ECJ rule out blanket filtering in Scarlet v SABAM

The European Court of Justice has published its decision in the case of Scarlet v SABAM, Case C‑70/10. This is the Belgian case where the entertainment industry and creative artists representative body SABAM had sued Scarlet, an ISP, in an effort to have the respondent compelled to install filters. The filters desired were pretty broad and crude, though, and the Court, predictably, ruled in favour of the ISP, on a narrow interpretation of the facts.

Expect a positive spin on the decision from both sides in spite of the apparently crystal clear outcome in favour of Scarlet.

The conclusion was:

"the Court (Third Chamber) hereby rules:

Directives:

–        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 (‘Directive on electronic commerce’);

–        2001/29/EC of the European Parliament and of the Council of 22 May 2001 on the harmonisation of certain aspects of copyright and related rights in the information society;

–        2004/48/EC of the European Parliament and of the Council of 29 April 2004 on the enforcement of intellectual property rights ;

–        95/46/EC of the European Parliament and of 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; and

–        2002/58/EC of the European Parliament and of the Council of 12 July 2002 concerning the processing of personal data and the protection of privacy in the electronic communications sector (Directive on privacy and electronic communications),

read together and construed in the light of the requirements stemming from the protection of the applicable fundamental rights, must be interpreted as precluding an injunction made against an internet service provider which requires it to install a system for filtering

–        all electronic communications passing via its services, in particular those involving the use of peer-to-peer software;

–        which applies indiscriminately to all its customers;

–        as a preventive measure;

–        exclusively at its expense; and

–        for an unlimited period,

which is capable of identifying on that provider’s network the movement of electronic files containing a musical, cinematographic or audio-visual work in respect of which the applicant claims to hold intellectual-property rights, with a view to blocking the transfer of files the sharing of which infringes copyright."

The bottom line is that the Court believed the ISP level filtering demanded by SABAM, a system to filter:

– all electronic communications passing via its services, in particular those involving the use of peer-to-peer software;

– which applies indiscriminately to all its customers;

– as a preventive measure;

– exclusively at its expense; and

– for an unlimited period,

was over-reaching. That the decision was so short - a mere 55 paragraphs - and clear is an indication that it wasn't that difficult a challenge for the Court in relation to the specific facts of the case.

I can only agree with Jeremy Phillips, however, that the decision is quite narrowly focused and the race will now be on to see what kind of filtering will be considered acceptable. Newzbin 2 anyone?

The Court makes reference to the excessive surveillance features of the SABAM demanded filtering system and the disproportionate interference with

(a) the right of the ISP to engage in commercial enterprise and
(b) the fundamental rights of the individual

that such filtering would result in.

They also refer approvingly to the earlier ECJ Promusicae case which emphasised  the need to respect intellectual property rights but not at the expense of more fundamental freedoms such as privacy and free expression. The key elements are:

"39      Preventive monitoring of this kind would thus require active observation of all electronic communications conducted on the network of the ISP concerned and, consequently, would encompass all information to be transmitted and all customers using that network.

40      In the light of the foregoing, it must be held that the injunction imposed on the ISP concerned requiring it to install the contested filtering system would oblige it to actively monitor all the data relating to each of its customers in order to prevent any future infringement of intellectual-property rights. It follows that that injunction would require the ISP to carry out general monitoring, something which is prohibited by Article 15(1) of Directive 2000/31...

43      The protection of the right to intellectual property is indeed enshrined in Article 17(2) of the Charter of Fundamental Rights of the European Union (‘the Charter’). There is, however, nothing whatsoever in the wording of that provision or in the Court’s case-law to suggest that that right is inviolable and must for that reason be absolutely protected.

44      As paragraphs 62 to 68 of the judgment in Case C‑275/06 Promusicae [2008] ECR I‑271 make clear, 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...

47      In the present case, the injunction requiring the installation of the contested filtering system involves monitoring all the electronic communications made through the network of the ISP 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 future works that have not yet been created at the time when the system is introduced.

48      Accordingly, such an injunction 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, 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.

50      Moreover, the effects of that injunction would not be limited to the ISP concerned, as the contested filtering system may also infringe the fundamental rights of that ISP’s customers, 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.

51      It is common ground, first, that the injunction requiring installation of the contested filtering system would involve a systematic analysis of all content and the collection and identification of users’ IP addresses from which unlawful content on the network is sent. Those addresses are protected personal data because they allow those users to be precisely identified.

52      Secondly, 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. Moreover, in some Member States certain works fall within the public domain or can be posted online free of charge by the authors concerned.

53      Consequently, it must be held that, in adopting the injunction requiring the ISP to install the contested filtering system, the national court concerned would not be respecting the requirement that a fair balance be struck between the right to intellectual property, on the one hand, and the freedom to conduct business, the right to protection of personal data and the freedom to receive or impart information, on the other.

54      In the light of the foregoing, the answer to the questions submitted is that Directives 2000/31, 2001/29, 2004/48, 95/46 and 2002/58, read together and construed in the light of the requirements stemming from the protection of the applicable fundamental rights, must be interpreted as precluding an injunction made against an ISP which requires it to install the contested filtering system."

So in summary the SABAM required filtering system is crude and damaging because it doesn't respect the right to privacy, freedom of expression or the freedom to conduct a business. The case is a nice illustration of why Cory Doctorow argues that there is no longer such a thing as copyright policy but doesn't really get us a whole lot closer to a ceasefire in the copyright wars.

Update: ECJ press release on the decision is also available. What's interesting about the press release is that it states the decision of the Court in stronger terms than I suspect the Court intended:

"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
Such an injunction does not comply with the prohibition on imposing a general monitoring obligation on such a provider, or with the requirement to strike a fair balance between, on the one hand, the right to intellectual property, and, on the other, the freedom to conduct business, the right to protection of personal data and the freedom to receive or impart information"

A reading of the press release alone may have led some members of the press to interpret the decision as meaning that filtering on copyright protection grounds is universally prohibited. What the Court actually said was that the specific kind of filtering demanded by SABAM would breach a plethora of directives on ecommerce, copyright & related rights, data protection and intellectual property enforcement.

Update 2: SABAM are disappointed.
Glyn Moody wonders if it is a turning point in EU law.

Minister: UK music industry a huge success

Largely unremarked in the mainstream press the Parliamentary Under-Secretary of State for Culture, Olympics, Media and Sport, Ed Vaizey, (and other MPs) had some very upbeat things to say about the UK music industry in the House of Commons yesterday. His contribution to the discussion begins at 1.49pm.

"I congratulate my hon. Friend the Member for Selby and Ainsty (Nigel Adams) on securing this important debate. The fact that so many hon. Members have attended, intervened and made speeches shows that there is large-scale recognition throughout the House of the success of the music industry, and support for it...

We talked about the huge success of the British music industry—and it is a staggering success, with almost £4 billion of sales. Britain is the only country apart from the United States and Sweden that is a net exporter of music..

We have a thriving and vibrant music scene...we have a vibrant music ecology in this country..."

Sadly he also engaged in loose platitudes about "intellectual property theft", the alleged dazzling brilliance of the digital economy act and the Newzbin blocking activities and vague references to the Hargreaves report.

It does beg the question though that if the UK music industry is doing so spectacularly well, why so much energy continues to be expended on the expansion of copyright?  It would also be interesting from an economic perspective to see the underlying evidence for the suggestion that it is currently a nearly £4 billion industry and what specifically that £4 billion entails.