Blocking orders: fine so long as they're reasonable says CJEU

The Court of Justice of the European Union gave judgment this morning in Case C-314/12 UPC Telekabel Wien GmbH v Constantin Film Verleih GmbH and Wega Filmproduktionsgesellschaft mbH, a reference for a preliminary ruling from the Oberster Gerichtshof (the Austrian Supreme Court).  Fellow blogger Eleonora has already written an in-depth breaking news item on this ruling for the IPKat, here; for readers who just want an outline, here's the Curia's own media release:

An internet service provider may be ordered to block its customers’ access to a copyright-infringing website

Such an injunction and its enforcement must, however, ensure a fair balance between the fundamental rights concerned

Constantin Film Verleih, a German company which holds, inter alia, the rights to the films ‘Vicky the Viking’ [originally ‘Wickie und die starken Männer’ ...] and ‘Pandorum’, and Wega Filmproduktionsgesellschaft, an Austrian company which holds the rights to the film ‘The White Ribbon’ [... and ‘Das weiße Band’], became aware that their films could be viewed or even downloaded from the website ‘kino.to’ without their consent. At the request of those two companies, the Austrian courts prohibited UPC Telekabel Wien, an internet service provider (‘ISP’) established in Austria, from providing its customers with access to that site. UPC Telekabel considers that such an injunction cannot be addressed to it, because, at the material time, it did not have any business relationship with the operators of kino.to and it was never established that its own customers acted unlawfully. UPC Telekabel also claims that the various blocking measures which may be introduced could, in any event, be technically circumvented. Finally, some of those measures are excessively costly.

... [T]he Oberster Gerichtshof ... asked the Court of Justice to interpret the EU Copyright Directive [Directive 2001/29 on the harmonisation of certain aspects of copyright and related rights in the information society -- the InfoSoc Directive] and the fundamental rights recognised by EU law. The directive provides for the possibility for rightholders to apply for an injunction against intermediaries whose services are used by a third party to infringe their rights [a footnote to the media release records that, as regards that possibility, the Court has already held that (i) EU law precludes the imposition of an injunction by a national court which requires an internet service provider to install a filtering system with a view to preventing the illegal downloading of files which applies indiscriminately to all its customers, as a preventive measure, exclusively at its expense, and for an unlimited period, citing Case C-70/10 Scarlett Extended and that (ii) that the owner of an online social network cannot be obliged to install a general filtering system, covering all its users, in order to prevent the unlawful use of musical and audio-visual work, citing Case C-360/10 SABAM). UPC Telekabel submits that it cannot be considered to be an intermediary in that sense.

In today’s judgment, the Court replies ... that a person who makes protected subject-matter available to the public on a website without the agreement of the rightholder is using the services of the business which provides internet access to persons accessing that subject-matter. Thus, an ISP, such as ... which allows its customers to access protected subject-matter made available to the public on the internet by a third party is an intermediary whose services are used to infringe a copyright.

The Court notes ... that the directive, which seeks to guarantee a high level of protection of rightholders, does not require a specific relationship between the person infringing copyright and the intermediary against whom an injunction may be issued. Nor is it necessary to prove that the customers of the ISP actually access the protected subject-matter made accessible on the third party’s website, because the directive requires that the measures which the Member States must take in order to conform to that directive are aimed not only at bringing infringements of copyright and of related rights to an end, but also at preventing them.

The Oberster Gerichtshof also seeks to know whether the fundamental rights recognised at EU level preclude a national court from prohibiting an ISP, by means of an injunction, from allowing its customers access to a website which places protected subject-matter online without the agreement of the rightholders, when that injunction does not specify the measures which the ISP must take and when that ISP can avoid incurring coercive penalties for breach of the injunction by showing that it has taken all reasonable measures.

In this connection, the Court notes that, within the framework of such an injunction, copyrights and related rights (which are intellectual property) primarily enter into conflict with the freedom to conduct a business, which economic agents (such as internet service providers) enjoy, and with the freedom of information of internet users. Where several fundamental rights are at issue, Member States must ensure that they rely on an interpretation of EU law and their national law which allows a fair balance to be struck between those fundamental rights.

With regard, more specifically, to the ISP’s freedom to conduct a business, the Court considers that that injunction does not seem to infringe the very substance of that right, given that, first, it leaves its addressee to determine the specific measures to be taken in order to achieve the result sought, with the result that he can choose to put in place measures which are best adapted to the resources and abilities available to him and which are compatible with the other obligations and challenges which he will encounter in the exercise of his activity, and that, secondly, it allows him to avoid liability by proving that he has taken all reasonable measures [so there's plenty of flexibility: the injunction simply identifies the end to be achieved, leaving it up to its addressee to decide what steps are reasonable to achieve that end]. 

The Court therefore holds that the fundamental rights concerned do not preclude such an injunction, on two conditions: (i) that the measures taken by the ISP do not unnecessarily deprive users of the possibility of lawfully accessing the information available [in order to respect the freedom of information of internet users] and (ii) that those measures have the effect of preventing unauthorised access to the protected subject-matter or, at least, of making it difficult to achieve and of seriously discouraging users from accessing the subject-matter that has been made available to them in breach of the intellectual property right  [in order to respect the intellectual property rights of rights owners]. The Court states that internet users and also, indeed, the ISP must be able to assert their rights before the court. It is a matter for the national authorities and courts to check whether those conditions are satisfied.

Taking a look at the judgment, this blogger notices that the word 'proportionality' is used just once, in the context of implementing the measures transposing the InfoSoc Directive, where

"[46] ... the authorities and courts of the Member States must not only interpret their national law in a manner consistent with that directive but also ensure that they do not rely on an interpretation of it which would be in conflict with those fundamental rights or with the other general principles of EU law, such as the principle of proportionality ..."

while 'reasonable' gets six mentions and is the requisite description of the measures which the injunction's addressee must take. As a common lawyer he feels more at home with the R-word, but he has often mused on the points at which the reasonable and the proportional overlap and the points on which they depart.

You Wein some, you lose some as another copyright case heads for the CJEU

UK IPO -- please note the
correct spelling of Telekabel

The definitive early announcement post on Case C-314 UPC TELEKABEL WEIN has already been hoisted proudly on to the IPKat weblog by Eleonora, here, so what follows is just a sawn-off version, both for the record and so that anyone searching the 1709 Blog's database of 1,140+ items will see that we haven't missed it.

This is a reference to the Court of Justice of the European Union (CJEU) of four questions upon which the Austrian Oberster Gerichtshof would like some answers before it proceeds to deal with the case before it.  The questions are as follows:

"1. Is Article 8(3) of the [InfoSoc] Directive [2001/29] to be interpreted as meaning that a person who makes protected subject matter available on the internet without the right holder’s consent is using the services of the access providers of persons seeking access to that protected subject matter?

2. If the answer to the first question is in the negative, are reproduction for private use and transient and incident reproduction permissible only if the original reproduction was lawfully reproduced, distributed or made available to the public?

3. If the answer to the first and second question is in the affirmative, and an injunction is therefore to be issued against the user’s access provider in accordance with Article 8(3) of the Directive, is this compatible with Union law, in particular with the necessary balance between the parties’ fundamental rights?

4. If the answer to the third question is in the negative, is it compatible with Union law to require an access provider to take specific measures to make it more difficult for its customers to access a website containing material made available unlawfully if those measures require not considerable costs and can easily be circumvented without any special technical knowledge?".

Eleonora has called on Austrian readers of the IPKat to post some background information relating to the underlying litigation; at the time of posting of this blog, however, it appears that no public-spirited Austrian has responded to her call. Meanwhile, this post reminds readers that the UK's Intellectual Property Office invites comments that will determine whether any British lawyers have the joy of being commissioned to present the UK government's position -- should it have one -- to the CJEU. If you'd like to submit your thoughts or observations to the UK government, you should email Policy here by not later than 7 September of this year.

Filtering is not for social networks, says the CJEU

Today the Court of Justice of the European Union published its long-awaited judgment in Case C-360/10 SABAM v Netlog (notice of the referral to the CJEU was reported in this Blog here).

Imposing certain filtering systems for information
circulating over the Internet may not be very handy, 
argues the CJEU 

As our readers will remember, the facts of the case were not dissimilar from those in Scarlet (with the difference that Netlog is a social network, while Scarlet is an internet service provider which provides its customers with access to the internet without offering other services such as downloading or file sharing).

As reported in the Court’s press release, SABAM is a management company which represents authors, composers and publishers of musical works. On that basis, it is responsible for, inter alia, authorising the use by third parties of copyright-protected works of those authors, composers and publishers.

SABAM claimed that Netlog’s social network (where every person who registers acquires a personal profile which the user can complete himself and which becomes available globally) also offers all users the opportunity to make use, by means of their profile, of the musical and audio-visual works in SABAM’s repertoire, making those works available to the public in such a way that other users of that network can have access to them without SABAM’s consent and without Netlog paying it any fee.

Following unsuccessful attempts to conclude an agreement aimed at obtaining payment of a fee by Netlog for the use of the SABAM repertoire, in 2009 SABAM had Netlog summoned before the President of the rechtbank van eerste aanleg te Brussel (Court of First Instance, Brussels) in injunction proceedings. SABAM sought, inter alia, to obtain an order that Netlog cease unlawfully making available musical or audio-visual works from SABAM’s repertoire. In response to this, Netlog submitted that granting SABAM’s injunction would have been tantamount to imposing on Netlog a general obligation to monitor. This would have been contrary to Article 21(1) of the Law of 11 March 2003 on certain legal aspects of information society services, which transposes Article 15(1) of the Ecommerce Directive into Belgian law. In addition, Netlog claimed that the granting of such an injunction could have resulted in the imposition of an order introducing, for all its customers, in abstracto and as a preventative measure, at its own cost and for an unlimited period, a system for filtering most of the information which is stored on its servers in order to identify on its servers electronic files containing musical, cinematographic or audio-visual work in respect of which SABAM claims to hold rights, and subsequently blocking the exchange of such files.

The Court of First Instance decided to stay the proceedings and refer the following question to the Court of Justice for a preliminary ruling:

"Do Directives 2001/29 and 2004/48, in conjunction with Directives 95/46, 2000/31 and 2002/58, construed in particular in the light of Articles 8 and 10 of the European Convention on the Protection of Human Rights and Fundamental Freedoms [signed in Rome on 4 November 1950], permit Member States to authorise a national court, before which substantive proceedings have been brought and on the basis merely of a statutory provision stating that “[the national courts] may also issue an injunction against intermediaries whose services are used by a third party to infringe a copyright or related right”, to order a hosting service provider to introduce, for all its customers, in abstracto and as a preventive measure, at its own cost and for an unlimited period, a system for filtering most of the information which is stored on its servers in order to identify on its servers electronic files containing musical, cinematographic or audio-visual work in respect of which SABAM claims to hold rights, and subsequently to block the exchange of such files?"

Today the Court provided its response and, in compliance with its earlier ruling in Scarlet, held that the owner of an online social network cannot be obliged to install a general filtering system, covering all its users, in order to prevent the unlawful use of musical and audio-visual work.

After having stated that Netlog is a hosting service provider as per Article 14 of the E-Commerce Directive, the Court found to be common ground that implementation of a filtering system would require the hosting service provider to identify, within all of the files stored on its servers by all its service users, the files which are likely to contain works in respect of which holders of IP rights claim to hold rights. Next, the hosting service provider would have to determine which of those files are being stored and made available to the public unlawfully, and, lastly, it would have to prevent files that it considers to be unlawful from being made available. Such preventive monitoring would therefore require active observation of the files stored by users with the owner of the social network. Accordingly, the filtering system would require that owner to carry out general monitoring of the information stored on its servers, something which is prohibited by Article 15(1) of the E-Commerce Directive. 

Though the protection of the right to intellectual property is enshrined in Article 17(2) of the Charter of Fundamental Rights of the European Union, says the Court, there is nothing whatsoever in the wording of that proviso or in the Court’s case law to suggest that that right is inviolable and must for that reason be absolutely protected. Indeed, pursuant to the Court's judgment in Case C‑275/06  Promusicae, the protection of the fundamental right to property, which includes the rights linked to intellectual property, must be balanced against the protection of other fundamental rights. More specifically, in the context of measures adopted to protect copyright holders, national authorities and 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. Accordingly, in circumstances such as those in the main proceedings, national authorities and courts must, in particular, 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 hosting service providers pursuant to Article 16 of the Charter.

As such, the injunction requiring the installation of the contested filtering system involves monitoring all or most of the information stored by the hosting service provider concerned, in the interests of those rightholders. Moreover, that monitoring has no limitation in time, is directed at all future infringements and is intended to protect not only existing works, but also works that have not yet been created at the time when the system is introduced.  Accordingly, such an injunction would result in a serious infringement of the freedom of the hosting service provider to conduct its business since it would require that hosting service provider to install a complicated, costly, permanent computer system at its own expense, which would also be contrary to the conditions laid down in Article 3(1) of Directive 2004/48, which requires that measures to ensure the respect of intellectual-property rights should not be unnecessarily complicated or costly. 

In those circumstances, such an injunction is to be regarded as not respecting the requirement that a fair balance be struck between, on the one hand, the protection of the intellectual-property right enjoyed by copyright holders, and, on the other hand, that of the freedom to conduct business enjoyed by operators such as hosting service providers. Moreover, the effects of that injunction would not be limited to the hosting service provider, as the contested filtering system may also infringe the fundamental rights of that hosting service provider’s service users, namely their right to protection of their personal data and their freedom to receive or impart information, which are rights safeguarded by Articles 8 and 11 of the Charter respectively. Indeed, the injunction requiring installation of the contested filtering system would involve the identification, systematic analysis and processing of information connected with the profiles created on the social network by its users. The information connected with those profiles is protected personal data because, in principle, it allows those users to be identified. Moreover, that 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. Indeed, it is not contested that the reply to the question whether a transmission is lawful also depends on the application of statutory exceptions to copyright which vary from one Member State to another. In addition, in some Member States certain works fall within the public domain or may be posted online free of charge by the authors concerned.

Jolly times for Facebook and similar
operations in the EU ... but will it last?

The ruling is not surprising, given the approach taken by the Court in Scarlet. However, readers of this Blog may be interested in discussing the implications of such an interpretation of intermediaries' obligations in light of the recent signature by the EU of ACTA. In particular, one may wonder how it is possible to reconcile CJEU's recent jurisprudence on ISPs with ACTA's provisions, in particular Article 12(1)(a), according to which "Each Party shall provide that its judicial authorities have the authority to order prompt and effective provisional measures ... against a party or, where appropriate, a third party over whom the relevant judicial authority exercises jurisdiction, to prevent an infringement of any intellectual property right from occurring, and in particular, to prevent goods that involve the infringement of an intellectual property right from entering into the channels of commerce".

Rome Trial Court says Google is like Scarlet

A few days ago the Rome Court of First Instance issued an important decision (which can be read in Italian here) in an application for an interim injunction in the context of proceedings between Reti Televisive Italiane (RTI, a subsidiary of the Mediaset Group owned by Silvio Berlusconi), and Google and Others.

Back in the summer of this year, RTI sued Google for copyright infringement, claiming that a web portal, hosted on Blogger, was streaming football matches broadcast on RTI's TV channels. The Rome Court rejected RTI's application because -- following notification to Google -- the allegedly infringing materials had been removed from Blogger.

Moreover, by referring to the recent ruling of the CJEU in Scarlet (noted in this Blog here), the Rome Court held that web platforms do not have an obligation to monitor communications on their network. In particular - pointed out the Court - an injunction aimed at preventing all future infringements would be tantamount to imposing an obligation of general surveillance of all the communications passing through a provider's network. Such an obligation cannot be imposed upon a service provider, in that this would be contrary to EU law. This would also be in contrast with the freedom of the service provider to conduct its business, since such surveillance would require that the provider install a complicated, costly computer system.

We'll see now how things develop in the course of the proceedings. However, for the sake of pedantry, the ruling in Scarlet was about ISPs. Is this the case of Google? Another pending reference may (or may not) change the panorama, once it is decided. I am referring to Netlog (here and here), another reference from the Rechtbank van eerste aanleg te Brussel (Belgium), posing the same question as in Scarlet, but in relation to hosting service providers ...

Google European Public Policy Blog here