “alteration of data” of §3 [4] no. 2 BDSG.


FF 7UDQVPLVVLRQ † >@ QR  %'6*

“Transmission” in the BDSG means the announcement of data through the responsible office
(§3 [7]) to third parties (§3 [8]) through passing on, inspection or recall of data.


The definition of transmission comprises both the transmission of personal data to third par-
ties, for instance with the (written or verbal) granting of information or the transmission via
remote data transmission, and the inspection or recall of data through third parties. In this re-
gard the new BDSG lapses back behind the old BDSG, which classified the making available
of data as a transmission.


The term “transmission” causes problems because an announcement of data to a third party
must be made. But it is questionable who can be classified as a “third party”. §3 [8] s. 2
BDSG states that a third party is “every person outside the responsible office”; the term “re-
sponsible office” is defined in §3 [7] BDSG as “every person or office, that collects, proc-
esses or uses data for itself or has it done by others on commission”. The responsible person
him- or herself and the persons or offices that process or use data on behalf of the storing of-
fice within the EU/EEA are not seen as a third party (§3 [8] s. 3 BDSG).
The relationship between the responsible office and the third party is defined according to the
so-called functional term of an office.792 So third parties are


-       all authorities, offices and individuals outside the respective authority or the respective
        company and
-       every organizational part within an authority or a company whose function is not directly
        connected with the concrete data processing.793 Therefore apparently in-house messages
        are also data transmissions if these messages exceed the prescribed allocation of duties
        and functions.




792
      see BverfGE, NJW 1988, 959, 961
793
      see on this also Büser, Rechtliche Probleme der Datenübermittlung beim Franchising, BB 1997, 213
                                             Thomas Hoeren-Internet Law                                  269
Concretely, there is no data transmission because of the lack of an announcement to a third
party in the case of
-   a data transmission within the storing office
-   an announcement of data to the concerned person (e.g. through a possible demand for
    information according to §§ 1, 24 BDSG) and
-   an exchange of data between the principal and agent (e.g. in a data processing center), if
    the agent has its domicile in the EU or EEA.


In contrast to this a data transmission has to be assumed in the case of
-   a data exchange between two different offices and
-   every data transmission to countries outside the EU/EEA


GG %ORFNLQJ † >@ QR  %'6*

„Blocking“ of personal data is the qualification of data for the purpose of restricting the sub-
sequent processing or use. This processing phase aims with the help of programs to make ac-
cess to parts of data records or to the whole record of automated files impossible. In contrast
to this, blocking is not usually relevant for conventional files; there it is only authorized under
even stricter requirements (§20 [5] BDSG).


HH 'HOHWLRQ † >@ QR  %'6*

For the BDSG “deletion” is to make data unrecognizable, which means the irretrievable era-
sure of data, regardless of the procedure used. A deletion can occur through
-   rubbing out
-   overwriting
-   blackening
-   physical destruction of the data carrier (including all backup copies)


The following acts are not sufficient:
-   the mere note “deleted” and
-   putting data into archives and outsourcing them.




                                    Thomas Hoeren-Internet Law                                 270
9 %DVLV RI DXWKRUL]DWLRQ

In general any processing of personal data is prohibited. As an exception processing is permit-
ted if
-     the affected person has consented
-     a collective agreement or union contract permits processing
-     a statutory provision authorizes processing.



 &RQVHQW

According to §4 [1] BDSG the processing and use of personal data is permitted by law if the
affected person has consented. According to §4 a [1] BDSG, the consent is only effective if
the purpose of the collection, processing or use and the consequences of withholding the con-
sent have been pointed out on request to the affected person in advance (§4 a [1], s. 2 BDSG).
In addition, the consent normally has to be in written form (§4 a [1], s. 3 BDSG). Difficulties
exist concerning the consent in the general terms and conditions of trade, since the Federal
Supreme Court (Bundesgerichtshof, BGH) ruled a consent in telephone advertising within the
general terms and conditions to be invalid794. Telephone advertising was held to be a strong
intrusion upon privacy. Such advertisement in the private sector was therefore considered to
be an infringement of ERQRV PRUHV (offence against good morals). The consumer’s consent
was thus only valid if the consumer consents explicitly. The participant has to be informed
clearly about type and extent of storage and the envisaged transfer of data. Also the consumer
has to be given the opportunity to limit selected forms of data processing. Since this was not
the case when using „payback“-procedures, the Regional Court of Munich found the clauses
by this supplier to be invalid795.
If the clause is too indefinite, it fails to have legal effect as the basis of authorization. In addi-
tion, according to §307 [1], [2] no. 1 BGB it is void due to the deviation from the basic prin-
ciples of the BDSG796. It is controversial whether the explicit consent to data processing is
also necessary if data is collected on a voluntary basis.797 A point in favor of the necessity is
the clear wording regarding this in §4a [1] BDSG798.


794
    verdict of March 16th 1999 – XI ZR 76/98, NJW 1999, 1864 = RDV 1999, 163.
795
    LG München, February 1st 2001 – 12 O 12009/00; v MMR 4/2001, Aktuell XVII.
796
    Regional Court (LG) Halle, CR 1998, 85.
797
    Pro consent Regional Court (LG) Stuttgart, 13.8.1998, RDV 1998, 262; contra consent Regional Court (LG)
Darmstadt, 24.9.1998, RDV 1999, 28.
798
    See Regional Court (LG) Stuttgart, 13.8.1998, RDV 1998, 262.
                                          Thomas Hoeren-Internet Law                                    271
It has also be taken into account though, that in cases of special circumstances the consent
only has to be in written form if there are no special circumstances warranting any other form
(§4 a [1] s. 3 BDSG). If data is collected with explicit reference to the voluntary character of
participation and a detailed description of the application, for instance within the framework
of a customer survey, the explicit consent to the subsequent processing can be dispensed with
in particular cases, because voluntary participation includes an (implied) consent799. The con-
sent in written form provided for by §4 a [1] BDSG can not be carried out online. It is doubt-
ful whether „special circumstances“ can be assumed because of the regular use of the internet,
thereby allowing a different form. In fact, caselaw has assumed this because of special ur-
gency or in certain situations on the telephone, but a generalization to all internet situations
would be contrary to the provision’s character as an exception. If businesses use the internet
to offer their products or to conclude contracts online though, they also act partly as a pro-
vider for tele-services within the meaning of §2 TDG (see above). §3 [1] TDDSG also pro-
vides a prohibition referring to personal data, with a reservation on the granting of permission.
Here the legislator decided to consider electronic consent as sufficient. Nevertheless a simple
mouse-click is not sufficient. Instead a conscious action taken by the consumer has to be en-
sured by the mode of input. In addition the logging and retrievability need to be guaranteed.
Also the possibility of revoking the consent has to be pointed out to the customer, unless this
has been excluded by a valid waiver.


One example for an unobjectionable declaration of consent referring to data protection law
can be found in appendix 6 of the „criteria for the internet presence of insurance companies in
accordance with data protection“ by the GDV (general office of German insurance compa-
nies). For example the following wording could be used: „We would like to inform you that
your data collected in the course of the order is used for the accomplishment and handling of
the order. Moreover we would like to use your name, address and e-mail to inform you about
similar products of interest to you. This is subject to your agreement, which you can give by
clicking the yes-button. This consent is not necessary for the accomplishment of your order;
you may decide freely whether you want to give your consent to further forwarding of infor-
mation. Should you not want to receive this information in future we kindly ask you to send a
short e-mail to XXX”.




                                   Thomas Hoeren-Internet Law                                272
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According to the Federal Labor Court (BAG) the processing of data is also legal provided that
it is based upon a consent in a collective agreement or union contract800. The Federal Labor
Court assumes that collective agreements and union contracts are “other legal provisions“
within the meaning of §4 [1] BDSG. The processing of personal data on the basis of such a
collective legal agreement is justified according to the Federal Labor Court even if the agree-
ment is at the expense of the person concerned801. However this provision does not apply to
the internet sector for lack of explicit statutory regulation (§89 [3] s. 3 TKG). Therefore the
workers council does not have the power to regulate specific questions of data protection re-
ferring to the internet. Nevertheless, the introduction of the internet remains subject to the
right of co-determination in terms of the law concerning employees’ representation and co-
determination in businesses and industry. By means of log-in files during the use of the www
and by control of e-mails, the surveillance of the behavior and performance of employees is
possible. In this respect the statutory definition of an offence in §87 [1] no. 6 BetrVG (Act on

799
      Regional Court (LG) Darmstadt, 24.9.1998, RDV 1999, 28.
800
      BAG, 27.5.1986, NJW 1987, 674.



                                         Thomas Hoeren-Internet Law                         273
Employees’ Representation and Co-Determination) has to be applied802. The same is true for
the co-determination of the staff council as defined by §75 [3] No. 17 BetrVG803. Thus the
Higher Administrative Court (OVG) Münster decided in January 2000 that the provision of
consultation hour schedules and further personal data on personal www-pages within a uni-
versity net and the www-sector is subject to co-determination according to §72 [3] No. 1
LPVG (State Staff Representation Act)804.


Whether or not employees may surf the internet during their working time for private pur-
poses depends on the standards set by the employer. If the employer does not allow such surf-
ing, the inadmissibility can be assumed because of the transmission costs and loss of work
capacity linked to the activity805. An employee can be given a warning notice regarding this;
in case of repeated warnings even an extraordinary termination of the work contract is possi-
ble. The employer’s consent to private surfing can be explicit or implied. An implied consent
is assumed if private phone calls are allowed to a similar extent806 or the employer has not
opjected to surfing for a longer period of time807. The employer’s consent does not legitimize
improper use like excessive surfing or download of pornographic material808. The copying of
business data onto a private data carrier809 as well as the improper use of someone else’s pass-
word is always forbidden.810


It should be taken into account that the internet holds enormous surveillance potential for the
employer. Any activity of an employee can be logged afterwards. Also an a priori control is
possible, e.g. by firewalls. For the surveillance of e-mail traffic involving the employee the
law concerning employees’ representation and co-determination has to be observed as well as
the secrecy of telecommunications. §85 TKG (Telecommunications Act) which lays down the


801
     Critical: Rademacher/Latendorf, Betriebsvereinbarungen als andere Rechtsvorschriften, CR 1989, 1105;
Wohlgemuth, Datenschutz für Arbeitnehmer, No. 613; Walz in Simitis a.o., section 4 No. 16; Fitting a.o.,
BetrVG, section 83, No. 28.
802
    likewise Däubler, Internet und Arbeitsrecht, Frankfurt 2001, No. 183; Raffler/Helfrich, NZA 1997, 862.
803
    see Schneider, PersR 1991, 129.
804
    Court order of 20.1.2000 – 1 A 2759/98 PVL.
805
    Däubler, Internet und Arbeitsrecht, Frankfurt 2001 No. 183;
806
    Däubler, Internet und Arbeitsrecht, Frankfurt 2001 No. 184.
807
    See for businesses´ usual conditions Balke/Müller, DB 1997, 326; see also LAG (employment appeals tribu-
nal) Köln, LAGE section 1 KüschG Verhaltensbedingte Kündigung Nr. 66 for private phone calls.
808
     Kronisch, AuA 1999, 550. So for the use of work phones for telephone sex ArbG (labour court) Braun-
schweig, NZA RR 1999, 192 = K&R 2000, 42.
809
     Sächsisches Landesarbeitsgericht (employment appeals tribunal), CF 10/2000, 30; different BayOBLG,
judgement 12.8.1998, CF 3/1999, 33 concerning a police officer who used information from a police data base
for private purposes.
810
    LAG (employment appeals tribunal) Schleswig-Holstein, DB 1990, 635.
                                           Thomas Hoeren-Internet Law                                      274
secrecy of telecommunications applies only if someone offers telecommunication services on
a business basis. This applies to someone who persistently offers telecommunication to third
parties with or without the intention to make a profit (§85 [2] TKG). Using e-mail for work
purposes fails to constitute an offer to “third parties“, so that the secrecy of telecommunica-
tions does not apply.811 The employer is allowed to record the incoming and outgoing emails
and the destination. Furthermore he or she can read the employee's e-mails in case of absence,
unless the emails are marked explicitly as “personal“ or “confidential“ or the private nature
can be recognized otherwise. Apart from that, the employer is allowed to read the emails only
if he or she can prove a legitimate interest as for example
-     suspicion based on a good reason of a criminal act
-     e-mails threatening the internal peace in the firm (e.g. bullying)
-     to prevent the forwarding of business secrets.812


The permitted private internet use is subject to §85 TKG, so that any surveillance of e-mails is
prohibited (by criminal law!). According to §89 [2] no. 1 TKG the collection of data is al-
lowed for the purpose of the operational handling of telecommunication services on a busi-
ness basis. In addition §89 [2] No 1 lit. E TKG entitles the employer to collect data in order to
detect and prevent unlawful use of telecommunication networks. The data is to be deleted if it
is no longer necessary for the purposes mentioned or, in case of line-accounts drawn up on the
user’s request, not later than 80 days after forwarding the line-accounts.



 6WDWXWRU\ DXWKRUL]DWLRQ

a) §28 BDSG

According to §28 [1] BDSG the processing of personal data is legal within the framework of
the contractual relationship’s purposes between the processor and the person concerned. This
regulation is of special importance when processing the data of customers or employees. As
far as the processing of data is necessary for the handling and liquidation of the contract, there
is no objection for reasons of data protection813. Nevertheless it has to be considered that the
principle of „Zweckbindung“ (limitation to the intended purpose) has to be applied. Data is
only to be processed within the initial purpose; if the purpose ceases to exist, the processing

811
    Likewise Däubler, Internet und Arbeitsrecht, Frankfurt 2001, No. 235; Gola, MMR 1999, 323; Post-Ortmann,
RDV 1999, 103.
812
    Däubler, Internet und Arbeitsrecht 2001, 249.

                                       Thomas Hoeren-Internet Law                                       275
becomes illicit. Having a customer’s data in stock is not allowed. After completing the cus-
tomer’s order the data must be deleted.


Pursuant to §28 [1] No. 2 BDSG the permissibility has to be judged according to whether or
not the processing is necessary in order to safeguard the legitimate interests of the processor
or a third party.


Special regulations apply to specific types of personal data. Following the French data protec-
tion law any collection, processing or use of data about
-       racial and ethical origin
-       political opinion
-       religious or philosophical convictions
-       labor union affiliation
-       health and sexual habits


shall be interdicted in principle, unless an explicit consent of the person concerned is at hand
(article 8 [1] of the EU-Directive). In this respect the old “Sphärentheorie“ (regarding the spe-
cial personal sphere affected), which was rejected in Germany based on the “population cen-
sus” judgment, has been established throughout Europe.


Nevertheless §28 BDSG provides for a number of exceptions in compliance with the EU-
directive. Thus the prohibition on processing does not apply if there is


-       an explicit consent of the person concerned (§28 [6])
-       processing by organizations of a political, philosophical or religious nature and trade un-
        ion organizations (§28 [9])
-       the data concerned has evidently been made public by the person concerned (§28 [6] No.
        2)
-       as far as the processing is necessary for the legal enforcement of rights (§28 [6] No. 3).




813
      See on scoring-systems in the credit economy Koch, MMR 1998, 458.
                                             Thomas Hoeren-Internet Law                          276
b) Computerized profile searches (5DVWHUIDKQGXQJ) and information requests
by governmental agencies

Quite often governmental agencies, above all police and security agencies, request data from
companies from the private sector. Especially since the terrorist attack of September 11, 2001,
a number of powers of authority have been created or broadened to oblige companies to de-
liver the requested data. It is necessary to differentiate between computerized profile searches
(5DVWHUIDKQGXQJ), which can be undertaken based on special and very clearly outlined powers
of authorization, and the general powers of authorization for information requests, which are
much broader and quite questionable from a constitutional law point of view.


Concerning computerized profile searches, it is important to distinguish between the prosecu-
tion of crimes that have already been committed and preventive measures by the police. In the
repressive area, public prosecution authorities and the police are allowed to request data ac-
cording to §98 a, 98 b StPO (Code of Criminal Procedure). However, there need to be suffi-
cient factual indications for offences of serious significance. In addition, a formal warrant by
a judge is necessary. In case of imminent danger, the profile search can also be ordered by the
state prosecutor. This provision is not applicable to a profile search involving telecommunica-
tion processes (e.g. lists documenting telephone conversations or internet log files); in these
cases a more specific provision is effective (§101 a StPO). Concerning preventive measures,
state prosecutors and the police are able to proceed according to the danger-preventing acts
(*HIDKUHQDEZHKUJHVHW]H) of the federal states. These contain quite varying requirements for
requests for information. Regularly, it is necessary that an actual danger to the existence or
the safety of the (federal) state necessitates the information. The request for information can
also be based on a current danger to the physical integrity, the life or the freedom of a natural
person. Since here is not the place to refer to every single provision of the different federal
states, here are just a few of the more important ones:
In Berlin, §47 ASOG $OOJHPHLQHV *HVHW] ]XP 6FKXW] GHU |IIHQWOLFKHQ 6LFKHUKHLW XQG 2UG
QXQJ, General Act for the Protection of Public Safety and Order) applies, which requires a
warrant by a judge. In case of imminent danger, an order by the chief police constable or the
assistant chief constable is also sufficient. In Bavaria, §44 and 33 [5] PAG (3ROL]HLDXI
JDEHQJHVHW], Act on the Duties of the Police) are relevant, according to which the order can
be given by the heads of several police agencies (/DQGHVSROL]HLSUlVLGLXP (state police presid-
ium), 3ROL]HLGLUHNWLRQ (police head office), .ULPLQDOGLUHNWLRQ (criminal police head office),
/DQGHVNULPLQDODPW (state criminal investigation department). In all these cases, the consent of
                                   Thomas Hoeren-Internet Law                                277
the State Department for the Interior is necessary. Regulations in Baden-Wuerttemberg state
that the order can be given by the head of the /DQGHVNULPLQDODPW (state criminal investigation
department), of the :DVVHUVFKXW]SROL]HLGLUHNWLRQ (water police head office), the head of a
/DQGHVNULPLQDODPW (state criminal investigation department), of a police presidium or of a
police head office (§40, 22 [6] PolG (Police Act)). In Hessen, §26 HSOG (+HVVLVFKHV *HVHW]
EHU GLH |IIHQWOLFKH 6LFKHUKHLW XQG 2UGQXQJ, Hessian Act on Public Safety and Order) is ap-
plicable, according to which the warrant of a judge or, in case of delayed danger, an order by
the police are possible. In North Rhine-Westphalia, the provisions are quite restrictive, as §31
PolG requires a warrant by a judge in every case. In all these acts, the element of “current
danger“ (JHJHQZlUWLJH *HIDKU) is hard to substantiate. Several courts have ruled that it is not
sufficient to refer to the general terrorist endangerment after September 11 2001. Especially
the Higher Regional Court of Frankfurt has pointed out the fact that even in the case of a war-
rant by a judge, the court has to decide which specific facts support the assumption of a cur-
rent danger.814 The Regional Court of Berlin has ruled that a danger is only current if the det-
rimental effect of the harmful incidence on the affected good has either already commenced
                                                                                                     815
or is imminent or within close time, with a degree of probability close to certainty.                      This
decision of the Regional Court has been overruled by the .DPPHUJHULFKW (Berlin Court of
Appeal) in a decision of April 16, 2002.816 According to the opinion of the .DPPHUJHULFKW, a
'DXHUJHIDKU (continuous danger) is sufficient for the existence of a current danger: Such a
continuous danger is seen as current because it could turn into damage at any time, which also
includes the possibility of an imminent damage.817 In the area of repressive profile searching,
one furthermore has to consider that §7 [2], §28 BKAG (Federal Criminal Police Agency Act)
provides separate powers of authority for the BKA (Federal Criminal Police Agency). These
allow the collection of data on request at public and non-public institutions as far as this is
necessary for the fulfillment of the specific duties of the BKA. However, it also needs to be
considered that the BKA does not act in the area of danger prevention. In addition it is still
controversial today whether this provision is sufficiently certain. A large fraction of the legal
community takes the view that it can not be seen as a sufficient power of authority for a pro-




814
    Decision of January 8, 2002, DuD 2002, 174.
815
    Regional Court of Berlin, Decision of January 15, 2002, DuD 2002, 175; still different the previous decison
of the District Court Berlin-Tiergarten, Decision of September 20, 2001, DuD 2001, 691.
816
    1 W 89-98/02 (not yet published).
817
    Similar the Administrative Court (VG) of Mainz, Decision of February 1, 2002, DuD 2002, 303; Higher Ad-
ministrative Court (OVG) of Rhineland-Palatinate, Decision of March 22, 2002, DuD 2002, 307.
                                          Thomas Hoeren-Internet Law                                        278
file search.818 Furthermore, this provision only allows asking for data; there is no legal duty
for the institution or company to deliver the data it has been asked for.


Concerning the duty to provide information on telecommunication processes, the special
regulations in §100 a and b StPO should be noted first. According to these, the state prosecu-
tor and the police have the power to monitor telephone lines and to ascertain the content of
telecommunication. This also includes the content of an email, for example. However, this
power of authorization is only valid as far as one of the offences listed in the catalogue of
§100 a StPO is concerned. These are, for example, high treason, counterfeiting, trade in hu-
man beings, murder, manslaughter and genocide. A warrant by a judge is necessary. In case
of imminent danger, an order by the prosecution is also possible, which has to be affirmed by
a judge within three days, however. The former general power of authorization in §12 FAG
(Fernmeldeanlagengesetz, former Act on Devices for Remote Communication, replaced by
the TKG), which was quite questionable from a constitutional point of view, ceased to exist
on January 1, 2002. It was replaced by §100 g and h StPO. Those provisions allow access to
data concerning the connection (e.g. the telephone number that was dialed) but not to the con-
tent of the communication. A locally and temporarily sufficiently determined request for in-
formation is necessary, which can also extend to communication processes in the future. The
formal requirements are similar to those for §§ 100a and b StPO. In addition, the special
guidelines of the Telecommunications Act (TKG) have to be observed: §90 [1] TKG stipu-
lates a duty for publicly operating telecommunication companies to keep records in customer
files. These customer files can be accessed by the 5HJXOLHUXQJVEHK|UGH IU 7HOHNRPPXQLND
WLRQ XQG 3RVW (authority for the regulation of telecommunications and mail) according to §90
[2] TKG. This authority also arranges the access for security agencies (§90 [3] TKG). Ac-
cording to §89 [6] , there is an obligation to transmit %HVWDQGVGDWHQ (stock data), which does
not include the telephone number of the concerned person.
For the 0$' (PLOLWlULVFKHU $EVFKLUPGLHQVW military counter intelligence service), §10 [3]
MAD (Act on military counter intelligence service) is applicable. Similar provisions apply to
the %XQGHVQDFKULFKWHQGLHQVW (German external secret service), §8 [3] a BNDG (German Ex-
ternal Secret Service Act). These agencies are allowed to request connection data in order to
fulfill their duties, provided that the president of the particular agency has filed an application
and a ministry authorized by the German chancellor has approved the application. Concerning
the %XQGHVDPW IU 9HUIDVVXQJVVFKXW] (German internal secret service), the obligations to pro-

818
      See the references in Gerling/Langer/Roßmann, DuD 2001, 746, 747.
                                            Thomas Hoeren-Internet Law                         279
vide information are worded especially broadly. There is not just an obligation to provide
connection data for the fulfillment of the duties of the 9HUIDVVXQJVVFKXW] §8 [8] BVerfSchG
(Act on the German Internal Secret Service). Moreover, there is a number of further obliga-
tions to provide information apart from the area of telecommunication (§8 [5] to 12
BVerfSchG). These provisions establish an obligation to provide information in individual
cases and do not legitimate a profile search. There need to be actual indications of serious
intelligence activities or activities which severely endanger public safety. A request for in-
formation is also legitimate in order to protect against attempts to endanger German foreign
affairs by resort to violence as well as endeavors to violate the principles of international un-
derstanding. An application by the president of the %XQGHVDPW IU GHQ 9HUIDVVXQJVVFKXW] is
required, which a specially authorized ministry has to decide on. Obligated are financial ser-
vice institutes, e.g. concerning information on accounts, account holders and money flows.
Furthermore, mail service companies have to provide information on post office boxes and
other circumstances of mail services. Similar is true for aviation companies and telecommuni-
cations companies. In all these cases, the costs that result from the collection and transfer of
the data have to be compensated according to the Act on the Compensation of Witnesses and
Experts (=HXJHQ XQG 6DFKYHUVWlQGLJHQHQWVFKlGLJXQJVJHVHW], §17 a [1] No. 3 in analogue
application).819 A right of co-determination of the staff council does not exist, because the
regulations on the provision of information are a further statutory provision in the sense of
§87 [1] BetrVG (Act on Employees’ Representation and Co-Determination). With respect to
the transmitted data, the concerned person has a right of access to his or her personal data
(§34 [1] Nr. 2 BDSG), which is only excluded in cases of danger to public safety (§34 [4], 33
[2] No. 6 BDSG).


In June 2002, the Act “on the improvement of investigation measures based on the suspicion
of sexual abuse of children” that had been proposed by the state of Lower Saxony was passed
by the Federal Council (Bundesrat) by a majority of the states governed by the conservative
Christian Democrats. This act now also allows the surveillance of telecommunications and of
the internet if there is “suspicion of offences of sexual child abuse and the distribution of
(child-) pornographic material”. The utilization of the IMSI-catcher was expanded, which
means that the position of mobile phones may also be determined for tracing purposes. On the
recommendation of the Committee for Interior Affairs (,QQHQDXVVFKX‰), a resolution was


819
   See Regional Court (LG) Oldenburg, DuD 1998, 170 f.; Higher Regional Court (OLG) Zweibrücken, DuD
1998, 168.
                                      Thomas Hoeren-Internet Law                                  280
passed concerning the new Decree on the Surveillance of Telecommunication (7HOHNRPPXQL
NDWLRQV hEHUZDFKXQJVYHURUGQXQJ In the future, it should be possible to monitor DSL- con-
nections as well, and internet service providers will be obliged to “provide connection data
and communication data to the competent authority simultaneously and automatically”. Also
the dial-in data of mobile telephones should be transmitted to the authorities in real time. Fur-
thermore, it should be possible to record all connection data in the area of fixed network
phones and mobile phones, short message services and the internet for an unlimited length of
time. According to the opinion of the majority in the Bundesrat, not only the police but also
the intelligence service agencies (Verfassungsschutz, BND and MAD) should be allowed to
access this data at their discretion. The draft Act will now be transferred to the Federal gov-
ernment which has to forward it to the German parliament within six weeks.


Furthermore, the recent European Union developments have to be considered. At the end of
May 2002, the European Parliament approved the EU directive on data protection on the
internet and other electronic forms of communication.820 This directive allows the long-term
storage of data for purposes of the police or similar purposes. Internet users and internet pro-
viders are up in arms against this regulation. The directive still needs to be formally approved
by the governments in the Council of the European Union. As the directive is a compromise
between the Council, the European Parliament and the EU Commission, an approval seems
likely. It is planned to come into force at the end of next year. Both in Parliament and in the
Commission there were concerns about data storage, but the argument of the fight against
terrorism especially resulted in a majority for those in favor. The proposed directive allows
the member states to oblige the providers of internet and mobile phone services to store data
for a long period of time. If necessary, they could therefore provide information concerning
the sender, the recipient and the content of SMS-messages, or they could inquire who has ac-
cessed which internet sites and when. In order to appease the critics, the respective provision
was provided with the adjunct that such measures would only be permissible if they are “nec-
essary, adequate and proportional in a democratic society”. Companies which are faced with
requests for information by the police and security agencies should develop their own internal
policy concerning the handling of such requests and appoint a person who is internally re-
sponsible for the handling of those requests. It could cause problems to react immediately,




820
   See the parliament’s official statement of May 30, 2002, 15396/2/2001 – C5-0035/2002 – 2000/0189 (COD),
available at http://www.dud.de.
                                          Thomas Hoeren-Internet Law                                   281
especially based on a phone call from such an agency. It seems advisable to insist on a written
confirmation of the request for information.



9, /LDELOLW\ IRU LQFRUUHFW RU XQODZIXO GDWD SURFHVVLQJ

/LWHUDWXUH
&KULVWLDQ %RUQ 6FKDGHQVHUVDW] EHL 'DWHQVFKXW]YHUVW|‰HQ 0QVWHU  ,YR *HLV +DI
WXQJVULVLNHQ LP 'DWHQVFKXW]UHFKW IU 8QWHUQHKPHQ LQ &5   1LNR +lUWLQJ *H
ZlKUOHLVWXQJVSIOLFKWHQ YRQ ,QWHUQHW'LHQVWOHLVWHUQ LQ &5   *QWHU 6FKPLGW :DQQ
KDIWHW GHU 6WDDW" ± 9RUVFKULIWVZLGULJH 'DWHQYHUDEHLWXQJ XQG 6FKDGHQVHUVDW] 1HXZLHG 
'LUN 6FKPLW] 9HUWUDJOLFKH +DIWXQJ EHL XQHQWJHOWOLFKHP ,QIRUPDWLRQVHUZHUE YLD ,QWHUQHW LQ
005   ,UHQH :LQG +DIWXQJ EHL GHU 9HUDUEHLWXQJ SHUVRQHQEH]RJHQHU 'DWHQ LQ
5'9  


 &RQWUDFWXDO FODLPV

The incorrect or unlawful processing of personal data can result in a claim for damages based
on contractual aspects. In principle two cases have to be distinguished: In the field of labor
contract law for example, data processing for one’s own purposes can be assumed, so that the
specific duties of data protection are “only” secondary or accessory obligations in relation to
the basic legal transaction (compare §242 BGB).
Therefore if employees’ data are used unlawfully, a liability based on breach of duties (§280
BGB) must be considered, which is however limited to the material damage caused.


In the area of commissioned data processing (see §11 BDSG) normally contracts of agency
(§675 BGB) exist, where the obligation of confidential handling of data is for the most part a
prime contractual obligation. Here the principal has various claims: He can withdraw from the
contract or, e.g. regarding continuous obligations, terminate the contract. He can, however,
also claim damages for nonperformance.



 ††  VHTT %*%

Usually, the opportunity to pursue violations of the BDSG by tortious claims is more impor-
tant for the parties concerned.



821
   See Geis, Haftungsrisiken im Datenschutzrecht für Unternehmen, CR 1993, 269; Wind, Haftung bei der Ver-
arbeitung personenbezogener Daten, RDV 1991, 16; Tinnefeld/Ehmann, 7.2.2., S. 266.
                                       Thomas Hoeren-Internet Law                                     282
It has to be taken into consideration that the BDSG itself contains a specific basis of claim for
the public sector only: According to §8 BDSG public institutions are liable for incorrect or
unlawful automated data processing without regard to their fault up to a limit of 250.000 ¼
For the non-public sector, the BDSG does not include a specific legal basis for claims for
damages: If damages caused by incorrect or unlawful data processing occur in this sector, the
general rules of tort law of the Civil Code (§§ 823 seqq. BGB) apply. It is a characteristic of
these regulations that they require the fault of the processing party; in this respect liability in
the private sector under the data protection law is quite different from liability in the public
sector (regardless of fault). Nevertheless §7 BDSG lightens the burden of proof for the person
concerned as far as he does not have to prove the fault of the processing party; instead that
party has the to bear burden of proof.822


a) Violation of personal rights, §823 [1] BGB

§823 [1] BGB protects particularly the “general right of personality”823 which has become
common legal knowledge since the decision by the Federal Supreme Court (BGH) of
25.5.1954824. It is a so-called “Rahmenrecht“ (general right), the scope and limits of which
have to be found in each particular case. Concerning the breach of the general right of person-
ality by illicit data processing, the scope of injurious acts in question can be found in the
BDSG itself. Elements of danger and therefore possible injurious acts occur in the data collec-
tion and data storage phase as well as with the illegitimate forwarding of data to an unauthor-
ized third party.


To decide the question of fault the principles concerning product liability developed by the
Federal Supreme Court have to be applied by analogy, since here the person concerned is
likewise confronted with a highly complex organization, the structures of which he cannot
understand and examine825. Therefore he only has to prove that his damage can be traced back
to the processing of his data by the party in question, while the storing party has to prove that




822
    See Tinnefeld/Ehmann, part II, 7.2.2.3., p 269; Geis CR 1993, 269 (271).
823
    See BGHZ 45, 296, 307; 50, 133, 143; BGH, NJW 1984, 1886
824
    BGHZ 13, 334.
825
    Gola/Schomerus, section 8 n. 4.


                                         Thomas Hoeren-Internet Law                            283
the processing has either not caused the damage826 or that there is no fault on the side of the
party’s employees827.
Besides the material damages the person concerned can also claim non-material damages.


b) Violation of a protective law, §823 [2] BGB

Whoever, with fault, violates a “law aiming at the protection of a third party”, is obliged to
provide compensation for damages according to §823 [2] BGB. A protective law is every le-
gal norm (see Art. 2 EGBGB), which is meant to protect somebody else’s interests. By now it
is accepted that the BDSG can be a protective law within the meaning of §823 [2] BGB. Nev-
ertheless every single norm has to be checked as to whether it is aimed at the protection of the
person concerned against incorrect or unlawful data processing. By applying §823 [2] BGB
the person concerned can even claim damages to his assets – in contrast to §823 [1] BGB,
which requires an absolute right such as property.


c) Compensation for damages according to §§ 824, 826

Besides §823 [1] and [2] BGB a claim based on §824 BGB has to be considered. According
to this legal norm the data processing party is liable, if it


-     alleges or disseminates a fact
-     untruthfully
-     which is qualified to endanger the concerned party’s credit or to bring about other disad-
      vantages for its earnings or progress
-     provided that the processing party ought to have known the falsehood.


§824 therefore lays down a liability based on incorrect data processing which is qualified to
negatively affect a person’s apparent economic worth828.


Besides that a liability according to §826 BGB is of importance, since the Federal Supreme
Court829 assumes a liability to pay damages concerning the passing on of correct information


826
    See LG (Regional Court) Bonn, RDV 1995, 253 on liabilty for breach of banking secrecy (section 28 [1], s. 1
No. 1 BDSG).
827
    Gola/Schomerus, section 8 n. 4; Bergmann/Möhrle/Herb, section 8 n. 27; see also BGH (Federal Court of
Justice), BGHZ 51, 91; Mertens in MüKo section 823 No. 134; with a different view Wind, RDV 1991, 16 (23).
828
    See OLG (Higher Regional Court) Frankfurt, 6.1.1988, RDV 1988, 148.
829
    LM section 826 No. 3.
                                        Thomas Hoeren-Internet Law                                         284
as well, in particular cases: If pieces of information about the private life of a person are for-
warded without a compelling reason, §826 offers protection. The person can then also claim
for the resulting damage to his assets.


d) Rights to restrain and to elimination

Besides the claim for damages the party concerned might have rights to restrain and to elimi-
nation according to §823 [1] BGB, which exceed the claims laid down in the BDSG (§6 com-
bined with §§ 34, 35) because they are also effective against a third party. Such claims are
provided in general by §§ 1004 and 823 [1] BGB by analogy in the case of violation of gen-
eral personal rights by an incorrect or unlawful forwarding of personal data830. The person
concerned can claim elimination or surrender of the data referring to §§ 1004 and 823 [1]
BGB by analogy831. At the same time he has a claim against the storing party to surrender the
name and address of the data recipient based on the principle of good faith, embodied in §242
BGB832.



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In §1 [3] BDSG the subsidiary character of the BDSG is laid down as a rule. If other legal
provisions regulate how to deal with personal data, they have priority over the BDSG. The
states’ data protection acts are considered to be “other legal provisions” within the meaning of
§4 [1] BDSG if they provide a statutory definition for the authorization to process and use
personal data. Apart from specific regulations for the telecommunications sector, one has to
consider e.g. §§ 147, 200 AO (general tax code), which provides the financial authorities with




830
    BGH, NJW 1984, 436 and 1887.
831
    BGH, BGHZ 27, 284, 290seq.
832
    BGH, NJW 1984, 1887.
                                    Thomas Hoeren-Internet Law                                285
the power to directly access the data processing devices of taxpayers during external tax in-
spections.
Concerning the online-sector, the data protection regulation in the TKG (Telecommunications
Act), the TDDSG (Teleservice Data Protection Act) and the MDStV (Media Service State
Treaty), which all refer specifically to this sector, are of significance beside particular state
laws like the “Hamburgisches Mediengesetz“ (media act of Hamburg).



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  6FKHUHU 'DV QHXH 7HOHNRPPXQLNDWLRQVJHVHW] LQ 1-:   +HOPXW 6FKD
GRZ 7HOHNRPPXQLNDWLRQVGLHQVWXQWHUQHKPHQ'DWHQVFKXW]YHURUGQXQJ 7'69 LQ 5'9 
 8OULFK :XHUPHOLQJ 6WHIDQ )HOL[EHUJHU )HUQPHOGHJHKHLPQLV XQG 'DWHQVFKXW] LP 7HOH
NRPPXQLNDWLRQVJHVHW] LQ &5  

The „Telekommunikationsgesetz“ (TKG, Telecommunications Act)833 is the successor to the
former „Fernmeldeanlagengesetz“ (FAG, Act on Devices for Remote Communication), §12
of which was used as a basis of authorization for enquiries about telecommunications proc-
                                                  834
esses in the course of criminal investigations.         The data protection regulation of the TKG
can be found in §§ 85 seq.: §85 TKG specifies the secrecy of telecommunication guaranteed
as a basic (constitutional) right in Art. 10 Grundgesetz (Federal basic law)835 and covers the
content and specific circumstances of telecommunication, “especially the fact whether some-
body is taking or has been taking part in a telecommunication process” (§85 [1] TKG). Any
technical process of broadcasting, transmission and reception of messages of any kind as
symbols, language, pictures or sounds with telecommunications installations is according to
§3 [16] TKG part of the scope of application of the TKG as regards the subject matter. Be-


833
    Telekommunikationsgesetz, BGBL. 1996 I, 1120.
834
    Compare Büchner, in: Beck’scher TKG-Kommentar, section 85 No. 13.
835
    See Rieß, Joachim, Vom Fernmeldegeheimnis zum Telekommunikationsgeheimnis, in: Büllesbach (ed.),
Datenschutz im Telekommunikationsrecht, Köln 1997, 126.
                                      Thomas Hoeren-Internet Law                                286
sides the classic TK-suppliers (especially voice communication via telephone) the subject
matter of the TKG also covers the transmission of e-mails and any other type of online data
exchange (especially via telnet or FTP), as far as the technical process of communication is
concerned836.


§89 TKG regulates data protection concerning the supply of telecommunication services.
However, this legal provision only provides a basis of authorization to issue an ordinance for
“the protection of personal data of the parties involved in the telecommunication which regu-
lates the collection, processing and use of these data”837. For quite a long time there was only
a “Telekommunikationsdatenschutzverordnung“ (TDSV – telecommunication data protection
ordinance), which was issued on the basis of the PTRegG before the TKG came into force838.
This unamended version of the TDSV839 did not achieve the aim of regulation of §89 TKG,
though: While the TDSV (unamended version) was only applicable to the supply of telecom-
munication to the public on a commercial basis, §89 TKG refers to any enterprise which
“produces telecommunication services in a businesslike way”. According to the legal defini-
tion of §3 No. 5 TKG the basis of authorization in §89 TKG also covers non-commercial -
meaning not profit-oriented - offers of telecommunication services as well as closed user
groups840. With regard to this, a new regulation was necessary within the framework of an
extended telecommunications data protection ordinance (TDSV amended version), which
now applies also to telecommunications within college / university networks and business
intranets. This ordinance came into force on December 21, 2000.841


Just like the general data protection law in the BDSG, the sector-specific data protection of
the law of telecommunications covers the collection, processing and use of personal data. In
the TKG, however, pieces of data on legal persons that are covered by the secrecy of tele-
communications are put on a par with natural persons (see §89 [1] sentence 4 TKG)


In §89 [2] there is an enumeration, meant to be implemented by the TDSV, covering a possi-
ble basis of authorization for the collection, processing and use of personal data in the tele-


836
    See for delimination Büchner, Beck´scher TKG Kommentar, section 89 No. 11; Gola, RDV 1998, 243.
837
    In favour of the immediate operation of section 89 [2] – 10 TKG Büchner, in: Beck´scher TKG-Kommentar,
section 85, No. 1.
838
    See Schadow, RDV 1997, 51.
839
    Telekommunikationsdatenschutzverordnung (TDSV) of 12.7.1992, BGBl. I, p. 982.
840
    See Büchner, Beck´scher TKG-Kommentar, section 85 No. 5.
841
    BGBl. I, 2000, 1740.
                                          Thomas Hoeren-Internet Law                                  287
communications sector. Therefore according to §89 [2] No. 1 TKG data processing is justi-
fied, provided that it is required by the in-house handling of the telecommunication services,
namely for


-   the dealings related to the contractual relationship (§89 [2] No. 1 lit a TKG): Thus the
    storage of stock data, e.g. name, address, phone number or e-mail or the static IP-address
    in the online sector is permitted as far as necessary for dealing with the contractual rela-
    tionship.


-   the establishment and maintance of a telecommunication line (§89 [2] No. 1 lit b TKG):
    This basis of authorization refers to the telecommunication traffic data842. Since the TKG
    also covers e-mail communication, caching of e-mails in POP-mail accounts or in the
    SMTP-spool file is permitted. Even though §89 [3] TKG implies that in principle only the
    specific circumstances of the telecommunication may be collected, processed and used,
    §89 [4] TKG provides an exception for communication contents, the processing of which
    is part of the service for technical processing reasons. Therefore the storing and process-
    ing of incoming messages by voicemail-services is legitimate, e.g. the answering machine
    and forwarding services of mobile phones.


-   determination and proof of fees (§89 [2] No. 1 lit c TKG)
-   elimination of defects and detection of improper use (§89 [2] No. 1 lit. d and e TKG):
    These authorizing rules are especially questionable for the online-sector, since the provi-
    sion does not state clearly whether and to what extent the online-provider may record the
    customer’s utilization data in log-files (see more about that further down).


§89 [2] TKG provides additional authorization provisions in no. 2 (processing of anonymised
traffic connection data for demand planning) and in no. 3 (list of individual calls and identifi-
cation of connection in the case of threatening or nuisance calls). It is remarkable though, that
some authorizing provisions of §89 [2] – unlike the general scope of the TKG – are geared to
speech telephone services: For example §89 [2] No. 3 lit. b covers only identification of con-
nections in case of threatening or nuisance calls. The identification by the provider of a sender
of spam-emails is not directly included.




                                   Thomas Hoeren-Internet Law                                  288
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The „IuKdG“ (Information and Telecommunication Service Act), which came into force on
August 1st,1997 used to include the TDDSG (Teleservices Data Protection Act) in article 2.
This act has been modified in the context of the implementation of the E-Commerce directive.
Therefore, since the beginning of 2002 a new version of the TDDSG is effective as article 3
of the Act on the legal framework of electronic commerce. (Gesetz über rechtliche Rahmen-
bedingungen des elektronischen Geschäftsverkehrs).


842
      See Büchner, Beck´scher TKG-Kommentar, section 85 No. 21.
                                      Thomas Hoeren-Internet Law                         289
This act regulates the protection of personal data during the use of teleservices within the
meaning of §2 TDG. In particular, services of individual communication (telebanking, e-mail
and data services) belong to these services. The question of delimitation to the media services
remains unclear. Concerning media services, the data protection requirements are regulated in
the new Media Service State treaty (MdStV). In the face of the wide congruence of the
MdSTV and the TDDSG with respect to data protection, this question seems to be of a quite
theoretical nature.


The data protection provisions in TDDSG and MDStV are both based on the principles of
„Zweckbindung“ (limitation to the intended purpose), system data protection (Systemdaten-
schutz) and avoidance of data. System data protection is supposed to ensure that even the sys-
tem structures themselves are under data protection control. The collection and processing of
personal data are to be avoided if at all possible by a data-minimizing organization of the
transmission, invoicing and payment as well as by separating the processing sectors techni-
cally and organizationally (see §3 [4] TDDSG / §12 [5] MDStV).


Just like with the general data protection provisions, the collection and processing of personal
data in the online sector is admissible if it is provided for by law or the person concerned has
consented (§3 [1] TDDSG/ §12 [2] MDStV). The principle of “Zweckbindung“ has to be ap-
plied. The person concerned has to be informed about type, extent, location and purpose of
the collection and use of his data before they are collected. In addition users have the right to
inspect free of charge the data stored about them - in cases of short-term storage and elec-
tronic means. The conditions of a valid electronic consent are regulated extensively by §4 [2]
TDSG. Creating a user profile is admissible only when using pseudonyms.
Stock and traffic data are distinguished and regulated separately. The relevant regulations in
§5 TDDSG / §14 MDStV are in general self-explanatory and need not to be discussed here in
detail843.


The service provider is now allowed to use billing data for the investigation of improper us-
age of its services if there are actual indications for such an abuse (§6 [8] TDDSG). Several
provisions from the old TDDSG were deleted, as they were included in the BDSG. Among
these are the general provisions concerning the avoidance of data, e.g..



                                   Thomas Hoeren-Internet Law                                290
The area-specific data protection law of TDDSG /MDStV does not apply to the use of non-
personal data, especially concerning information about the clients who have accessed an
online service. This is above all important for the recording of traffic data in log-files, e.g. in
order to draw up user profiles and access statistics844. Personal traffic data is to be deleted as
soon as possible, not later than immediately after the end of the respective usage, provided it
is not accounting data within the meaning of §6 [4] TDDSG. Non personal data, e.g. pure
technical information (IP-addresses), may be logged for analysis, provided the corresponding
user can not be traced back based on the data845.


For the rest the provisions of the TDDSG or the MDStV apply only to the processing of user
data, meaning the data of those who call up teleservices or telecommunication services. The
treatment of non-using third party data in the online area is not covered by the regulation. In
this respect the states’ data protection acts (e.g. Landesdatenschutzgesetz NRW, State Data
protection Act of North Rhine-Westphalia)) apply for local government bodies, §§ 27 seqq.
BDSG for the private sector.



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At the moment so-called web-cookies and their possible negative effects on the privacy of
internet users are literally on everybody’s lips. A cookie is a data sequence that was generated
by a web-server then sent to a web-browser and filed in a special cookie-file of the local com-


843
    See in extension Engel-Flechsig, RDV 1997, 59.
844
    See also Wolters, Einkauf via Internet: Verbraucherschutz durch Datenschutz, DuD 1999, 277.
845
    See Schulz, Rechtsfragen des Datenschutzes bei Online-Kommunikation, p. 40seq.
                                           Thomas Hoeren-Internet Law                             291
puter.846 In reverse, the data of local cookies is transferred to the web-server as well. In gen-
eral both procedures happen without the knowledge of the user. Normally cookies are in-
tended to collect information about the user of the web-browser and transfer it to web-servers.
Offerors of catalogs and newspapers profit from this by building user-profiles and send care-
fully targetted offers to web-users by placing them on their preferred websites.
In this context cookies are very profitable for the offerors, because they make it possible to
store the collected data locally on the user’s system. Therefore sustaining a big and expensive
database is not necessary. Furthermore cookies can be helpful for internet-shopping, because
the virtual shopping basket created can be filed by using cookies.


Since their creation by the Netscape Communications Corporation, cookies have been highly
controversial, because a lot of negative characteristics and abilities are associated with them,
for example the transfer of viruses, the spying-out of e-mail addresses and personal data or the
making available of hard disk directories to others. In any case it is not true that cookies can
transfer viruses to computers. Concerning the information stored in cookies, it can be said that
this is restricted to data that come from the web users themselves and that they contain only
data which they themselves created during communication with the server. The spying-out of
further data of the local computer is not possible by using cookies.847
In general therefore it is not, or only with a major effort, possible to investigate the personal
data of a user with the help of cookies.848 Through an evaluation on the server’s side of cook-
ies which were created during the use of different services from the same offeror, it is possi-
ble to build customized user-profiles, which are personal where users have registered them-
selves by name or email address for at least one online-service within the system of ser-
vices.849 Otherwise a direct reference to a person can be assumed only if conclusions about
the identity of the user can be drawn from the internet address of the computer.850 This could
be the case with static IP-addresses that are connected to a “talking” personal computer identi-




846
    About the technology see Eichler, K & R 1999, 76; Wichert, DuD 1998, 273; David Whalen, The Unofficial
Cookie FAQ, http://www.cookiecentral.com/faq., version 2.53.
847
    see Wichert, DuD 1998, 273 (274).
848
    Wichert, DuD 1998, 273; see also Eicherl, K & R 1999, 76 (78), though he supposes without any detailed
explanation, that an offeror of services can store the e-mail address of the user in a cookie unnoticed.
849
    see Wichert, DuD 1998, 273 (274)
850
    compare Bensberg/Weiß, Web Log Mining als Analyseinstrument des Electronic Commerce, in:Urh/Breuer
(eds.), Proceedings zur WI-Fachtagung Integration externer Informationen in Management Support Systems,
Dresden 1998, p. 197; Bizer, DuD 1998, 277 (278); Eichler, K & R 1999, 76 (77).
                                           Thomas Hoeren-Internet Law                                    292
fication or domain.851 Concerning dynamic IP-addresses which are assigned to the user’s
computer temporarily for every dial-up connection, a reference to a person is given only if the
offeror of services and the internet-provider work together or are identical.852


If cookies contain personal data, their use is problematic with regard to the restrictive data
protection provision of the area-specific TDDSG/MDStV, because according to §3 [1]
TDDSG/§12 [2] MDStV personal data for the use of tele-/media-services can be collected,
processed and used only if the user has effectively agreed or there is a legal permission.853
Moreover §6 [3] s. 1 TDDSG and §13 [4] MDStV explicitly make it clear that user profiles
are only permissible with the use of pseudonyms. It is also inadmissible to combine the pseu-
domized user profiles with personal information about the user (§6 [3] s. 2 TDDSG). There-
fore a comparison of data between the user’s internet-provider and the offeror of services who
stores only the dynamic (to it pseudonym) IP-address in cookie-based user profiles is not al-
lowed. If cookies are used in order to make the use of an online-service possible or to facili-
tate it (individualized service, shopping baskets, etc.), §6 [2] TDDSG/§15 [2] MDStV have to
be considered. As long as they contain personal “utilization data” the data of cookies must be
deleted as soon as possible but not later than the end of the particular use.


If there is no reference to personal data, then data protection law is not applicable to cookies.
For legal defense against unwanted cookies, the right of possession pursuant to §862 [1] BGB
has to be considered: according to this the possessor can demand that the trespasser eliminate
the disturbance, as long as an unlawful private nuisance according to §858 [1] BGB exists. If
the unrequested (and therefore unauthorized) storage of a cookie on the user’s hard-disk is
seen as a disturbance of possession, a no-fault claim to elimination and restraint results from
§862 [1] BGB.854 The Local Court (AG) Ulm assumed that the unauthorized use of cookies
by a shopping mall opens the possibility of a claim for damages in connection with §826 BGB
for the shop operator against the mall operator.855 The latest US judgments differ from this by
assuming an implied consent to cookies by the user.856



851
    e.g. „hoeren.uni-muenster.de“; concerning the classification of static IP-addresses as personal data see Schulz,
Rechtsfragen des Datenschutzes bei Online-Kommunikation, p. 41; compare also Felixberger/Stricharz, DuD
1998, 1.
852
    Bizer, DuD 1998, 277 (278); Schulz, Rechtsfragen des Datenschutzes bei Online-Kommunikation, p. 40seq.
853
    see detailed Bizer, DuD 1998, 277 (279).
854
    Compare Hoeren, Web-Cookies und das römische Recht, DuD 1998, 455.
855
    AG Ulm, judgement of 29.10.1999, CR 2000, 469.
856
    In re Double Click, inc. Privacy Litigation, 60 CIV. 0641, 2001 US Dist. Lexis 3498 (SDNY 2001)
                                           Thomas Hoeren-Internet Law                                           293
 /RJJLQJ RI XWLOL]DWLRQ GDWD WR FRPEDW DEXVH

It is of special relevance in practice to what extent a provider is allowed to log the utilization
data of the users in order to uncover disturbances and abuse by evaluating the log files cre-
ated.


The TDDSG and the MDStV do not state anything about this. This means that at the moment
there is no legal authority concerning utilization data of teleservices and media services that
would authorize the logging of personal utilization data in order to fight abuse.857 But this
applies only to the scope of application of the TDDSG/MDStV, i.e. for data that relates to
content which is generated during the use of a teleservice, e.g. the misuse of a commercial
fee-based web service, for example the use of somebody else’s account.
However one could conceivably apply the general authorization rule of §28 [1] no. 2 BDSG
in this case: with misuse of online-services, the storage and evaluation of utilization data in
log files would serve only the protection of the service supplier’s legitimate interests. Such a
recourse to the general data protection law seems not to be excluded by the TDDSG, because
§3 [1] and [2] TDDSG explicitly allows the collection and processing of personal online
utilization data according to other legal provisions. On the other hand, the TDDSG is a self-
contained specialized complex of provisions concerning online data protection and therefore
as lex specialis has priority over the BDSG in general.


This leaves the above-mentioned authorization rules of the area of telecommunication unaf-
fected. If there are factual indications, which must be documented in writing, the applicable
TDSV allows access providers to collect, process and use contractual and traffic data, as long
as this is necessary to “uncover and prevent a benefit from being obtained by devious means
or other unlawful use” of the respective telecommunication service (§7 [1] no. 2 TDSV). A
corresponding provision for a new TDSV on the basis of the TKG is stated in §89 [2] no. 2 lit.
e TKG).


Moreover § 7 [2] TDSG provides that the telecommunications service supplier can retroac-
tively evaluate the connections data using the accounting data from a whole month, where
“actual indications justify the suspicion of a criminal abuse of telecommunication devices or
an abusive use of telecommunication services”. In the same way § 89 [2] no. 2 lit e) s. 2 TKG




                                    Thomas Hoeren-Internet Law                                294
provides that an evaluation of already existing data is permissible in the case of concrete indi-
cations of an “abusive use”. Therfore it is clear that a breach of the purpose-oriented principle
(regarding accounting data) by the provider is permissible only if it is a telecommunication-
specific abuse. The evaluation of utilization and traffic data in order to prosecute criminal
offences is incumbent on the prosecuting authorities only, who themselves must heed the pro-
visions of the StPO (§ 100a seqq., 100g, h).858



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The advantages of outsourcing are often emphasized in the e-commerce industry. The data
processing is outsourced to subsidiary companies, which act as separate service-centers for
other companies too.


a) Commissioned data processing and delegation of functions

It is important to distinguish between commissioned data processing and the delegation of
functions. According to the BDSG commissioned data processing is almost unrestrictedly
allowed (§ 11). The legal status of a delegation of functions is different. In such a case the
transmission of data to the person who was entrusted with the function would be seen as a
data transmission to third parties, so that the preconditions for a permitted data transmission
must be fulfilled. In this case it would remain uncertain whether a transmission to the person
entrusted with the function is necessary; so the whole policy decision of outsourcing would be
examined from a data protection point of view.


Such an outsourcing (in the sense of a delegation of functions) can be assumed if the third
party took over further functions beyond the mere data processing. Here the third party’s
room to maneuver is decisive. If he or she can act on his or her own authority, there is no
commissioned data processing. The fact that not the data processing or use as such is the ob-

857
    See also the corresponding findings in the evaluation report of the IuKDG (information and telecommunica-
tion services law), BT-Drs. 14/1191; Roßnagel, Evaluierung des TDDSG, DuD 1999, 250.
858
    See on the “seizure” of cached e-mails LG (Regional Court) Hanau, judgement 23.09.1999, MMR 2000, 175,
p. 175 with comments Bär.; compare on the access to future traffic data LG München I 29.6.1998, MMR 1999,


                                        Thomas Hoeren-Internet Law                                       295
ject of the contract but rather a concrete execution of duties – where the transferred data is
only an aid – argues for such independence. The fact that the outsourcing party has no influ-
ence on single phases of the processing or that it can shift liability for admissibility and cor-
rectness on to the processor, indicate outsourcing in the above-mentioned sense. If the control
over the data and its processing are more important for the commissioned company, a func-
tion control is generally not what is desired. This would argue for the view that the model
discussed above has to be seen not as outsourcing but rather as data processing on commis-
sion in the sense of § 11 BDSG.


In the case of a commissioned data processing it has to be noted that the principal is responsi-
ble for compliance with data protection provisions according to § 11 [1] BDSG. The contrac-
tor can process personal data only within the scope of the instructions from the principal (§ 11
[3]). In particular the principal has to choose the contractor according to its ability to fulfil the
requirements of the data security provisions (§ 11 [2] s. 1). In this respect the contractor has
no latitude regarding the definition of the data processing that it carries out.


With regard to the decisions by the data protection authorities, it must be stipulated in every
single contract with the contractor which security measures are to be taken regarding the reli-
ability of the contractor. The contractor must undertake to select the employees for the par-
ticular commission very carefully, especially regarding the confidential treatment of sensitive
data. The reliability of the employees must be regularly supervised by the contractor; the
principal must also have the opportunityto test the reliability of the employees. In addition the
contractor has to be committed to using only secure programs, which guarantee especially
confidentiality and integrity and prevent a conjunction with other data bases. Furthermore a
graded system of anonymisation has to be developed. In doing this it has to be clarified which
divisions of the subsidiary can and must take note of the data that is to be processed in un-
coded form. If an encoding of personal data does not impede the performance of the function
of a division, it must be carried out.


It must be ensured that the entire data processing is carried out according to the instructions of
the principal. The concrete realization of the data processing has to be specified exactly. This
does not mean that the staff of the parent company must supervise the staff of the subsidiary


237; LG Oldenburg, judgement 2.11.1998, MMR 1999, p. 174; see also Bär, Strafprozessuale Fragen der EDV-
Beweissicherung, MMR 1998, p5.
                                     Thomas Hoeren-Internet Law                                      296
comprehensively. Such a comprehensive supervision would thwart the efficiency and cost
saving that is connected with commissioned data processing. Rather, a system of instruction
in compliance with the specific characteristics of the commissioned data processing has to be
installed that guarantees an immediate realization of the principal’s instructions. It is possible
for the subsidiary to name one or more contact people who respond immediately to the in-
structions of the principal parent company and who pass on the instructions to the staff of the
subsidiary. The respective contact persons must be named in the outsourcing contract. The
details about how to make contact have to be included in the contract as well as the obligation
to immediately carry out the instructions. Furthermore, data security measures according to
the latest state of technology must be demanded. The principal must have the opportunity to
check the compliance with data protection and data security measures any time. In case of
breaches of duties, sanctions including the cancellation of the contract must be provided.


Further the purpose-oriented principle must be taken into account. The transmission of data to
the contractor must be limited to only what is strictly necessary. The contractor is not allowed
to use the data for its own purposes. The principals may not cut down their capacity to act by
transferring main responsibilities to private companies and in this way lose the power to regu-
late data processing procedures. It must remain possible to cancel the outsourcing in case of
contractor unreliability or similar circumstances. A non-reversible delegation of functions is
not permitted.


With regard to the transparency of the data processing it must be taken into account that the
concerned person must be informed about the method and extent of the outsourced data proc-
essing. It would be a mistake however, to base a commissioned data processing on a consent
by the concerned person, because it is not possible to make the complicated data processing
proceedings transparent right from the beginning. A sub-delegation of contractual obligations
should be permissible only in those cases which are sufficiently described in concrete terms in
the contract. Externally, between the contractor and the principal the contractor remains liable
for compliance with data protection. Internally, the contractor has to place an obligation on its
sub-contractors to keep to the same data protection standard. Also the sub-contractors must
accept the supervisory power of the principal.




                                    Thomas Hoeren-Internet Law                                297
b) Specific features of persons with security clearance

According to § 203 [2] StGB (penal code) you commit a criminal offence if you disclose a
secret of another, in particular, a secret which belongs to the realm of personal privacy or a
business or trade secret, which was confided to, or otherwise made known to you in your ca-
pacity as a public official or a person with special public service obligations. This strict provi-
sion includes


-     lawyers and doctors (especially regarding remote maintenance)859
-     insurance companies in the medical area
-     banks.860


For these areas outsourcing is permissible only with the consent of the customer. A solution
may be to consider the staff of the subsidiary as professional acting assistants as defined by §
203 [3] StGB. This requires that the parent company can influence the choice of who carries
out the respective data processing. Here appropriate provisions for the data processing in the
framework contract are needed. Parent company and subsidiary should reach an agreement
where the technicians concerned are mentioned by name and are subject to the instructions of
the parent company. If the collaborators functionally belong to the staff of the parent com-
pany, they have to be regarded as assistants as defined by § 203 [3] StGB.861 The possible
disadvantage of this perspective is that external staff would have to be seen as employees of
the parent company according to the Law on Temporary Employment.



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859
    see e.g. the 11th progress report of the Hamburg data protection representative 1992, no. 3.3; p. 24seq.; Bavar-
ian state representative for data protection, 14th progress report 1992, no. 2.2, p. 10seq.; Hessian data protection
representative, 20th progress report 1991, no. 15.1.1, p. 78seq.; Ehmann, CR 1991, 293seqq.; Zimmer-
Hartmann/Helfrich, CR 1993, 104seqq.
860
    see comprehensively Otto, wistra 1999, 201, 202.
861
    likewise also Ehmann, CR 1991, 293, 294 for the case of remote maintenance in a medical practice
                                             Thomas Hoeren-Internet Law                                         298
Particularly in respect to the internet, the special transparency of the customers and their per-
sonal means is praised. Log-in-files and the abilities of technical tools on the internet make it
possible to create personal profiles of single customers very quickly. The internet industry
sees this as an advantage for the customer and promotes it as so-called “customization”. From
a data protection point of view such a model is very doubtful. The data protection law refers
to the principle of limitation to a purpose. On the one hand data can only be used without the
agreement of the data subject for concrete purposes – especially for the performance and the
settlement of a contract with the customer (see § 28 [1] no. 1 BDSG). In addition there is the
principle of data avoidance taken from the TDDSG. This principle has been integrated into
the BDSG and requires the parties to refrain from the collection of personal data as far as pos-
sible. A data collection on stock is incompatible with the concept of the German data protec-
tion law. As a compelling result, the setting up of general data pools from different sources
does not correspond with the requirements of the BDSG. From this point of view, data mining
is not allowed. If you want to use such procedures, you must get the approval of the person
concerned. While doing so you cannot succumb to the temptation of the alternative strategy of
getting an overall approval for every single act of data mining. According to § 4a [1] the in-
tended purpose of the collection, processing and use has to be made clear to the affected per-
son in the approval. Therefore one would suggest making the concrete extent of the intended
data mining a subject in the business relationship with the customer right from the beginning.



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                                   Thomas Hoeren-Internet Law                                299
Cross-border transfer of data is one of the core problems of data protection law. In the age of
the global network it is easily possible in a technical sense for a German company to collect
and use data which is stored in an Italian computer center without any temporal delay.862 A
company can use this possibility to circumvent national data protection laws. If a company
does not want to submit to the national data protection law and the state controls that result
from it, it can carry out its data processing services abroad. All important personal data (espe-
cially of employees)863 are stored in foreign computer centers and can be retrieved if neces-
sary; in this way they are not generally subject to the undesirable national law.


The BDSG in its first version did not provide this possibility and therefore did not address this
issue; astonishingly the present BDSG does not contain any provisions about so-called
“Transborder Data Flow” (TBDF) either (compare § 3 IX 2; § 17). Even the existing interna-
tional agreements do not deal with the special problems of TBDF:


-     the recommendations by the OECD of September 23, 1980 concerning the guidelines on
      the protection of privacy and the cross-border transfer of personal data is not binding ac-
      cording to international law and its content is too abstract.


-     the convention of the Council of Europe for the protection of individuals with regard to
      automatic processing of personal data has been implemented into German law and is
      therefore legally binding.864 These regulations contain only general principles, however,
      which can be ratified in varying ways. In addition they were ratified by only 7 EU-
      members.


Recently the cross-border exchange of data looked like becoming a huge menace to the de-
velopment of a homogeneous European internal market. At present almost every EU member
state has provisions on data protection. The structure and the use in practice originally dif-
fered fundamentally, however. This situation led to the danger of special data havens being
established: companies could have processed their data in Italy or Spain to avoid the rigid
data protection in Germany or England.865



862
    Compare Schapper, CR 1987, 86-94; De Terwange/Louvenaux, Data Protection and Online Networks, MMR
1998, 451.
863
    Compare Däubler, Die Übermittlung von Arbeitnehmerdaten ins Ausland, Cr 1999, 49.
864
    BGBl 1985 II, 539

                                      Thomas Hoeren-Internet Law                                 300
Now the EU data protection directive and the new BDSG provide clear rules on this question.
According to art. 25 [1], personal data can be transferred to third countries (i.e. countries that
are not members of the EU) only if there is an “adequate level of protection” (also § 4b [2] s.
2 BDSG). The requirements of such a level of protection are not clear .866 Art. 25 [2] of the
data protection directive and § 4b [2] s. 3 BDSG only state that the adequacy has to be as-
sessed “in the light of all the circumstances”. Especially the nature of the data, the duration of
the processing and the “rules of law, both general and sectoral, in force in the third country in
question and the professional rules and security measures which are complied with in that
country” are relevant. The EU commission can state in a formal procedure, if a third country
meets the required level of protection for the data transmission (art. 25 [4] seqq., art. 31
[2]).867


Data transmission can exceptionally be carried out in third countries that do not have an ade-
quate level of protection. § 4c [1] BDSG contains general authorization rules which justify
the transmission of data to insecure third countries (e.g. consent of the data subject, fulfill-
ment of the contract, protection of interests, transmission out of a public register, as far as it
does not conflict with a legitimate interest). Apart from these exceptions (which must be in-
terpreted narrowly) a transmission is permissible only if the data transmitter sufficiently
guarantees the protection of the privacy and the fundamental rights of the data subject. Art. 26
[2] mentions as an example for adequate guarantees of protection the so-called contractual
solution: the data transmission to an insecure third country should be agreed contractually
between the transmitter and the concerned person or – with the permission of the internal
board of control – between the transmitter and receiver.868 In the latter case the competent
board of control permits the transmission (§            4c [2] BDSG). The complex negotiations
between the US and the European Commission on the passing of a safe-harbor-solution are
based on these legal grounds. The USA does not have a level of protection that corresponds to
EU standards869 (similar to Australia or Japan for example). Therefore data transfer between
Europe and the US is actually prohibited. Because of this awkward situation a model contract
was hastily developed, on which the contractual relations between the transmitter and the
receiver in the USA can be based. In the middle of 2000 this model contract was passed. (see
attachment) But it was never applied because the current US president George Bush rejected
865
    See also Hoeren, Rechtsoasen im Internet, MMR 1998, 297.
866
    Compare Riemann, CR 1997, 762.
867
    Compare the dispute between the EU and the USA about the so-called “Safe-Harbour”-principle, available
online http://www.ita.doc.gov/td/ecom/menu1.html.
868
    Compare Ehmann/Tinnefeld, Part I, 3.3.3, p. 68; Ellger, RabelsZ 1996, 756
869
    See Schwartz, Iowa LR 80 (1995), 471seqq.
                                         Thomas Hoeren-Internet Law                                   301
ment) But it was never applied because the current US president George Bush rejected the
principles of the model. At present the EU and the USA are attempting to find a solution for
model contracts between the affected companies.



 'DWD SURWHFWLRQ LQ LQVROYHQF\

When dealing with the disillusionment about the advantages of e-commerce insolvency is an
important topic. At the same rapid rate as start-ups originally popped up, the first of them
started collapsing. Cash-burn, the burning of money, is not a successful economic strategy
viewed in the long term. But the question arises as to how such companies should be treated
in case of insolvency. Money is mostly no longer available. And apart from that, normally
there are not even other tangible assets. The most valuable assets are copyright-protected e-
commerce solutions and customer data. Especially the exploitation of customer data during
insolvency causes problems for data protection. For instance, in the USA the case toys-
mart.com created a stir, because the Walt-Disney company wanted to sell its customer data
due to an imminent insolvency. As a result of this currently the passing of special legal provi-
sions are under discussion in the US Senate and in the House of Representatives. The Senate
passed a draft of the Data Privacy Bankruptcy Act on March 22, 2001.870 In Germany it
causes problems if such data is subsumed under the particular protection of secrets of § 203
StGB. This is the case for the use of data by lawyers, doctors or credit institutions set up by
public law. In these cases the consent of the concerned person is necessary for the transmis-
sion of data; during insolvency the administrator of the insolvency proceedings has to obtain
the consent of the affected persons before selling the data. The same must be applied if for
example a firm of solicitors or a medical practice is to be sold. And the situation is similar for
sensitive data according to the new BDSG, for instance medical information, data about one’s
membership of labor unions, criminal offences or about one’s sex life (§ 26 BDSG). Because
of the prerequisite of consent it is difficult to exploit data during insolvency. Finally it must
be clarified how to asses and place a value on that data. Free-of-charge data like names and
addresses of data subjects does not have a high commercial value in contrast to detailed cus-
tomer data.




870
      See http://www.siliconvalley.com/docs/news/depth/priv031601.htm and the note in MMR 5/2001, p. XVI.
                                          Thomas Hoeren-Internet Law                                     302
Thomas Hoeren-Internet Law   303
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                                  Thomas Hoeren-Internet Law                              304
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In question is which given standards of conflict of laws decide on the applicability of the rules
of tort law. Art. 40 EGBGB is to be kept in mind here. According to this the aggrieved party
has the choice between the lex loci contractus and the lex loci solutionis (place of effect). The
aggrieved party has to exercise this choice before the beginning of the first hearing in court.
The lex loci contractus is regularly the place where the provider’s server is located. The place
of effect is everywhere where access to the homepage is possible; some courts refer to access
"in accordance with the law". This is similarly valid for criminal law. According to § 9 StGB
it is decisive here whether the success belonging to the elements of the rule of § 9 StGB has
occurred in Germany, regardless of the residence of the defendant. For this purpose the BGH
(Federal Supreme Court) convicted an Australian for incitement of the people, who was
spreading nazi-theories from Adelaide via the internet.871




871
   Decision by the BGH of the 12th of December 2000 – 1 StR 184/00, NJW 2001, 624; quod vide Vec, NJW
2002, 1535.
                                       Thomas Hoeren-Internet Law                                  305
,, 7KH 7'* LQ LWV UHYLVHG YHUVLRQ

The TDG is the result of a hard struggle. After tough negotiations between the ministries in-
volved, especially the Federal Ministry of Justice, Ministry of Research and Technology,
Ministry of the Interior as well as some further concerned circles, the first official draft of the
BMFT was introduced to the public on the 28th of June 1996, after a first pre-draft had been
introduced on the 6th of June. This was followed by a series of different internal documents,
which in part reached the outside world through “mysterious channels”. On the 8th of Novem-
ber 1996 the Ministerial concept was passed, which had been approved by the Federal Cabi-
net. But even with this the trembling over the further fate of the Act was not yet over. Not
until difficult parliamentary discussions took place, was the bill (meanwhile in a repeatedly
altered form872), adopted by the Bundestag and Bundesrat in June 1997 and finally able to
come into force on the 1st of August 1997.873


The TDG (Tele-services Act) contains rules for criminal and civil law which are to be applied
like a filter, before the application of special rules of liability. Nevertheless there are special
rules for media services in the Interstate Agreement on Media Services, to which some areas
of the online-providers also belong. In dispute is moreover the applicability of these regula-
tions to copyright, since the OLG Munich excluded an application because of the wording and
the history of § 5 TDG in a questionable decision.874


The regulations of the TDG concerning liability have been revised within the framework of
the so-called Act on the Legal Framework of Electronic Commerce (EGG). This Act, which
was adopted by the Bundestag at the beginning of November, converts the standards of the
EU-Directive concerning certain legal aspects of electronic commerce ( E-commerce Direc-
tive).875 It came into force in its essential parts on the 21st of December 2001.876 From here on
it will be mentioned in each case in comparison with the former legal situation.




872
    Recommended decision and report of the commission for education, research, science, technology and as-
sessment of consequences of technology, BT-DrS 13/7934 from the 11th of June 1997
873
    BGB1.I, 1870.
874
    Decision of 8th of March 2001 – 29 U 3282/00. Similar also Schaefer/Rasch/Braun, ZUM 1998, 451; Wal-
denberger, MMR 2001, 67.
875
    See Bröhl, MMR 2001, 67.
876
    Federal Law Gazette Part 1 No 70 of 20th December 2001, p. 3721. See Bröhl, MMR, 2001, 67; Härting, CR
2001, 271; Spindler, ZRP 2001, 203.
                                        Thomas Hoeren-Internet Law                                     306
The law distinguishes between three different providers (called: "Service-Providers"). Ac-
cording to § 5 Abs. 1 TDG (now: § 8 Abs. 1 TDG) providers shall be responsible in accor-
dance with the general laws for their own content, which they provide for use. They shall not
be responsible for any provision of third-party content for use unless they have knowledge of
that content and it is technically possible and can reasonably be expected of them to block the
use of such content (§ 5 Abs. 2 TDG). The section in the new TDG is similar, although more
complicated, regulated in § 11 TDG r.v. Providers shall not be responsible for any third-party
content to which the service providers only provide access (§ 5 Abs. 3 S.1 TDG). The legal
structure is now more differentiated through §§ 9 - 11 TDG r.v.



 7KH FRQWHQWSURYLGHU

Content-providers deliver information. If providers offer a website online they have to be re-
sponsible for its content. The Telecommunication Services Act (TDG) declares a reference in
§ 5 Abs. 1 to the general laws. The E-Commerce Directive and the Electronic Business Act
(EGG) do not change the legal situation (§ 8 Abs. 1 TDG r.v.). The basic principle remains
that content providers shall be liable in accordance with the general laws. Below we present
some thoughts on the general liability of content providers.


a) Contractual liability

Regarding contractual liability one can resort to the basic principles of German civil law
which constitute beside the warranty of quality also the liability for a breach of duty.
Besides this liability under the general principles the BGH (Federal Supreme Court) created
special rules regarding liability for information services. In the „Börsendienst“-case877 the
BGH stated that even the advertising letter in printed form of a stock exchange service is an
offer to enter into a separate consulting contract where the advertiser stresses the trustworthi-
ness and correctness of their information. In the years following this the BGH extended these
court rulings still further. According to this, no special agreement or even a contract in writing
are required for such a consulting-contract. On the contrary, in the opinion of the BGH a con-
sulting-contract is implicitly concluded when the information was obviously of substantial
importance and the basis of essential decisions by the user.878 Then the user can claim dam-
ages for a breach of duty, for which the general thirty-year limitation period is applicable.


877
      BGH, NJW 1987, 997
878
      BGH, NJW 1989, 1029; NJW 1986, 181
                                       Thomas Hoeren-Internet Law                               307
But these cases all involved an existing contractual relationship. In the "Börsendienst" case a
continuing contract like a subscription existed between the editor and the customer, that was
also characterized by a consulting element.879 Therefore one can only resort to the decisions
of the BGH regarding consultancy agreements when determining the relationship between a
user and the provider of non-gratuitous online information services. Admittedly § 280 BGB
makes allowance for contractual liability for breach of pre-contractual obligations. For in-
stance, if a savings bank provides investment recommendations resulting in an online banking
agreement, liability under § 280 BGB must be taken into consideration.


In the context of contractual liability the restriction of liability, i.e. in terms and conditions, is
more or less out of the question from the outset. The BGB does not make allowance for any
exclusion or restriction of liability for malicious behavior and warranties (§ 444 BGB), for
injuries caused to life, body or health (§ 309 Nr. 7 a BGB) and for intentional or gross negli-
gent behavior (§ 309 Nr. 7 b BGB). Additionally, the caselaw has interpreted § 307 [2] Nr. 2
BGB in such a way that exclusion of liability for intermediate and minimum negligence has
been ruled invalid if the duty that has been breached is essential in order to guarantee the
proper performance of the contract.880 Below we mention some agreements that will be ruled
invalid881:


      • “There shall be no liability for any defects whatsoever” 882
      • “There shall be no liability for negligent behavior of the seller” 883
      • “There shall be no liability for consequential harm caused by a defect, loss of data and
         lost profit”884
      • “There shall be no liability for damages exceeding …Euro.”885
      • “We exclude any liability, as far as legally possible”886

879
    see Hopt, Publication in Honor of Fischer 1979, 237; Köndgen, JZ 1978, 389.
880
    BGH, DB 1996, 1276
881
    compare to Schneider,a.a.O., Rn 0 167, who rightly states that the “clauses resticting liability of the provider
are still more `developing country´ than those of the software providers.
882
    Likewise the US-Disclaimers: “Limitation of Liability: You expressly understand and agree that Yahoo shall
not be liable for any direct, indirect, incidental, special consequential or exemplary damages, including but not
limited to, damages for loss or profits, goodwill, use, data or other intangible losses, resulting from the use or the
inability to use the service…”.
883
    OLG Köln, DAR 1982, 403.
884
    LG Bayreuth, DB 1982, 1400; Erman/Hefermehl, § 11 Rdn. 6.
885
    Such a clause is according to §11 no. 11 inoperative for the area of the guaranteed quality. For claims based
on c.i.c. or pVV it is admitted only if all damages that are typical for the contract and that are predictable are
covered (BGH, ZIP 1984, 971; BGH, BB 1980, 1011; BGH, NJW 1993, 335; Erman/Hefermehl,§ 11 no. 7


                                           Thomas Hoeren-Internet Law                                             308
    • “There shall be no liability for the slight negligent breach of a duty”887


Only a clause such as the following will be ruled admissible:


“There shall be no liability for the slight negligent breach of a duty. This does not include
duties which are essential in order to guarantee the proper performance of the contract, further
duties concerning life, health or body and duties affecting claims that can be brought under
the Product Liability Act. The same goes for the breach of a duty undertaken by our servants.”


Nevertheless it is questionable whether it is sensible and valid (taking into consideration the
principle of transparency arising under the rules concerning terms and conditions) to incorpo-
rate such a clause in a contract. Ultimately the supplier can be held liable for the breach of
essential duties and default and cannot exclude such liability. In the end, under a non-
fiduciary consultancy agreement the content provider owes the supply of complete and accu-
rate information. There is no possibility of escaping this liability by contractual agreement.


b) Liability in tort

One should bear in mind here the liability for the legality of the contents (for instance as far as
Copyright infringement is concerned) and for the correctness of the contents. For the legality
of the contents the special provisions concerning liability are applicable, for example


• § 97 UrhG (Copyright Act) for infringement of copyright
• §§ 14, 15 MarkenG for domain issues
• § 7 BDSG for breach of data protection or
• § 1 UWG for illegal marketing actions on the internet.


For wrong contents, for content providers a liability in accordance with the Product Liability
Act or in the scope of § 823 [1] BGB (German Civil Code) will be considered. Especially the
jurisprudence concerning liability of the publisher of print media could be referred to. In this
way the BGH (Federal Supreme Court) answered a question concerning the liability of the


AGBG, no. 15). But it can hardly be ascertained, when this is actually the case; therefore this clause is in any
case too dangerous.
886
    such an anchor is inadmissible; it counts as an invalid clause. See BGH, NJW 1987, 1815; NJW 1985, 623,
627; OLG Stuttgart, NJW 1981, 1105.
887
    BGHZ 49, 363.
                                          Thomas Hoeren-Internet Law                                         309
publisher of information services in the affirmative, as long as they - as a consequence of
gross neglect of the duty of care – circulate incorrect investment recommendations and due to
this damage occurs to the customer.888 However this case is distinguished by the fact that a
subscription-like permanent contract existed between the publisher and customer, that was
characterized by consulting elements.889 And so one can also only resort to this decision for
the relationship of a user to a provider of non-gratuitous online information services.


Apart from contractual obligations liability only comes into consideration when there is an
infringement of an absolute legal interest. The BGH pointed out in the “Kochsalz” decision,
that the author (as well as under certain restrictions the publisher) is responsible for misrepre-
sentations in medical publications. In the case of medical information there are indeed often
injuries to body and health, both protected under § 823 [1] BGB. Therefore when providing
health tips and medical advertisements a high liability risk can be expected. This similarly
applies to the download of software via the internet. When this leads to the loss of data, a vio-
lation of property rights, concerning the no-longer flawless use of the user’s hard disk, exists.
But the provider can escape from this liability by pointing out a predominating contributory
fault of the user ( § 254 [1] BGB), because the damages obviously result from the absence of
data protection.


In this area clear warnings on the web site are of great importance:
“We shall not be responsible for the correctness and completeness of the information pro-
vided on this website.”



 7KH DFFHVV SURYLGHU

Access providers, who provide access to the internet, are according to § 5 [3] TDG ( Teleser-
vices Act) not responsible for the offers accessible in this way. Nevertheless, by means of
complicated constructions (Liability under § 5 [4] TDG and the general criminal law with
knowledge of illegal contents890, joint perpetration with the actual host providers891) it has
been attempted to make access providers responsible for content saved on servers other than
their own. These views, which contradict the straightforward intention of the legislator, have

888
    BGH NJW 1978, 997
889
    see also Hopt, Hopt, Publication in Honor of Fischer 1979, 237; Köndgen, JZ 1978, 389.
890
    Discontinuance order of the Federal Public Prosecutor, MMR 1998, 93 (DFN- association) with concurring
annotation by Hoeren.

                                       Thomas Hoeren-Internet Law                                     310
not been able to gain acceptance so far, the sensational conviction of the former CompuServe
manager by the AG Munich was rightly reversed.892 The exemption from responsibility inci-
dentally also applies to the content saved on proxy servers; because the act explicitly excludes
an automatic and temporally limited holding of third-party contents from liability ( § 5 [3]. s.
2 TDG).


Since January 2002 Art. 12 of the E-Commerce- directive as well as §§ 9 and 10 TDG r.v.
apply. Pursuant to this the service provider is released from responsibility for the conveyance
of information (§ 9 TDG r.v.) However a conveyance is only given where the conveyance of
user information or the procurement of access to a communications network is concerned.
The conveyance must not have been induced by the service provider itself; only passive,
automatic procedures are privileged (§ 42 of the directive). Special provisions regulate cach-
ing (§ 10 TDG r.v.). Especially problematic is the note in § 8 [2] S.2 TDG r.v., whereby obli-
gations to remove or block under general law remain unaffected. Through this note, integrated
in contradiction to the directive, an ill-defined liability is again conjured up via the back-door.
Here it is especially unfortunate that the references to the technical possibility and the eco-
nomic reasonableness of the block formerly embodied in the TDG are no longer included in
the law. One could interpret this as an unrestricted obligation on the access provider to block,
on the basis of an official or judicial restraining order. However here the basic principle
„immpossibilium nemo obligatur" applies here too. If an access provider is unable to block, it
cannot be required to do so. Attempts made for example by the district government of
Düsseldorf893, are therefore pointless, because a DNS-blockade for example can easily be
circumvented simply by enlisting a different domain server; for example the following name
servers could be used


• 194.246.96.49 (dns.denic.de)
• 194.246.96.25 (dns3.denic.de)
• 194.25.2.131 (dns02.btx.dtag.de)




891
    AG Munich, NJW 1998, 2836 (CompuServe) = MMR 1998, 429, concurring annotation by Sieber.
892
    LG Munich, MMR 2000, 171
893
       see     Stefan     Krempl,       Blocking      of     the    internet  for    „Fritzchen   Doof“,
http//www.heise.de/tp/deutsch/inhalt/te/11175/1.htm. as well as Mankowski, MMR 2002, 277.
                                         Thomas Hoeren-Internet Law                                 311
 7KH KRVW SURYLGHU

More difficult is the legal position concerning third-party content that providers make avail-
able for use (so called host providing). According to the wording of § 5 [2] TDG (“only if...")
they are in principle not liable for this. The only exception is when the contents are known to
the provider and when it is technically possible and reasonable for it to prevent dispersion. In
accordance with the official rationale of the legislator concerning § 5 [2] TDG liability shall
only apply when a provider knowingly provides the third-party illegal contents. Initially the
regulation is formulated very extensively, as far as the distinction between access and host
providers is concerned. Hence the provider would also be responsible for all newsgroups that
are automatically saved on its server. In the end, a distinction between one’s own offers and
those made by others is very difficult to make. Is the offer of a subsidiary company of the
Deutsche Bank AG own or third party content? Is the line between both categories determin-
able by applying rules of company law?


Similar concerns exist concerning the formulation of the mental elements. The TDG focuses
on the mere knowledge of the contents. In this way the liability of service providers should be
limited to intentionally committed offences. In doing so the legislator counteracts its own ef-
forts to oblige providers to exercise company-internal or group self-control. Because if the
mere knowledge of the content suffices as the mental element, no one will have an interest in
authorizing personnel to examine the online offerings. Instead, everyone will abstain from any
self-checking, true to the motto: didn’t see anything, didn’t hear anything. The LG (Regional
Court) Munich has also recognized this problem. In its view the official interpretation of Art.
5 [2] TDG would lead to the circumvention of Art. 14 GG (Constitution of the Federal Re-
public of Germany), as well as the regulations in Art. 1, 10 and 14 WIPO-contract. Even
"conscious looking the other way" would lead to the exclusion of liability894. This would be
unacceptable. The Regional Court demands the adoption of duties to examine concerning the
circumstances producing the illegality. It would have also been possible to affirm the duty to
examine at least in those cases where a violation of a criminal law suggests itself (for example
when labelling a newsgroup "alt.binaries.child-pornography"). Such an examination duty
concerning the blatant danger of abuse would have also complied with the prevailing legal
situation in the civil and criminal law. Art. 15 [1] of the E-commerce directive however ex-
plicitly refrains from including a duty to examine.


894
      LG Munich I.,decision of 30. March 2000 ( not res judicata), MMR 2000, 434
                                          Thomas Hoeren-Internet Law                        312
Apart from this, the mere knowledge of the content is not sufficient for the affirmation of a
legally relevant intentional offence. For one thing civil and criminal law do not content them-
selves with knowledge, but demand rather a voluntary element. You not only have to know
that you are likely to fulfil every single element of the tort, you also have to show the actual
willingness to do so. The legislator seems to be willing to dispense with the requirement of
actual willingness.


For the civil lawyer the lack of any kind of consideration concerning the awareness of the
illegality is also conspicuous. The mere fact that a staff member of a data processing centre
has sighted a newsgroup does not automatically mean that he or she can evaluate the contents
correctly, i.e. as an infringement of a right. At least as far as civil liability is concerned, intent
not only implies the knowledge of and willingness to commit the offence, but also the aware-
ness of the fact that an offer violates the applicable law. Given that this evaluation is difficult
to make, especially in the still blurry multimedia law, some consideration of this would have
been preferable. In any case the legislator only wants to affirm responsibility when a service
provider knowingly keeps third party illegal contents ready on call895. However, in this it is
not clear how the illegality and the intent are related to each other. In Art. 14 [1] of the E-
Commerce directive this question is regulated in a better way, whereby in the case of com-
pensation claims it is necessary that the provider is aware of the facts and circumstances from
which the illegallity of the information becomes apparent.896
It should at least be clear that the TDG is not only supposed to recapitulate applicable law, but
also to alter the liability system of the civil and criminal law concerning online-services. If
this is the case though, then the question of the temporal dimension of the law will also arise.
At no point does the law contain regulations concerning the question of whether the provi-
sions regarding liability are also applicable to old cases. Therefore under § 2 [3] StGB the
new liability regulations of the TDG, as the milder regulations, are in general applicable in the
scope of criminal law.


A clear demarcation between own and third party contents on the web site is important: “
You are now leaving our internet supply. The respective providers are responsible for the con-
tents of the following pages. As far as this is concerned we assume no liability.”

895
      Likewise the reasoning of the draft by the head of section of 8th November 1996.


                                            Thomas Hoeren-Internet Law                            313
 /LDELOLW\ IRU K\SHUOLQNV

The classification of hyperlinks is difficult897. This is because they do not exactly fit into one
of the three groups established in the TDG. The E-Commerce directive does not provide rules
regarding the liability for hyperlinks either. Firstly, one has to bear in mind that a hyperlink as
such can never cause liability. A hyperlink is just a technical reference within an HTML-
document. It depends much more on the statement connected with the hyperlink– taking into
consideration the textual context in which such a link is placed. The Local Court Berlin-
Tiergarten898 stressed – as the first German court – that the liability of the person who placed
the link depends upon the overall statement made by the hyperlink. The case which the court
of Berlin Tiergarten had to decide dealt with the Bundestag member Angela Marquardt who
had placed a link to a Dutch server on which the prohibited magazine “Radical” was located.
The federal attorney general had accused the Member of the Bundestag of assisting the forma-
tion of terrorist organizations and in the link to the magazine he saw a crucial contribution of
assistance. The Local Court did not follow this view. On the contrary, they held that only one
specific issue of the magazine “Radical” was criminally relevant. But no ascertainments could
be made concerning the question if and primarily when the accused obtained knowledge of
the inclusion of the illegal issue. The mere continuing existence of the link at any rate could
not justify culpability if it could not be positively ascertained that the accused knowingly and
willingly perpetuated the link with full knowledge of its contents and the existence of the is-
sue. With a view to imposing compliance with the law, the failure to regularly examine one’s
own link can only lead to an allegation of negligence, which however is not relevant here. The
(brief) judgment of the Regional Court refers to the decisive question of what sort of a state-
ment a link can be. If you declare your solidarity with the illegal content of another, by means
of placing a link, then you should be dealt with as if you were a content provider.899 Thus in
this case § 8 [1] TDG is applicable; the person who placed the link is liable for the linked con-
tents as if they were his or her own. The case is to be judged differently when someone does
not adopt the third party contents as his or her own. Someone who (for example out of an aca-


896
    In my opinion wrong, is the perception of Tettenborn among others, addendum to K&R 12/2001, 1, 32, ac-
cording to which a liability for gross negligent lack of knowledge was implemented through this formulation.
897
    See i.e. LG Hamburg, judgment of 12 May 1998, CR 1998, 565 = NJW-CoR 1998, 302; AG Berlin-
Tiergarten, judgment of 30 June 1997, CR 1998, 111 with comments by Vassilaki.
898
    CR 1998, 111
899
    See on this the case of the OLG Munich, in which someone combined links with the naming of names,
whereby the linked content contained defamation in the sense of § 186 StGB; decision of 6.July 2001, ZUM
2001,809.
                                            Thomas Hoeren-Internet Law                                       314
academic interest) places a link to third-party content without indicating any kind of solidarity
with it, is to be judged like an access provider, hence § 9 TDG is applicable. In such a case
liability is regularly excluded. Besides, in criminal law one must pay attention to the basic
principle “in dubio pro reo”. Therefore in case of doubt there is no liability for the placing of
links to criminally relevant contents – the same conclusion that the County Count Berlin-
Tiergarten came to.


Different from this is the basic conception of civil law, which is based on the principle “in
dubio contra reum”. Here the landmark decision is one by the Regional Court of Hamburg.900
This was concerned with the establishment of a link-compilation to so-called “Steinhöfel-
Hassseiten” (“we hate Steinhöfel pages”). The attorney affected claimed defamation against
the person who placed the link. The Regional Court of Hamburg convicted the defendant,
because he did not sufficiently dissociate himself from the defaming expressions made by
third parties and therefore adopted these as his own by placing the link. But here also the
caselaw has become more and more sophisticated. For example a link from a private internet
provider to a third party website should not create liability.901 For links to downloads liability
is affirmed.902 The liability can even go so far that one is held liable for encouragement of
third party competition for a link to the websites of American parent companies which are
contrary to fair competition under German law.903


This differentiated view satisfies the prevailing opinion concerning the old version of the
TDG.904 Only a few formerly attempted an analogous application of the old § 5 [2] TDG,
which would amount to the responsibility of the person who placed the link to block the con-
tents from the time when he gains knowledge of it and in default to approve liability.905 Oth-
ers basically wanted to subdue hyperlinks under the scope of application of § 5 [3] TDG and
by those means circumvent liability for links.906 Which way the legal opinion will develop
concerning the new TDG remains to be seen.




900
    Decision of 12. May 1998, CR 1998, 565.
901
    OLG Schleswig, decision of 19. December 2000, K&R 2001, 220.
902
    LG Braunschweig, decision of 6. December 2000, CR 2001, 47.
903
    Decision of the High Court Austria of 19. December 2000 – 4 Ob 225/00.
904
    See Engel/Flechsig/Maennel/Tettenborn, NJW 1997, 2981, 2985; Pichler, MMR 1998, 79, 87; Spindler,
MMR 1998, 3193, 3198.
905
    See similar Waldenberger, MMR 1998, 124, 128 f.
906
    Eichler/Helmers/Schneider, RIW Beilage 12/1997, 23, 25; Koch, NJW-CoR 1998, 45, 48; Koch, CR 1997,
193, 200 seqq.
                                          Thomas Hoeren-Internet Law                              315
For search engines the new EGG does not contain any directly applicable rules. The link itself
cannot be subsumed under § 8 [1] TDG, because of the lack of own contents. The short de-
scriptions which are provided next to the simple link are usually adopted from the linked
website, so that third party contents are concerned; § 8 [1] TDG is likewise not applicable to
third party contents. The application of § 9 [1] TDG also fails as far as search engines are
concerned, because regarding the purpose of search engines they are not aimed at the pro-
curement of accessibility. The operator of a search engine does more than the simple access
provider; especially because there is a lack of a merely marginal possibility of influence,
which is characteristic for access provision. Therefore the only thing conceivable is an analo-
gous application of § 10 TDG.



 /LDELOLW\ IRU RWKHU LQWHUPHGLDULHV

The jurisprudence is also taking into consideration liability regarding other intermediaries.
Liability of the provider of a search engine, perhaps for rights to restrain in the field of trade-
mark law, are not going to come into consideration.907 This is because search machine provid-
ers only place entries in a register and therefore are not under an obligation to examine them,
unless an infringement is evident.


An online auction house can be held liable for the information contained in the offers of third
parties as if it were its own according to the LG Köln.908 In the case at hand Rolex had com-
plained about the fact that Ricardo offered for sale replicas of Rolex watches infringing
trademark law. Ricardo saw itself as a host-provider, which need not act until informed by
Rolex. However the Regional Court followed the plaintiff and regarded the offers as Ri-
cardo’s own contents, given that at least the headings of the offers made by Ricardo are pre-
sented as own content. Own content is also given when an entanglement exists that allows the
host-provider and the third party contents appear as a single entity from the user’s viewpoint.
In this regard Ricardo as content-provider was subject to a restraint order, due to an infringe-
ment of trademark law.




907
      LG Munich, decision of 20. September 2000, MMR 2001, 56.
908
      Decision of 31. October 2000, CR 2001. 417.
                                          Thomas Hoeren-Internet Law                           316
In the meantime this decision has been rescinded by the OLG Köln.909 For an infringement
within the scope of § 14 [2] no. 2 MarkenG there is a lack of risk of confusion, because there
are clear indications as to the plagiaristic character. In addition the respondent is not the cor-
rect party against whom the claims may be asserted. This does not result from the TDG. The
filter function of § 5 TDG fails where provisions regarding liability are concerned that are
based on higher-ranking sources of law, to which national law also belongs when it converts
EC- directives. The national legislator cannot modify or even completely exclude liability
which results from the law of the European Community, by means of other national regula-
tions. § 5 TDG is not applicable to claims which arise from an infringement of trademark law
according to the MarkenG. When examining the requirements of the MarkenG one realizes
that the auctioneers do not “utilize” an indication similar to the trade mark. At most a liability
as an accessory to the infringement comes into consideration. However in regard to this there
is a lack of deliberate co-operation because the auctioneers, who the claim was brought
against at that time, did not gain knowledge of the contents in dispute. The respondents used
an automated procedure; technically it is not yet possible to install pre-emptive software,
which prevents offers with contents infringing the law from appearing online prior to the first
publication of the offers. The auctioneers can only take notice during the conceivably short
period between the entering of the command to activate by the user and the conversion of it
on the website. In this respect a fiction of taking notice is concerned, which is not sufficient to
constitute a liability for disturbance.



,,, 7KH 0HGLD 6HUYLFHV 6WDWH 7UHDW\

Differences regarding the liability elements can be found in the Media Services State Treaty.
Certainly the federal states tried to copy the TDG to the greatest possible extent. But they
could not dispense with an additional power to block for the benefit of the state authorities (§
5 [3] S.2 i.V.m. § 18 [3] MDStV). Far more difficulties are created by the provisions concern-
ing the range of § 5 Media Services State Treaty – especially against the background of the
provisions regarding the legislative powers of the Federal Government and the States, which
has been pointed out by the States. The demarcation of Federal and State powers in the field
of online services is a difficult subject, which led to a number of controversial discussions
during the preparations for the IuKDG. Due to a compromise paper, adopted in June 1996, the


909
   Decision of 2. November 2001, MMR 2002, 110 with annotations by Hoeren = CR 2002, 50 with annotations
by Wiebe = K&R 2002, 93 with annotations by Spindler 83.
                                      Thomas Hoeren-Internet Law                                     317
States claim the authority to regulate Media Services for themselves. According to § 2 [2]
no.4 MDStV call services, through which text, tone or picture presentations are transmitted on
demand from electronic memory for usage, also come under this scope; services which are
substantially based on the exchange of individual performances or the pure transmission of
data are subject to exceptions. This definition does not correspond to the definition of tele-
services in the TDG (§ 2 [1] TDG). Nevertheless this issue does not come under the scope of
the treaty. It is of more relevance that under the definition of the Media Services State Treaty
a number of online-services must be qualified as media services and thus are subject to the
State Treaty. This goes for electronic research journals, a lot of newsgroups and content-
orientated websites.
Although the states under the Interstate Agreement have now adopted the federal rules of li-
ability they do not have power in criminal and civil law issues (Art. 74 Nr. 1 GG). The rules
regarding liability determined in the Media Services State Treaty can therefore only be ap-
plied without recourse to the areas of civil and criminal law.910 Instead they only penalize
offences against the State Treaty itself. Theoretically an analogous application of § 5 TDG
would be conceivable. Admittedly the TDG expressly prohibits such an analogy in § 2 [4] Nr.
3 TDG: Under this provision the law is not to be applied to media services.
As a result one must consider the application of standard rules of civil and criminal law re-
garding the area of media services. As the standard rules provide for a duty of inspection in
the case of obvious suspicious facts the rules of liability established in the Media Services
State Treaty differ from those provided for in the TDG. Here a clarification in practice – espe-
cially by the judiciary - becomes essential in order to establish a uniform system of liability
for all online services. The adoption of the E-Commerce-Directive did not result in the federal
states giving in. Presently an amendment of the state treaty is in progress.



,9 ,QVXUDELOLW\

The liability risk leads to the question as to how far such risk is insurable. Information on if
and how single insurance companies offer such policies was not available. Furthermore it is
not known if companies already have concepts in preparation. Therefore we can only fall back
on the General Liability Conditions (AHB)911 in order to analyze the applicability of the gen-



910
    Moot point, see: Pichler, MMR 1998, 79, 80 f.; Gounalakis, NJW 1997, 1993, 1995; other opinion Bettinger/
CR 1998, 545, 547
911
    Printed in: Dörner, Allgemeine Versicherungsbedingungen, 2nd edition Munich 1996, under Zi 11.
                                         Thomas Hoeren-Internet Law                                      318
eral manufacturer’s liability insurance in such cases.912 Basically liability insurances cover
claims arising from tort law, i.e. claims under § 823 [1] BGB. For claims for damages arising
under a contract, which have been insured against, the coverage of the performance of con-
tracts is excluded (§ 4 [1] Zi 6 [3] AHB): the content provider regularly bears the risk that
information offered on call is correct and has been obtained legally. Contractually created
liability which goes beyond standard liability as stated by law (i.e. in cases of warranted char-
acteristics or additional consultancy agreements) cannot be insured. On the internet the exclu-
sion of liability regarding damaging events that occur in foreign countries (§ 4 [1] Zi 3 AHB)
is important. Coverage for violations of intellectual property or personal privacy in foreign
countries cannot be achieved under manufacturer’s liability insurance. Finally the insurance
company cannot be held liable for damages which are not bodily injury or property damage (§
1 [3] AHB), i.e. in cases of operational breakdowns or loss of data. Nevertheless such pecuni-
ary loss might be typical in the area of an online business. The incorrectness of information
does not lead to immediate bodily injury or property damage. Therefore the extension of in-
surance coverage to providers is essential.913 Such an extension should include liability for
special agreements in case of failure to perform and cases where losses occur in foreign coun-
tries and pecuniary losses.




912
    See also in general Schmidt-Salzer/Otto, Versicherungsrecht, in Kilian/Heussen (ed.), Computerrechtshand-
buch, München 1997, chap. 112; Schulze Schwienhorst, CR 1995, 193.
913
    In this context one might consider the usual co-insurance of the violation of the BDSG; see Schmidt-
Salzer/Otto (above), chapter 112 Rdnr. 37 f.
                                         Thomas Hoeren-Internet Law                                       319
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„Give me a stable base and I will move the earth“ - this statement by Archimedes is espe-
cially applicable to internet law. One may be able to address problems of unfair competition
on the internet by applying – for example – domestic German unfair competition law, as
roughly explained above. But for Internet Service Providers the territorial limitations of na-
tional-based legal systems do not apply.914 A website can be made available for access from
any kind of server anywhere on this planet, while the geographical placement of the server
does not influence the jurisdictional possibilities to intervene. This faciliates the establishment
of virtual safe-havens from prosecution on the internet – a caribbean island may be used as a
base for sending spam mails or as a marketplace for offering and selling restricted medical
drugs. Germany-based companies operating a website are faced with the question of whether
adherence to German law is sufficient or if – due to its accessibility in Switzerland and Aus-
tria – the laws of these countries apply additionally. The difficulties of the issues at stake are
most obvious in a recent decision of the Tribunal de Grande Instance de Paris whereby the
French court ordered the American company Yahoo! Inc. to block the accessibility of its web


914
      See: Hoeren, WM 1996, 2006; Osthaus, AfP 2001, 13.
                                        Thomas Hoeren-Internet Law                             320
site containing nazi-related material for French users by installing technical measures on its
US-based servers.915 Meanwhile in California, a US District Court has rejected the notion to
enforce the French court decision, noting it conflicts with the protection of freedom of speech
as laid down in the 1st amendment to the US constitution.916


The problems involved are in all cases related to questions of international civil procedure
law. This field of law determines whether a case at hand involves sufficient (minimum) con-
tacts to the forum state in order to decide the case before the forum – in other words, issues of
international jurisdiction of national courts.917 International civil procedure law further deals
with the reccognition and enforcement of foreign judgments in a forum state. Distinct from
private international law,918 it therefore directly addresses only questions of procedural law..
But international procedure law may also indirectly influence the applicable substantive law
and thereby the outcome of the case: This is so because the applicable choice of law rules and
thus the applicable substantive law depend on the determination of international jurisdiction.
In cases with several potential jurisdictions the plaintiff has the opportunity to – by choosing a
(favourable) forum – determine the choice of law rules applied by the forum and thereby the
relevant substantive law („forum shoppping“).
In crossborder lawsuits relating to the internet activity of one of the parties especially issues
of international jurisdiction pose difficulties. The potential places to sue extend from the place
where the server is located to any place in the world where the activity in question can be ac-
cessed. Jurisdictional rules developed for the Offline world usually do not offer a sufficient
solution for online-related disputes and in a lot of instances they carry the potential for non-
foreseeable jurisdictional risks. This the more applicable because jurisdictional rules differ
from country to ccountry and since an international harmonization cannot be expected in the
near future.919


915
    Tribunal de Grande Instance de Paris, verdict of 20. November 2000, K & R 2001, 63 (with remarks by
Hartmann)
916
    US District Court for the Northern District of California, decision of 7. November 2001 – C-OO-21275 JF in
the matter Yahoo v. LICRA, MMR 2002, 26 (with remarks of Mankowski)
917
    As a rule, each state determines autonomously, in which cases its courts exercise juridiction. But as far as
multi- or bilateral agreements address matters of international jurisdiction, these agreements supersede national
rules on jurisdiction.
918
    In Private International Law one tries to find the national law applicable to a case with foreign contacts by
choosing from several national laws the one which has the closest territorial connection to the case at hand.
Thus the question will be which national law (including its rules of private international law) is most suited to
deal with the case at hand.
919
    While the Brussels Convention and since March 2002 its follow-up, the so-called Brussels Regulation, har-
monise the jurisdictional rules in civil and commercial matters on an EU wide level, the attempts to agree on
globally applicable rules in the framework of the Hague Convention on jurisdiction and enforcement and recog-
nition of judgments in civil and commercial matters have shown little success.
                                           Thomas Hoeren-Internet Law                                         321
, -XULVGLFWLRQ IRU LQWHOOHFWXDO SURSHUW\ LQIULQJHPHQWV

Firstly one needs to determine whether a court is geographically competent to decide a case.
In this respect, one needs to distinguish between strictly national cases and those involving
crossborder contacts.



 ,QQHU*HUPDQ FDVHV

In cases with no relevant contacts outside Germany (inner-German cases) the rules of the
German Civil Procedure Act (ZPO) apply. According to sec. 12 ZPO the defendant is to be
sued at the courts of his domicile (so-called general place of jurisdiction). In cases involving a
tort or delict – for example in Copyright or Trademark infringements or defamation – the
plaintiff can alternatively sue before of the courts where the harmful event occured. This place
is both the one where the infringer acted – in the online world, the server location920 – and
also the place of effect. Different opinions exist as to the determination of the place of effect
in an online environment. Some courts hold each place, where the webpage can be accessed
from as the relevant connecting factor and thereby allow the plaintiff to sue at geographically
any court within Germany. Lawyers can take advantage of this fact by carefully choosing the
„correct“ court according to its prior judgments. Other courts try to limit jurisdictional compe-
tence by determining whether a webpage is targeted or directed to the residents of the fo-
rum.921
Both in Unfair Competition and in Copyright cases procedural exceptions apply: According to
sec. 104 of the German Copyright Act (UrhG) all copyright-based claims have to be brought
before the civil courts. Many of the German states (Bundesländer) made use of the authorisa-
tion set forth in sec. 105 UrhG to determine a particular local court or higher (regional) court
to deal with copyright matters exclusively. Such exclusive jurisdictions are further set forth in
the German Unfair Competition Act (sec. 24 UWG) which declares the court where the de-
fendant has its business establishment (sec. 24 [1] UWG) or where the harmful event occurred
(sec. 24 [2] UWG) to be competent. In this regard these rules are similar to those of the gen-
eral Procedure Law (ZPO). But as to the determination of the place of the harmful event in



920
    This is also disputed – others view the domicile of the infringer as relevant; see Koch, CR 1999, 124;
Mankowski, RabelsZ 1999, 257, 262; Pichler, in: Hoeren/Sieber (ed.), Multimediarechtshandbuch 31/121.
921
    Decision of 4th of April 1997 - 34 O 191/96, WM 1997, 1444.
                                           Thomas Hoeren-Internet Law                                  322
Unfair Competition Law, the relevant jurisprudence in advertisment cases takes the factual
effects of the advertisements within the court’s district into account.922



 ,QWHUQDWLRQDO MXULVGLFWLRQ

The general jurisdictional rules of the German Civil Procedure Law (ZPO) are applied analo-
gously to determine international jurisdiction. This is true in particular for the principle of the
place of the harmful event set forth in sec. 32 ZPO. But only in cases relating to defendants
domiciled outside the EU may the ZPO rules be applied in analogy.923


a) Brussels convention and Brussels regulation

If the defendant is domiciled in the EU, until March 2002 the Brussels Convention on Juris-
diction and Recognition and Enforcement of Judgments in Civil and Commercial Matters was
relevant. Since that date, the initially mentioned Brussels Regulation924 has replaced the Brus-
sels Convention. Both the Brussels Convention and the new Regulation allow the plaintiff to
sue before the courts where the defendant is domiciled and where the harmful event took
place. In matters relating to a tort or delict, Art. 5 [3] of the new Regulation refers to the
“place where the harmful event occurred or may occur”. Again, the plaintiff has the choice
between the place where the infringing act took place or where its effects are felt. In online-
related disputes, the place of effect is determined – just like in sec. 32 ZPO – according to the
places which the homepage is targeted or directed at (thereby excluding jurisdiction based on
„incidental“ online accessibility).925 With respect to damage claims one needs to take into
account that according to the Shevill-case926 decided by the European Court of Justice, the
full damages may be claimed only at the place where the infringing activity was conducted. In
front of the court of the place of effect, one may only claim the amount of damage which
arose at that place (here the question remains how to calculate that exact portion of damage).


In matters related to intellectual property the place where the harmful event occured in the
meaning of Art. 5 [3] of the Brussels Regulation relates only to places where at least a portion

922
    LG Potsdam, Decision of 4th of July 2001, MMR 2001, 833. See BGH, GRUR 1971, 153 - Tampax; WRP
1977, 487
923
    In relation to cross-border disputes with defendants domiciled in Switzerland the Lugano Convention of Sep-
tember 16th 1988, which is almost identical to the Brussels Convention, applies.
924
    Council Regulation (EC) No. 44/2001 (of December 22nd 2000 on Jurisdiction and the Recognition and En-
forcement of Judgments in Civil and Commercial Matters), in part printed in GRUR 2002 Int. 2002, 414
925
    Also of this opinion is Schack, MMR 2000, 135, 138.

                                        Thomas Hoeren-Internet Law                                         323
of the IP infringing conduct took place.927 Whether an act can serve as a basis for the juris-
diction of a national court will be determined by that court according to the substantive (IP)
law applicable by virtue of its rules of private international law. For intellectual property in-
fringements the courts in most countries follow the country of protection (lex loci protec-
tionis) choice of law rule, designating the law of the country where protection is sought to be
applicable.928 If – for example – one brings an action before a German court due to the online
accessibility of IP-protected content in Germany, the court will determine jurisdiction on the
basis of Art. 5 [3] of the Brussels Regulation according to the question of whether the acces-
sibility in Germany may amount to an infringing act according to substantive German (IP)
Law. Whether or not a particular conduct justifies jurisdiction of the forum courts will be de-
termined according to the substantive IP Laws of the country for which protection is sought
and thereby in most instances according to the substantive IP law of the forum state. As for
the utilisation of IP-protected content on the internet, this means that the substantive law of
the country of protection determines whether the online accessibility (in that country) as such
is a sufficient basis for jurisdiction according to Art. 5 [3] of the Brussels Regulation.
Within the EU, Art. 3 of the new Copyright in the Information Society Directive929 explicitly
covers the act of “making (protected content) available to the public (...) in such a way that
members of the public may access (that content) from a place and at a time individually cho-
sen by them” – thereby defining both the making available on a server and the (worldwide)
online availability as conduct subject to the authorization of the rightholder. This interpreta-
tion is supported by recital 25 of the Directive according to which Art. 3 covers the right to
“make available to the public copyrighted works or any other subject matter by way of inter-
active on-demand transmissions”.930
In the field of trademark and patent law the question arises whether the accessibility of a do-
main name consisting of a trademark-protected term and – especially with respect to the US –


926
    ECJ, C-68/93, Slg. 1995, I 417. See further Mankowski, RabelsZ 1999, 257, 274 f.
927
    Since Intellectual Property – as opposed to real property – is not situated in a certain place, no place of effect
distinct from the place of conduct exists. The relevant connection factor is therefore the place where one’s con-
duct conflicts with the rights exclusively granted to the rightholder.
928
    This worldwide dominant choice of law rule derives from the underlying principle of territoriality whereby an
Intellectual Property right is limited to the territory of the country granting the right. Only on that territory can
the IP right be infringed. This means that an IP right granted by the German Legislator may only be infringed by
conduct taking place inside Germany. The principle of the country of protection is codified in Art. 5 [2] of the
Berne Convention.
929
    Directive 2001/29/EC of the European Parliament and the Council on certain aspects of copyright and related
rights in the information society (May 22nd 2001)
930
    Even if one views the right of making available as merely covering acts in the country where the material is
uploaded onto a server, one would arrive at the same result (jurisdiction in all countries where the material is
accessible) by attributing further acts of reproduction by end-users (browsing, RAM copying, downloading) to
the person making the material available.
                                            Thomas Hoeren-Internet Law                                            324
the online utilization of a patent-protected method of doing business may serve as sufficient
grounds for jurisdiction in the countries where the trademark or patent rights exist.
As for the use of a trademark term protected in Germany within a domain name with the
„.com“ gTDL of a US company, the Berlin Court of Appeal (Kammergericht)931 held the
mere accessibility of the protected term in Germany sufficient to exercise jurisdiction for the
trademark infringement suit brought by the German trademark holder. Some scholars disagree
and want to require a further connection to the forum state than the mere technically deter-
mined accessibility932 – one has to see whether these concepts will be accepted by the courts.
For companies which utilise IP-protected content on their website, the jurisdiction according
to Art. 5 [3] of the Brussels Regulation has some frightening results: They run the risk of be-
ing sued anywhere in the world for damages933 and for restraining orders as soon as some-
body claims their website infringes upon his/her intellectual property rights.


The jurisdiction based on this concept of accessibility is awkward to use. According to this
concept, German courts have jurisdiction in several internet related matters without having
the opportunity to deny their competence on the basis of the anglo-american „forum non con-
viens“ doctrine.934 The particular problem of the German rules of International Civil Proce-
dure Law therefore is not exorbitant rules with excessive grounds for jurisdiction but the fact
that no real possibility to deny international jurisdiction exists. But in the meantime some
European Courts have tended to interprete the jurisdictional rule of the Brussels regulation
narrowly: For a long time potential IP-infringers had the ability to prevent the jurisdiction of
other European Courts under the lis pendens doctrine by bringing an action for a (negative)
declaratory judgment before the Brussels courts (referred to as a “Brussels torpedo” as the
courts there had the biggest workload and thus took the longest time to reach a decision). The
Brussels court of second instance put an end to this practice in its decision on the 20th of Fer-
bruary 2001 by holding Art. 5 sec. 3 inapplicable to claims for declaratory judgments of no
infringement (therefore courts in Brussels are no longer considered competent to handle these
cases).935



931
    KG Berlin, decision of the 25th of March 1997 – 5 U 659/97, see CR 1997, S.685; in this case jurisdiction was
based on the identical rule in sec. 32 ZPO. The court found that the website was puposely made available to
forum residents.
932
    See for example: Koch „Internationale Gerichtszuständigkeit und Internet“, CR 1999, S.121; A lot of scholars
require an activity which is targeted at a certain forum.
933
    Whereby however one may only claim the amount of damages caused in that forum state.
934
    Compare also the “special circumstances test in Japanese Law (e.g. in D. Kono vs. Taro Kono)
935
    see http://www.info2clear.com/EN/downloads/wipr6.pdf
                                            Thomas Hoeren-Internet Law                                        325
b) The Hague Convention

Lately issues of international jurisdiction in the online context are being discussed in the con-
text of the proposed Hague Convention on Jurisdiction and Foreign Judgments in Civil and
Commercial Matters. In September 1999, a first version of the proposed convention was
drafted by a working group. This version was the basis for discussions at the first part of a
diplomatic conference in June 2001.936 The second part of the conference is not expected be-
fore the end of 2002.


Similar to equivalent rules, the 2001 update of the draft establishes in its Art. 3 the domicile
of the defendant as the general jurisdiction. According to Art. 10 [1a] an action in tort or
delict shall be brought in the courts of the state “in which the act or omission that caused the
injury occurred“. The plaintiff may alternatively sue at the place where the injury arose,
unless “the defendant establishes that the person responsible could not reasonably have fore-
seen that an act or ommission could result in such an injury in that state“ (Art. 10 [1b]). Hav-
ing regard to the Shevill-case of the European Court of Justice, only the injury that occurred
in a certain jurisdiction may be claimed in that jurisdiction – the full amount of damages may
be claimed only at the place where the injurious conduct took place (Art. 10 [5]). Further-
more, a court may deny its competence by applying the forum non conviens doctrine (Art.
22). At the first part of the diplomatic conference especially the United States favoured the
inclusion of a regulation which would exclude jurisdiction at the place of effect if the defen-
dant shows that he or she has taken reasonable steps to avoid (business) contacts with that
place or to avoid directing activities to that place (see Art. 10 [2] and [3]).
The proposed inclusion of a clause (Art. 12 [4]) according to which the courts of the country
where a Patent or Trademark is registered have exclusive jurisdiction for claims of validity
and infringement gave rise to a lot of protests in the US. This clause was proposed because of
the situation in the UK and Australia, where validity and infringement of Patents and Trade-
marks are determined in a uniform manner by specific courts. But critics are right to deny the
application of this rule to Trademarks constituted by general acceptance in trade as they do
not need to be registered. Of no help here is Art. 12 [6] whereby the rule described above does
not apply in proceedings where validity and infringement are raised as incidential questions.
In Common Law, the existence or validity of a registered intellectual property right is not



936
    Results of the first part of the diplomatic conference are available on the Hague Conference’s website at
http://www.hcch.net
                                          Thomas Hoeren-Internet Law                                     326
considered an incidental question in matters of infringement of that right.937 The proposed
rule of Art. 12 [4] further does not apply to copyright validity or infringement claims since
copyrights are not rights requiring formal registration.



,, -XULVGLFWLRQ LQ FRQWUDFWXDO PDWWHUV

In contract law the parties to a dispute may – as distinct from tort law – choose a particular
jurisdiction. Sec. 38 [1] of the German Civil Procedure Act (ZPO) allows choice of court
agreements as long as the parties are merchants (in the meaning of the German Trade Act)
and/or legal persons of public law. Further on, sec. 38 [2] ZPO allows choice of court agree-
ments in the case where one of the parties has no general jurisdiction within its country.
Agreements with consumers on the jurisdiction of a court are not valid. These national rules
of the ZPO apply stimultaneously to issues of international jurisdiction.
Art. 17 [1] of the Brussels Convention allows a choice of court agreement, if this is in writing
(or evidenced in writing) or in a form which accords with practices which the parties have
established between themselves. Such agreements may – as distinct from the ZPO rules –
even be concluded with consumers. In order to provide effective protection of the consumer,
the agreement needs to be in writing or has to offer an equivalent level of protection to the
consumer. One needs to take into account that in matters of distance selling contracts with
consumers further special jurisdictional rules (Art. 13 [1] No.3) apply from which no deroga-
tion is possible (Art. 15). In the new Brussels Regulation, this special jurisdictional rule has
been extended allowing the consumer to sue at his or her local courts whenever the contract-
ing party “directs ... activities to that member state“ (Art. 15 [1c]).


On the international level the EU tendency to protect consumers has been criticised – in par-
ticular by the US in the framework of the Hague Conference consultations. According to Art.
7 of the Hague Convention draft a consumer can sue the contracting party before the courts of
the state in which the consumer is habitually resident. The action brought by the consumer has
to relate to a contract which arises out of activities conducted in that state or directed at that
state (Art. 7 [2]). In order to protect businesses in the field of E-Commerce, this jurisdiction is
limited in Art. 7 [3]: An activity will not be regarded as being directed at a state if the other




937
  See Report of the Experts on the Intellectual Property Aspects of the Future Convention, Preliminary Docu-
ment No. 13, April 2001, p 6
                                        Thomas Hoeren-Internet Law                                       327
party demonstrates that it took reasonable steps to avoid concluding contracts with consumers
habitually resident in that state.



,,, (QIRUFHPHQW RI MXGJPHQWV

The problems described above cumulate in the area of enforcement of judgments. In cases
where the plaintiff manages to sue a foreign defendant before a court and obtain a judgment,
he or she needs to ensure that this decision will be enforced. Within the scope of the Brussels
Convention / Regulation this does not pose any major problems – although in some European
states (Italy, Belgium) the enforcement will be performed with some delay. Outside Europe
enforcement of judgments is only guaranteed within the scope of bilateral agreements which
often do not exist. A intellectual property pirate may – without anything to worry about –
choose a foreign “enforcement-haven” as a place for his server and then distribute via internet
copyright and/or trademark infringing material worldwide. In this scenario the nation-state
based origin of law takes its revenge; the internet becomes de facto an area without laws, pun-
ishing all legal lies.



,9 2QOLQH GLVSXWH VHWWOHPHQW

Recently, the establishment of online dispute resolution services has been suggested as a pos-
sible solution to the jurisdiction and enforcement dilemma. The idea relates to ways of resolv-
ing a dispute between two parties via the internet. The Uniform Dispute Resolution Policy
(UDRP) of the ICANN (for details see the chapter on Domain Law) has become widely
known, which differs from other services in that an UDRP Panel Decision may actually lead
to a transfer of the domain. Other services938 do not have the means to make binding and en-
forceable decisions. Their main sanction is the publication of their decision and the with-
drawal of a trust seal. In particular because of this lack of enforceability the efficiency and
acceptance of online dispute resolution services remains unclear.939 Disputed amongst schol-




938
         See       http://www.clicknsettle.com;        http://www.novaforum.com;       http://www.ombuds.org;
http://www.onlineresolution.com;                http://www.ecodir.org;            http://www.webassurec.com;
http://www.wordandbond.com; http://www.squaretrade.com
939
    An exception may be Trusted Shops, a service backed by the insurance company Gerling Group which en-
sures the decisions of Trusted Shops financially; see http//:www.trusted shops.de
                                          Thomas Hoeren-Internet Law                                     328
ars is further the relation of such services to the German Act restricting legal advice to profes-
sional lawyers (Rechtsberatungsgesetz).940




940
   See Grunewald, BB 2001, 1111 seqq., who denies the applicability of the Rechtsberatungsgesetz even for
German services because of the principle of the country of origin as laid down in the E-Commerce Directive.
                                         Thomas Hoeren-Internet Law                                         329

				
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