On Thursday the European Court of Justice (“ECJ”) ruled that an Internet Service Provider (“ISP”) cannot be forced to filter all Internet traffic in order to stop the sharing of copyright infringing content. This opinion is the culmination of a seven year old legal battle in the case of Sabam v. Scarlet.
In 2004 a Belgian royalty collection agency, Sabam, brought legal action against Scarlet, a Belgian ISP, seeking an injunction ordering the ISP to put in place a mechanism to prevent its users from downloading copyrighted works via peer-to-peer (P2P) networks without permission from the copyright owner. In 2007 the Brussels Court of First Instance ordered Scarlet to take measures to stop the downloading of copyrighted works without the authority of the copyright owner or face fines of €2,500 per day. This decision ignored testimony from experts that no reasonable electronic measure existed for adequately stopping the downloading of copyrighted content.
Scarlet appealed the decision. In January of 2010, the Brussels Court of Appeal referred the following two questions to the European Court of Justice:
- [Do European directives on Intellectual Property rights construed in light of personal freedoms guaranteed by law] permit … a national court…to order an [ISP] to install, for all its customers, in abstract and as a preventive measure, exclusively at the cost of that ISP and for an unlimited period, a system for filtering all electronic communications, both incoming and outgoing, passing via its services, in particular those involving the use of peer-to-peer software, in order to identify on its network the movement of electronic files containing a musical, cinematographic or audio-visual work in respect of which the applicant claims to hold rights, and subsequently to block the transfer of such files, either at the point at which they are requested or at which they are sent?
- [If the answer to the first question is yes then can the court] apply the principle of proportionality when deciding on the effectiveness and dissuasive effect of the measure sought?
Effectively what the Court of Appeals was asking was, do we have the authority to order an ISP to engage in broad filtering of all content in order to identify some offending content and, if so, can we apply a proportionality, cost and benefit, analysis in granting or denying such relief? Clearly the Court felt uncomfortable with the scope of relief which Sabam claimed that it was entitled to under the existing Directives.
On Thursday, November 24, 2011, the ECJ ruled that European law precludes an injunction of the kind under review which would require monitoring of all internet user communications as a preventive measure at the ISP’s expense and for an unlimited period of time for the purpose of stopping copyright infringing content.
In its ruling the ECJ focused on the rights to privacy of Internet users. It state dthat that the general monitoring of all communications that would be required to accomplish the requirements of the injunction, would itself violate European privacy directives. The ECJ went on to say that in granting relief to copyright owners, “courts must strike a fair balance between the protection of copyright and the protection of the fundamental rights of individuals who are affected by such measures.” Moreover, the “injunction could potentially undermine freedom of information since that system might not distinguish adequately between unlawful content and lawful content, with the result that its introduction could lead to the blocking of lawful communications.”
The ECJ was also sensitive to the business impact on the ISP. It stated that courts must also “strike a fair balance between the protection of the intellectual property right enjoyed by copyright holders and that of the freedom to conduct a business enjoyed by operators such as ISPs.” The expensive monitoring system requested by Sabam would “result in a serious infringement of the freedom of the ISP concerned to conduct its business since it would require that ISP to install a complicated, costly, permanent computer system at its own expense.”
While this ruling forbids broad monitoring it does not prevent blacklisting of websites, a tactic affirmed by the British High Court last year in a case against British Telecom and currently under consideration in at least one bill pending before Congress. Nevertheless, privacy advocates were pleased with this decision.