IP CONTRACT LAW
Zoom.in failed to sufficiently demonstrate that meetings its obligations towards MN, would lead to the demise of the company: It can by no means be concluded that an agreement with YouTube, with the retention of the identity and independence of MN, could not be in agreement with the new YouTube policy. Zoom.in was insufficiently able to substantiate that a ‘suspension’ would be justified because MN severely failed to meet its obligations: Zoom.in has brought no clear notice of default to MN and the full take-over of the company management of MN goes much farther than the ‘suspension’ of obligations. Sufficiently likely that the judge in potential proceedings would rule that Zoom.in has no justification to no longer meet its contractual obligations. The claims of Zoom.in in the counterclaim to meet the obligations of the Agreement and the claim to remove a text about non-timely payment on the website of MN cannot be granted: Zoom.in failed to clearly demonstrate in which sense MN has shortcomings and Zoom.in insufficiently substantiated that the text on the website of MN is unlawful.
Preliminary injunction. Zoom.in is a Dutch company that publishes (video) content on different media channels, amongst which YouTube. MN is a British company that focuses on the operation of YouTube channels related to music. The parties began to collaborate in 2014. This collaboration is defined in an agreement, which gives MN access to the Content Management System (CMS). This offers MN an even larger platform to publish its channels and to make them easier to manage. Zoom.in receives a part of the advertising income of the MN channels in return. Disputes have arisen among the parties and Zoom.in consequently moves the MN channels to Zoom.in. Since then, the advertising income of the MN channels is paid to the AdSense account of Zoom.in. MN demands Zoom.in to make the CMS accessible again in order to manage the channels of its affiliated artists and payment of the outstanding advertising income. Zoom.in demands as a counterclaim compliance with the agreements and to remove the text published on the dashboard in which MN informs its artists on the outstanding payment.
Zoom.in’s defense comes down to the fact that it 1) does not have the possibility to (fully) meet (and keep meeting) these obligations, as this could have fatal consequences for MN as well as Zoom. in (because Google/YouTube would deactivate the channel, as MN is a ‘subnetwork’ undesired by YouTube) and/or (2) is entitled to suspend its obligations, because MN in turn is not meeting its obligations according to Zoom.in. Based on this, according to Zoom.in, Zoom.in’s actions must be regarded as a ‘temporary emergency measure’.
Zoom.in has however failed to sufficiently demonstrate that it would be impossible for it to continue to meet its obligations towards MN, as this would lead to the demise of the company. YouTube has indeed implemented a more stringent policy since January 2017 with regards to so-called MCN’s, in the sense that ‘subnetworks’ are no longer tolerated. The argument of MN that it is not regarded as a ‘subnetwork’ but as an ‘affiliate’, must certainly not be regarded as hopeless in advance. In addition, it can by no means be concluded for the correspondence of MN with YouTube that an agreement with YouTube, with retention of the identity and independence of MN, could not be in agreement with the new YouTube policy.
Zoom.in was also insufficiently able to substantiate its argument that MN severely failed to meet its obligations, so that a suspension would be justified. Zoom.in furthermore has brought no clear notice of default in the suit from which it unambiguously shows that they have pointed out these alleged shortcomings to MN or have issued a warning to comply with its obligations. In addition, the full take-over of the company management of MN – such as Zoom.in seems to have done by implementing the measure – goes a bit farther than the ‘suspension’ of obligations . The standpoint of Zoom.in that it is merely a ‘temporary emergency measure’ appears implausible, as the situation has been ongoing without change since the end of December 2016.
Because of the aforementioned it is sufficiently likely that the judge in potential proceedings would rule that Zoom.in has no justification to no longer meet its contractual obligations. Zoom.in has failed to clearly demonstrate in which sense, according to them, MN has shortcomings and Zoom.in has failed to submit clear and concrete summons.Regarding the text on the website, MN has rightfully claimed that the text used is neutral and that it is entitled to inform affiliated channels about the cause of non-timely payment. There is therefore no reason to rule that the text be removed.