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".

Another ECJ reference on monitoring and SABAM

This blog has already reported here on the ECJ reference in the case of SABAM v Tiscali.

To that case has now been added another reference from the Belgian courts in the case of Netlog v SABAM. At this stage, details in English are hard to come by, but it appears that Netlog, a social networking site, was subject to a similar attack from SABAM as that which Tiscali/Scarlet received. The difference, of course, is that as a social network, Netlog sits in a different point in the value chain than the ISP and therefore at a different point in the intersection between the various applicable legislation (e-commerce directive, data protection legislation, IP enforcement directive).

The Belgian court rejected SABAM's demands for Netlog to implement filtering and sent the case to the ECJ. It has been filed under case number C-360/10 - but at this stage, the author has been unable to track down any further details of the questions. Netlog's lawyers were quoted as saying they had won on all counts (although I guess his clients would have been even happier for the case to have been dismissed, rather than sent to the ECJ for another year or two of litigation).

Is it a red letter day for The Pirate Party over Dutch injunction?

It looks like the principles behind SABAM v Netlog and more importantly SABAM v Scarlet might be tested soner rather than later – and the testing might be done by none other than the Pirate Party in the Netherlands who have recently been taken to task by Dutch anti-piracy group BREIN. The Scarlet decision by the ECJ (on a referral from the courts in Belgium) decided inter alia that the fundamental rights enshrined in EC Directives (2000/31, 2001/29, 2004/48, 95/46 and 2002/58) must be interprested as precluding an injunction made against an internet service provider which requires it to install a system for filtering all electronic communications …. which applies to all customers indiscriminatly. This did not trouble the High Court in Newzbin 2.

The decision in Netlog (a social networking site) similarly held that a filtering system that would require the owner to carry out general minitoring of information stored on its servers would be prohibited by Artivle 15(1) of the E-Commerce Directive.

In the Pirate Party case, BREIN had successfully secured a web-block injunction against the Pirate Bay itself January, on the ground that the Pirate Bay was liable for the copyright infringement of many of its users. The injunction named two internet service providers, Ziggo and XS4ALL, and BREIN is now pursuing action to extend the injunction to other internet providers in the Netherlands. The thorn in their side have been ‘savvy file sharers’ who know exactly how to get round web blocks – and then make that information available online to others – so BREIN has been monitoring them too. And guess who one of those offering this advice is – yes – step forward the Dutch Pirate Party who posted a reverse proxy’ to enable access (effectively nullifying the court order) until ordered to take that down by the Dutch court in a new injunction. The Court in the Hague required the political party to take the proxy offline or pay a fine of €10,000 (£8,225) per day, up to a maximum €1,000,000 (£822,500).The Pirate Party sort of complied, but then seemingly posted a new page complaining about the injunction, and posting new advice and links to allow keen file sharers to access the Pirate Bay. BREIN subsequently demanded these be removed, though so far it seems that only the hyperlinks have been taken down.

Now the Dutch Pirate Party has now announced it plans to sue BREIN itself over the injunction and Torrentfreak reports that the Dutch Pirate Party said: "By dragging BREIN to court, the Pirate Party finally has the chance to put forward arguments to strike the court injunction that was unilaterally imposed on it last Friday by the Dutch entertainment industry organisation" and in a blog Dutch Party member Blauwbaard said “after the legal harassment continued here on Saturday night, when BREIN sent an email at 8.15pm demanding additional draconian measures under the threat of penalties, the Pirates are anxious to finally get their day in court”. Will this one run? Best I can say is that it might do.

Three of the Pirate Bay co-founders had previously threatened to sue BREIN for defamation in Sweden and Holland.

http://torrentfreak.com/pirate-party-ordered-to-shut-down-pirate-bay-proxy-120414/

http://the1709blog.blogspot.co.uk/2012/02/filtering-is-not-for-social-networks.html

and http://the1709blog.blogspot.co.uk/2011/11/will-copyright-owners-see-red-over.html

The CopyKat

Star Trek franchise owners Paramount Pictures and CBS have revealed they're planning to drop their controversial copyright lawsuit against the makers of the ambitious fan film, Star Trek: Axanar. The news was announced by the producer of the new Star Trek Beyond JJ Abrams at a Trekkies fan event. Paramount/CBS lawyers told Buzzfeed's Adam Vary that they are in 'settlement' discussions and that they will draw up guidelines for fan film projects in the future, so that this sort of thing doesn't happen in the future.  But hang on - now we wont hear arguments about whether the Klingon language can be protected by copyright. This is a BIG SPOILER! You can see all 21 minutes of Prelude to Axanar here. 

A jury has ruled in favour of Google in the long-running legal dispute with Oracle over software used in many of the world’s smartphones. Oracle contended that Google used its Java copyrighted programming code in 11,000 of its 13 million lines of software code in Android, its mobile-phone operating system, and asked for $9 billion from Google. Google said it made fair use of the code. The victory for Google will cheer many other software developers,who use so-called open-source software. The decision was delivered in U.S. District Court in San Francisco. More here.

The Turtles may have done well in battering Sirius XM's attempts to avoid paying royalties for the use of pre-1972 copyrights, but now CBS has advanced an interesting new argument on the same topic - and a California judge has handed down a big ruling that could help "immunize" terrestrial radio operators and others from lawsuits and upend many preconceived notions about copyright. The decision from U.S. District Court Judge Percy Anderson comes in a dispute between ABS Entertainment, owner of recordings by Al Green and others, and CBS Radio, and was based on the concept that pre-1972 songs are protected under state law and can't be broadcast without permission. In reaction to the ABS lawsuit, CBS tried out a new argument - it was not performing the original analogue recordings, but rather NEW digitally remastered versions that came out after 1972. Under this argument, the specifically performed works aren't protected by state law, and CBS doesn't have to pay. And the court agreed. The labels are going to have a battle fighting this one, as they already file new copyrights for re-masters - which might extend the life of copyright for those gleaming new digital re-masters - but this plays into terrestrial broadcaster's hands. More on re-mixing and re-mastering here and here.

And over on the IPKat, two important recent decisions are reported. First off, Does an internet service provider (ISP) lose its safe harbour protection because, upon obtaining actual knowledge or awareness of third-party illegal content, it has not acted expeditiously to remove or disable access to such content? The Tribunale di Roma (Rome Court of First Instance) had such a case where an ISP had acted months after the request of the concerned rightholder.  The Tribunale issued an interesting decision on the liability of ISPs for third-party infringing acts, here in the context of proceedings brought by RTI - Reti Televisive Italiane (owned by broadcasting company Mediaset). This time the defendant was French video platform provider website Kit Digital France (now bankrupt, formerly Kewego). The court referred to a number of decisions of the Court of Justice of the European Union (CJEU). More specifically it recalled: L’Oréal and Google France in relation to what an ‘active role’ (such as to prevent safe harbour protection) of an ISP entails; Scarlet and Netlog in relation to the prohibition to impose on ISPs general filtering obligations;  Netlog and Telekabel to note that copyright protection (the protection of IP is mandated within the right to property in Article 17(2) of the Charter of Fundamental Rights of the European Union) must be balanced with other fundamental rights and freedoms, including ISPs’ freedom to conduct a business (Article 16 of the Charter) and users’ freedom of expression/information (Article 11 of the Charter). On the facts, the court concluded that Kewego should be liable for the damages caused to the claimant by such delay, but left their actual determination to a later stage.

And finally - back to that thorny issue of 'making available' and that 'new public'. The Court of Justice of the European Union (CJEU) had been asked to say whether the making available of TV broadcasts in rehabilitation centres should be regarded as an act of communication to the public in Reha Training, C-117/15 (a reference for a preliminary ruling from the Landgericht Köln (Regional Court, Cologne)) asking essentially whether the making available of TV broadcasts by means of TV sets on the premises of a rehabilitation centre falls within the scope of Article 3(1) of the InfoSoc Directive and Article 8(2) of the Rental and Lending Rights Directive; and the concept of ‘communication to the public’ for the purposes of those two provisions must be given a uniform interpretation. The Grand Chamber has now delivered a 67 paragraph judgment substantially confirming the Opinion of Advocate General Bot, although not relying on the four elements indicated therein. The Court highlighted that there are some differences between relevant provisions in the InfoSoc and Rental and Lending Rights directives. However, it concluded that there is no evidence that EU legislature intended the concepts of 'communication to the public' differently in these two pieces of legislation. Here the court found on the facts that: The operator of a rehabilitation centre deliberately transmits protected works to patients by means of TV sets installed in several places on his premises. As such, he is committing an 'act of communication' and; The patients of a rehabilitation centre constitute a 'public' that can enjoy the works broadcast by means of TV sets thanks to the indispensable intervention of the centre operator; This public is also 'new' in that it was not taken into account by the relevant. Eleonora's excellent analysis is here - but this blogger cant help but think that the court is getting itself into ever more difficult waters - and what the law is (or rather how it will be applied) is anyone's guess now. How would say the  use of a publicly available radio broadcast in  a staff canteen differ from say a dentist's surgey or waiting room, a spa, a hotel room (Rafael Hoteles), a tyre fitter's waiting area ? Apart from 'the can of worms opened by Svensson' - this writer is left with a nagging feeling that is reflected in the comments from one garage owner who said back in 2009 “The radio stations are paying to play the music and we have to pay to listen to it – they [the PRS] are taking with both hands". 

EU copyright at Fordham: a report (part II)

Having highlighted the position of the Commission as to EU copyright harmonisation (here), an assessment of the last twenty years of harmonisation was provided - inter alia - by Prof Bernt Hugenholtz of the University of Amsterdam.

First, he divided the harmonisation process into three phases, these being (1) 1991-2000, when core copyright directives were issued; (2) 2002-2008, when Member States transposed such directives into national laws; (3) 2009-, in which the CJEU has been playing a pivotal role in interpreting such directives. 

Bernt Hugenholtz

Overall, copyright harmonisation has had positive effects, in that approximating the laws of EU Member States has enhanced legal certainty, favoured the emergence of common principles, as well as the establishment of EU external competence in this field. The negative effects of copyright harmonisation can be held to be the following: (1) slow response to technological development; (2) harmonisation has always moved upwards (see databases); and (3) the overall process has been fairly intransparent, thus favoring lobbying (see the case of term extension(s)).

As to the future of EU copyright, Prof Hugenholtz indicated that lawmaking at the EU level has the potential to become increasingly difficult, due to the following aspects: (1) ever growing number of Member States; (2) increasingly central role of the European Parliament; (3) ongoing discussions as to social legitimacy of copyright; (4) lack of normative constitutional mandate in primary EU law to legislate in the area of copyright. 

This said, the alternatives on the table are substantially two: do nothing or unify copyright at the EU level.

Trevor Cook

Speaking of copyright reforms, Trevor Cook of Bird&Bird LLP offered an enlightening insight into copyright's exceptions and limitations and dealt with the heated topic concerning whether something like US fair use should be pursued in Europe too. This, claimed Trevor, would be inconsistent with the InfoSoc Directive and it is not sure that it would be desirable to introduce in the first place. This is beacuse of the unpredictable outcome of fair use defences in the US. In any case, exceptions and limitations may be extended and updated at the EU level, even lacking an initiative of EU legislative. Reliance on fundamental rights has increased, both before national courts and the CJEU. The latter is because of the new status of the Charter of Fundamental Rights following the Lisbon Reform Treaty (as very recent examples, see the decisions in Scarlet and Netlog). This view was upheld also by Mr Justice Peter Charleton of the High Court of Ireland, Dublin.

Graham Smith

An analysis of recent CJEU decisions was offered in the presentations by Graham Smith of Bird&Bird LLP and Professor Lionel Bently of the University of Cambridge.

Graham has offered a thoughtful overview of aggregating and related cases in the EU.

Lionel Bently

Prof Bently, who has called the harmonising effects of CJEU case law 'harmonisation by stealth' (see earlier 1709 Blog post here), has highlighted how CJEU activism is likely to cast ambiguities on the scope and meaning of EU copyright. This may result in Member States asking the Commission to be more active in the future, so to prevent contradictory and ambigous outcomes. Despite this, harmonisation via CJEU case law has had positive effects too, as it has touched upon aspects which could have not been harmonised with legislation alone. Above all, the outcomes of CJEU decisions are legitimate, though it is doubtful in the first place whether the Court was legitimated to act in lieu of EU legislative. In addition to this, doubts persist as to whether the harmonising effects of CJEU judgments are consistent with national legislation. Finally, the effects of these decisions have contributed to transitional uncertainty in the laws of some Member Stares, notably the UK.

In conclusion, from the presentations offered at Fordham, EU copyright is in need of amelioration. At the moment, there are no ambitious EU legislative initiatives. In any case, these are regarded cautiously and are deemed to require careful consideration before being undertaken. So, at the end of the day, it is not clear whether CJEU activism is the result of unavoidable gaps in legislative instruments or whether, instead, harmonisation via CJEU case law has been made necessary to supply lack of legislative initiative tout court. The best guideline for future action at the EU level? Directly from the LEGO store at the Rockfeller Center:

Fordham Report 2014: Enforcement

The average Fordham copyright enthusiast
getting in the mood
for the enforcement session

The second copyright session of this afternoon at the 22nd Fordham IP Conference [again: do not forget that 6th May is the day of my Post-Fordham Copyright Catch-Up event] was moderated by David Carson (IFPI) and dealt with enforcement issues.

The first speaker was Jane C Ginsburg (Columbia Law School, New York), who examined ISP liability and website-blocking in the EU, following the recent decision of the Court of Justice of the European Union (CJEU) in Telekabel [here], as well as earlier rulings in Scarlet [here] and Netlog [here]. She recalled that Article 8(3) of the InfoSoc Directive must be balanced against Article 3 of the Enforcement Directive and Article 15 of the E-Commerce Directive, and also highlighted the relevance of Charter fundamental rights [see paras 45-47 of the Telekabel decision for some CJEU discussion on this very point] to enforcement discourse. Despite the ambiguities of the Telekabel decision, she concluded that filtering measures would not be compatible with EU law.

Then, Karen R Thorland (MPAA) discussed how different copyright regimes have designed and implemented notice and takedown systems, which she considered as just one means to help reduce infringement. There are statutory regimes, regimes set through case law, and others that are the result of voluntary agreements. Going into details, Thorland reviewed the information that notices must include; obligations of intermediaries upon receipt of notices; the consequences of sending improper notices; and effectiveness of the various systems in actually removing infringing material from the internet. She also mentioned the case of Italy as the first country in Europe to provide for an administrative website blocking procedure [earlier this week, AGCOM issued its first blocking order: see here]. 

#Quentincometoeurope as an enforcement
(or lack thereof) case study?

After that, it was the turn of Alexander Tsoutsanis (Institute for Information Law (IViR), University of Amsterdam, and DLA Piper) to discuss the recent Svensson decision (and prior to this, the opinions of the European Copyright Society and ALAI), and his paper Why copyright and linking can tango.

The presentations were followed by discussion with the audience and panelists Kristina Janušauskaitė (IFPI), Jan Bernd Nordemann (Boehmert & Boehmert, Berlin) and Silke von Lewinski (Max Planck Institute for Intellectual Property and Competition Law, Munich). 

Unexpectedly and without much explanation, at a certain point the IPKat #Quentincometoeurope campaign was displayed on the screen: #Fordhamgetspolitical? 

2012 - The Copyright Year

What do you mean- you didn't have time to read the 1709 Blog this year? Shame on you - but here's a quick recap of 2012. It's from my personal perspective, a UK lawyer working in the music industry, so please feel free to comment and add what you think I may have missed out. It's been a "mega" twelve months! Oh, and since it's nearly the end of 2012, can we wish you a very happy, fulfilling and prosperous 2013!

That red bus

In early January, the European Union and twenty two of its member states signed the Anti-Counterfeiting Trade Agreement (ACTA) - designed to ensure a basic system of global intellectual property protection. The signing ceremony went quietly in Tokyo (although there were some very public protests in Poland) and only five EU countries did not sign - Germany, the Netherlands, Estonia, Cyprus and Slovakia – but that was really that last success ACTA saw, as the Treaty received a global PR bashing. The  Spanish Parliament implemented the somewhat controversial Sinde law, which was planned to make it easier for content owners to target copyright and block infringing websites. In Holland a court in The Hague ordered Dutch ISPs Ziggo and XS4ALL to block access to controversial website The Pirate Bay, in order to prevent illegal downloading of music, films and games. In the UK HH Judge Colin Birss QC gave his landmark judgment in Temple Island Collections Ltd v New English Teas Ltd & another – the ‘red bus’ case with Jeremy commenting “If the learned judge's analysis, based on (among other things) the view of the Court of Justice in Case C-5/08 Infopaq as to what constitutes the protectable subject matter of an author's work, is correct, the advice which I have given law students since I first taught copyright in the 1970s is no longer reliable, that the photographer who recreates the effect of another's photograph of a public scene or monument is now a copyright infringer, and that there may now be a notion of copyright in an idea, a lay-out or a scheme for such a photograph”. Question: Can the concept of a picture of red London bus set against a stylised monochrome Houses of Parliament attract protection? Answer: yes it can - on the facts! And the MegaUpload saga began with US raids on Mega's servers, shutting down the website, and the January 19th New Zealand arrest of Kim "Dotcom " Schmitz and three associates on copyright infringement charges - and the seizure of $10 million from banks, and other assets.

MegaUpload

In February the first doubts started to trickle out in the ‘Megaupload’ case and whilst Kim ‘Dotcom’ Schmitz and his colleagues remained in custody at this point (released on bail later in the month) the case was to proving to be required reading during the year. And back to ACTA: some of the previously committed EU signatories started to voice doubt over their commitment – and the EU referred the Treaty to the European Court of Justice. In Spain the law Sinde faced a challenge in the country's Supreme Court, who agreed to hear an appeal from the Association Of Web Users who claim the law is unconstitutional – and the the Court of Justice of the European Union published its long-awaited judgment in Case C-360/10 SABAM v Netlog – and said 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 by some, which made for interesting reading for British ISPs who had just digested Mr Justice Arnold's thoughts in Newzbin 2, then compared it to the ECJ's position in SABAM v  Scarlet (Tiscal) and the provisions of Art. 15(1) of the E-Commerce Directive, and then later on the year faced another blocking order against The Pirate Bay.

The Pirate Bay

In March, as The Pirate Bay co-founder Carl Lundstrom prepared to serve his four month prison sentence under house arrest in Sweden, the current Pirate Bay organisers announced plans to put copies of their database onto servers in the sky - on "small airborne drones" connected to the mobile internet - that would have to be literally “shot down” to take the site offline.  The High Court of Justice in London ordered telecoms company O2 to hand personal details of more than 9,000 broadband subscribers to film company Golden Eye International and pornography producer and distributor Ben Dover Productions under a Norwich Pharmacal order. Leave to appeal was granted. In Europe, the ECJ handed down its decisions in two copyright cases. In the first, Public Performance (Ireland) v Ireland, Attorney General (C-162/10), a reference from the Irish High Court, we learned that communications by hotels to hotel bedrooms are communications to the public - although we didn't really learn that, as it had already been decided in the SGAE/Rafael Hoteles case.  We also learned that the ECJ did not think that Ireland was acting consistently with the Rental and Lending Directive Article 8(2) in exempting hotels from the right to equitable remuneration for the communication of sound recordings to the public.  In the second case, SCF v Marco Del Corso (C-135/10), a reference from the Court of Appeal in Turin, John explained that the ECJ had found that the playing of phonograms in dental surgeries was not such as to trigger the remuneration right, because it did not constitute a communication to the public for the purposes of the same equitable remuneration right.  Talking of remuneration, an ongoing theme all year was the paucity of royalties paid by the new online digital services such as Spotify and Vevo, with complaints from both songwriters and recording artistes, music publishers, and even independent labels, that they were being underpaid - if they were being paid at all. 

In April Australia's High Court, the nation's highest, gave a clear ruling that internet service providers are not liable for authorising copyright infringement by making their services available to people who do infringe copyright. The High Court unanimously dismissed the appeal in the case and the Court observed that iiNet had no direct technical power to prevent its customers from using the BitTorrent system to infringe copyright in the appellants' films. Rather, the extent of iiNet's power to prevent its customers from infringing the appellants' copyright was limited to an indirect power to terminate its contractual relationship with its customers. Monika reported that YouTube had lost  a dispute before the Regional Court of Hamburg (LG Hamburg) against German collecting society GEMA and YouTube was held liable under the principle of 'Störerhaftung' ('disturbance liability' - secondary liability for contributing to someone else's breach of a third party's rights) and was issued with a permanent injunction to take down a number of songs in which GEMA administers the making available rights, and was told to ensure that the songs in question do not reappear on the platform in the future. Jeremy brought us news of  Advocate General Bot's opinion in Case C-128/11 Axel W. Bierbach (liquidator of UsedSoft GmbH) v Oracle International Corp: According to Advocate General Bot: creators of computer programs may oppose the resale of 'used' licences which allow their programs to be downloaded from the internet again. However, AG Bot suggested that they may not oppose the resale of 'used' copies, downloaded by their own customers from the internet, given that their exclusive right of distribution relating to those copies is 'exhausted'. And Weird Al' Yankovic became the latest artist to file a digital royalties claim in the US in a wide ranging royalties lawsuit that accused Sony Music of improper reporting of its costs, of failing to pass on any of the damages it won from file-sharing companies and of paying him a record sale royalty on download sales when such revenues should be treated as licensing income, joining the ranks of artistes including of FBT (Eminen's producers), Cheap Trick, The Allman Brothers, Chuck D, Sister Sledge, Boz Scaggs, Whitesnake, the estate of Rick James,  Dixie Chicks, Peter Frampton, REO speedwagon, Toto, The Temptations, Rob Zombie and Kenny Rogers in the fight to get increased digital royalties based on a share of digital revenues rather than the far less attractive 'per unit' royalty based on each digital sale which are then usually then subject to further royalty reducers. Later in the year Def Leppard took the unusual step of re-recording their entire back catalogue to release themselves to circumvent record label practices and poor royalties.

At the beginning of May we reported that the High Court in London had issued orders requiring five internet service providers to block access to The Pirate Bay file sharing site. The five ISPs were Sky, Everything Everywhere, TalkTalk, O2 and Virgin Media, with BT asking for more time. Neelie Kroes, the European Commissioner for the Digital Agenda  said that the Anti Counterfeiting Trade Agreement (ACTA) was likely to follow the US’s SOPA (Stop Online Piracy Act) into the dustbin of failed legislation saying “We have recently seen how many thousands of people are willing to protest against rules which they see as constraining the openness and innovation of the internet” adding “there is a strong new political  voice, and as a voice for openness, I welcome it even if I do not always agree with everything it says on every subject … we are now likely to be in a world without SOPA and ACTA”.  And In a court ruling which has significant implications for the music industry, a Californian judge dismissed a suit by two song publishing companies aimed at preventing Victor Willis, the former lead singer of The Village People, from exercising his right to reclaim ownership of YMCA and a number of other massive Village People hits which he wrote and co-wrote in the 1970s. The right to reclaim arose when the Copyright Act amendments went into effect in 1978 and it meant that songwriters could terminate copyright grants to publishers and record labels 35 years later. Also in the USA, the US Supreme Court  refused to hear the Joel Tenenbaum case on appeal (in a case brought by the Recording Industry Association Of America) which resulted in a win for the RIAA and damages of $675,000 awarded by the jury for illegally sharing 30 songs online. In the yo-yo world of US copyright infringement damages in this and the Jamie Thomas-Rasset case, the damages were then reduced 90% by the trial judge Nancy Gertner on constitutional grounds, but the appeals court subsequently criticised the judge's process, and reinstated the $675,000 damages sum. And Clear Channel, the biggest radio company in the US with 850 stations, entered into a landmark agreement with country music label Big Machine which will see the broadcaster pay a royalty for the use of sound recordings on it's terrestrial radio channels for the first time.

In June the European Parliament's influential International Trade Committee recommended that members of the Parliament vote against adopting the Anti Counterfeiting Trade Agreement (ACTA), prompting an angry backlash from trade groups representing the content industries including the record labels international body the IFPI who said in statement "The recommendation by the European Parliament's International Trade Committee that the Parliament should reject ACTA is a disappointment to Europe's creative, innovative and manufacturing sectors, which employ over 120 million people across Europe and depend on intellectual property to support and grow their businesses". Wikipedia founder James (Jimmy) Wales came out in support of Richard O'Dwer, the 24 year old multimedia student at Sheffield Hallam University who set up TVshack.net, making some £140,000 in the process, and who was then facing extradition from the UK to the USA on copyright infringement charges. In the US the Electronic Frontiers Foundation said that “In an important ruling for free speech” the Court of Appeals for the Seventh Circuit had affirmed that a parody of a popular online video "What What (In the Butt)" was a clear case of fair use and that the District Court's early dismissal of the claim was correct and that early dismissals can be appropriate. In France  the Syndicat National de l'Edition (SNE, the French Publishers Association) and the Société des Gens de Lettres (an authors' group) put an end to a six year long running litigation against Google, over its project of digitising out-of-print books and here on the 1709 blog, Mira T. Sundara Rajan's guest post "Getting Paid is a Moral Right, too! Why Creative Commons Gets itWrong" became one of the most controversial pieces to appear  - and has certainly attracted some of the strongest criticism – and it's well worth another look to see what Mira, now a permanent 1709 nlogger, was suggesting .

Am I legal?

In July the judgment of the Court of Justice of the European Union in Case C-128/11 UsedSoft GmbH v Oracle International Corp was given, holding that "An author of software cannot oppose the resale of his ‘used’ licences allowing the use of his programs downloaded from the internet. The European Parliament voted against the much maligned Anti-Counterfeiting Trade Agreement. And they voted against it in some numbers with just 39 in favour, 165 abstained and 478 were against - interesting as you will remember that all but 5 of the EU's 27 member states have already signed up to the Treaty. In New Zealand statistics from the Federation Against Copyright Theft (FACT) claimed  that since New Zealand's "Skynet Act" three-strike law was implemented in September 2011, the number of illegally viewed films in the top 200 online has dropped from 110,000 to 50,000, i.e. by just over 50%. And in the UK  Richard Hooper published his final report on the creation of a UK based Digital Copyright Exchange. The report, "Copyright Works:  streamlining copyright licensing for the digital age" set out four main recommendations under the remit of setting up a not for profit industry led and industry funded Digital Copyright Exchange and the "Copyright Hub".

ivi - I am not a cable network

In August  the US based television streaming service ivi suffered a major setback after the federal appeals court upheld a lower court’s temporary injunction against the controversial company in a case brought by ABC, NBC, Universal, Univision, Fox Television, CBS and several other broadcasters, asserting that the startup was infringing their copyrights by live-streaming their programming without permission. The US Court of Appeals for the Second Circuit said that allowing ivi to resume service could “threaten to destabilize the entire industry” and inflict irreparable damage on the networks.   It also determined that ivi was not legally the same as a cable network, noting in particular that it “retransmits broadcast signals nationwide, rather than to specific local areas". Also in the US, Federal authorities  seized three domains which they believed were involved in the illegal distribution of pirated Android apps.  In Germany the  Federal Court of Justice, the Bundesgerichtshof, held that internet service providers (ISPs) must disclose the name and address of illegal file sharers when requested by copyright owners. In the UK Anton Vickerman, the owner of TV streaming links site SurfTheChannel, was sentenced to four years custody at Newcastle Crown Court  after being found guilty of conspiracy to defraud for “facilitating” copyright infringement under the Criminal Justice Act. China released a second draft revision of its Copyright Law for public comment, dropping the controversial Article 46 that raised an outcry from Chinese musicians. In India the Madras High Court passed an interim order prohibiting a dozen ISPs and one named individual from uploading the Tamil film "Mirattal" or any portion of it to the Internet. The order also prohibited facilitating downloads of the film. In addition, the Court granted five "John Doe" orders imposing the same restrictions on persons whose identity was not known at the time that the order was granted. And Google said it had taken significant step against online piracy after saying it would alter its search algorithms to favour websites that offered legitimate copyrighted movies, music and television. Google said that it's algorithms would now take into account the number of valid copyright removal notices sites have received and  sites with multiple, valid complaints about copyright infringement may appear lower in Google search results.

So, September! Time for Neelie Kroes, Vice-President of the European Commission responsible for the Digital Agenda, to give a speech entitled "Copyright and innovation in the Creative Industries" addressing why, in a changing digital age, copyright reform is the right way to support the creative sector.  She began by saying that the debate on copyright often involves extreme positions, rigid views, and emotive arguments but that a pragmatic rather than philosophical approach is necessary and commenting that "In 1998, Mark Zuckerberg was 14. Today, almost one billion people around the world actively use Facebook, to share photos, videos, and ideas" pointed out that the world is changing rapidly and that the internet had opened that the creative space up to individuals who can publish their books, blogs, songs and art easily and globally. Staying with Europe, the proposal for a directive on certain permitted uses of orphan works was approved by the European Parliament who voted in favour of the proposed directive by 531 votes to 11, with 65 abstentions. Bruce Willis was said to be considering legal action against technology giant Apple over his desire to leave his digital music collection to his daughters having discovered that, like anyone who has bought music online, he did not actually own the tracks but is instead was  ‘borrowing’ them under a licence. The story was probably a hoax, but made for a great debate! And Simon Clark's guest blog in the 1709 caused quite a stir. 'Why the Meltwater case won't break the internet' provoked widespread comment and indeed a response here , all debating whether Meltwater was a fair and reasonable victory for rights owners - or a chilling clamp down on the freedom to link and browse online.

And what of October I hear you ask? Well my fellow bloggers were busy again. The month started with the news that illegal downloaders in Japan now face prison terms of up to two years and fines of nearly 2 million yen (U.S. $25,679 or £15,900) from today. The Japanese government said that the move was aimed to protect the film industry and stop falling music sales in the World's second largest music market, where record industry officials estimate only one in 10 downloads are legally purchased. The Recording Industry Association of Japan says the legal download music market shrank 16% in 2011, the second consecutive year of decline. The slide comes despite global sales of digital music increasing 8% last year to $5.2 billion. In Europe, Eleonora reported that  the Orphan Works Directive, which has long been in the pipeline, was finally been adopted by the Council. The Council's approval marks the final step in the legislative procedure meaning that the Directive will formally enter into force and Member States will then have two years to transpose it into national law. And Google hit the news , firstly after the search behemoth sent a dramatic letter to several French ministerial offices, threatening to exclude French media sites from search results if France goes ahead with plans to make search engines pay for content (after a number of  leading French newspaper publishers had called on President Hollande's government to adopt a law to force internet search engines such as Google to pay for content )and in other aggregator v publisher battle, 154 members of the Brazilian National Association of Newspapers (ANJ) opted out of the Google News service.

Frog Wars - Disney v Brightspark

November – the nights a drawing in over the Northern hemisphere – and we are nearly there! The Swedish court, the Svea hovrätt, made a request for a preliminary ruling from the CJEU regarding the infringement of exclusive rights to make copyright protected work publicly available by a third party subscription search engine. The case is Nils Svensson, Sten Sjögren, Madelaine Sahlman, Pia Gadd v Retreiver Sverige AB (Case C-466/12). In Finland an ill advised 8am police home raid resulted in the seizure of a nine year old girl's laptop which was used in the failed attempt illegal download  of a song by pop star Chisu from The Pirate Bay website. As Iona commented, it is probably one of the first Winnie-the-Pooh laptops to be seized for attempted illegal activity. Talking of hardware, in The Netherlands Hewlett-Packard, Acer, Dell and Imation filed a claim against the Dutch government at the District Court of the Hague claiming damages caused by the new, higher, private copying levies which were extended to  apply to all hardware from January 2013. And the Spanish Government’s public consultation over the new draft regulation for collecting fair compensation for private copying ended. The consultation was set up after the December 2011 abolition of of the Spanish copyright levy:  it's main objective is to establish a new system to compensate right holders for private copying. Taking a look at Germany, Iona blogged asking the question “should parents be legally responsible for their teenager's actions?” and commented that  “As whilst teenagers are a law unto themselves”  the thought of being legally responsible for one is pretty frightening – and highlighted the decision of the German Federal Court, der Bundesgerichtshof, which said that the parents of a 13 year-old file-sharer could not be held responsible for their son's infringement. Further, they could not be required to monitor or hinder his activity online. Phew! Asim (our French Kat) reported that the  long-running court battle between French FTA television broadcaster M6  and the publisher of a website that gave access to the broadcaster's catch-up TV sites (without permission) ended after the French Supreme Court (Cour de Cassation) rejected the appeal against the appellate court's ruling in favour of the publisher. Richard O'Dwyer, the 24 year old UK student who created TVShack, escaped extradition to the USA. O'Dwyer had done a plea bargain - whereby he would attend the USA and visit a court - and pay over a limited amount of compensation, avoiding both extradition and a criminal trial for the infringements. Iona posted a very interesting blog asking the very timely question "Is the term of protection of copyright too long?", In the US, the debate over who pays what (if anything) to SoundExchange and ASCAP/BMI for using recorded music and songs on internet, satellite and terrestrial radio services continued, and finally, Disney won it’s battle with UK independent production company Brightspark Productions after claiming it was misleading consumers with a series of budget family DVDs which appear to be copycat versions of Disney's own popular animated films (but when viewed most certainly were not).

It’s December – its nearly Christmas, but no time for turkey and Christmas pud yet. The Pirate Party in the UK disabled it's proxy - which provided access to The Pirate Bay, following a legal challenge from UK record labels trade body the BPI. Iona let us know that the Canadian Supreme Court had decided in Cogeco Cable Inc, et al v. Bell Media Inc et al that Canada's broadcast regulator does not have the authority to impose a "value for signal" plan under which television broadcasters would charge cable and satellite firms for retransmission of their content. This seems to be the opposite to what has been decided in Europe - in Airfield the CJEU found that satellite package providers who retransmit content give access to a "new public" and must therefore get authorisation to retransmit the work. The new Spanish copying levy was passed into law. Eleonora reported that the EU Commission held an orientation debate on content in the Digital Economy to address "whether the copyright framework remains fit for purpose in the digital context". In the UK in the aftermath of the Hargreaves Review, a group of creators and copyright owners urged the UK government to reconsider impending changes to copyright law which they say would seriously restrict the ability of British creators and copyright holders to license and earn revenue from their rights - by widening and redefining exceptions to copyright infringement - perhaps to something more akin to the US 'Fair Use' doctrines. The press release pre-empted the Government's Modernising copyright, a modern, robust and flexible framework which detailed planned revisions to 'fair dealing'. The Business Secretary Vince Cable outlined his plans to have a dedicated team at the City of London police force to tackle IP crimes And three EC commissioners, Michel Barnier (Internal Market and Services), Androulla Vassilliou (Education, Culture, Youth) and another mention for Neelie Kroes (Digital Agenda), jointly issued a press release which detailed the four issues they thought should be addressed by "stakeholder dialogue" for copyright reform - cross border access and portability of services to promote multi territory access, user generated content and licensing of small scale users, efficient solutions for text and data mining, and commercial and non commercial uses in the audio-visual sector. And finally, It didn't take Facebook long to backtrack over it's controversial policy changes that it intended to make regarding photo-sharing app Instagram. In a move that reminded me of Myspace's ill advised policy of trying to "own" it's own users' music, Facebook said that user's photos would be owned and could be potentially exploited (in perpetuity) by the web giant without notification or payment,effectively transforming the Web site into the world's largest stock photo agency. Cue the angry backlash, an apology and the terms were swiftly reverted to their 2010 format, but the damage from this and from earlier "user hostile" changes to privacy settings, was done. So as 2012 ends, do we see the beginning of the end  of Facebook?

Let's hope 2013 proves just as interesting!

Last year's review here