ECJ: Intermediaries can be responsible for blocking copyright infringement

The Court of Justice of the EU last week decided Case C‑314/12,

REQUEST for a preliminary ruling under Article 267 TFEU from the Oberster Gerichtshof (Austria), made by decision of 11 May 2012, received at the Court on 29 June 2012, in the proceedings

UPC Telekabel Wien GmbH

v

Constantin Film Verleih GmbH,

Wega Filmproduktionsgesellschaft mbH

A panel of five judges, not unexpectedly given the advice of the Advocate General, decided that ISPs can be required to block access by its customers to a website which infringes copyright.

A first glance at the ruling suggested there might be a conflict here with the earlier decision of the Court in the 2008 Promusicae case, noting that privacy trumps copyright. But the Court carefully steers a route past that earlier decision.

Firstly they conclude, at paragraph 40, that

"Article 8(3) of Directive 2001/29 must be interpreted as meaning that a person who makes protected subject-matter available to the public on a website without the agreement of the rightholder, for the purpose of Article 3(2) of that directive, is using the services of the internet service provider of the persons accessing that subject-matter, which must be regarded as an intermediary within the meaning of Article 8(3) of Directive 2001/29."

ISPs are 3rd parties potentially making copyright infringing materials available to their customers. The preventative proactive copyright protective nature of the 2001 directive means that no proof that an ISP's customers are accessing the alleged copyright materials is required, before said ISP can be required to block an alleged infringing source.

The Court then asks if ordering an ISP to block a website offering infringing works undermines fundamental rights recognised by EU law. They (paragraph 46)  re-emphasise the Promusicae decision that copyright cannot undermine fundamental rights:

"The Court has already ruled that, where several fundamental rights are at issue, the Member States must, when transposing a directive, ensure that they rely on an interpretation of the directive which allows a fair balance to be struck between the applicable fundamental rights protected by the European Union legal order. Then, when implementing the measures transposing that directive, 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 (see, to that effect, Case C‑275/06 Promusicae [2008] ECR I‑271, paragraph 68)."

and note that court ordered web blocking to negate copyright infringement constitutes:

"a conflict between (i) copyrights and related rights, which are intellectual property and are therefore protected under Article 17(2) of the Charter, (ii) the freedom to conduct a business, which economic agents such as internet service providers enjoy under Article 16 of the Charter, and (iii) the freedom of information of internet users, whose protection is ensured by Article 11 of the Charter."

They go on to say the Court doesn't get to specify the web blocking measures. That decision is in the hands of the ISP. Such injunctions do amount to an interference with an ISP's freedom to conduct a business but this does not involve "unbearable sacrifices". As long as the ISP takes "reasonable measures" to block their customers access to the alleged copyright infringing materials, copyright holders have no cause of direct action against them.

The Court is very vague, however, on what these "reasonable measures" should be. It's for the ISP concerned, not a court, to decide the precise blocking methods (para 52) that should be deployed. Yet the Court are also apparently adamant (para 54) that intermediaries should have legal certainty on the measures they need to take to avoid penalty.

The ISP must also insure the blocking does not interfere with their customers' freedom of information and that the blocking techniques used should be "strictly targeted" to terminate the copyright infringement whilst not undermining fundamental rights. To that end from the the customers' fundamental rights perspective, they should be able to challenge any blocking processes implemented by the ISP in their national courts (para 57):

"It must be possible for national courts to check that that is the case. In the case of an injunction such as that at issue in the main proceedings, the Court notes that, if the internet service provider adopts measures which enable it to achieve the required prohibition, the national courts will not be able to carry out such a review at the stage of the enforcement proceedings if there is no challenge in that regard. Accordingly, in order to prevent the fundamental rights recognised by EU law from precluding the adoption of an injunction such as that at issue in the main proceedings, the national procedural rules must provide a possibility for internet users to assert their rights before the court once the implementing measures taken by the internet service provider are known"

Interestingly enough, though it doesn't appear necessary, at paragraph 61 the Court states -

"The Court notes that there is nothing whatsoever in the wording of Article 17(2) of the Charter to suggest that the right to intellectual property is inviolable and must for that reason be absolutely protected (see, to that effect, Scarlet Extended, paragraph 43)."

Then go on to conclude on the substantive questions before them:

"the Court (Fourth Chamber) hereby rules:

1.      Article 8(3) of Directive 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 must be interpreted as meaning that a person who makes protected subject-matter available to the public on a website without the agreement of the rightholder, for the purpose of Article 3(2) of that directive, is using the services of the internet service provider of the persons accessing that subject-matter, which must be regarded as an intermediary within the meaning of Article 8(3) of Directive 2001/29.

2.      The fundamental rights recognised by EU law must be interpreted as not precluding a court injunction prohibiting an internet service provider from allowing its customers access to a website placing protected subject-matter online without the agreement of the rightholders when that injunction does not specify the measures which that access provider must take and when that access provider can avoid incurring coercive penalties for breach of that injunction by showing that it has taken all reasonable measures, provided that (i) the measures taken do not unnecessarily deprive internet users of the possibility of lawfully accessing the information available 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 internet users who are using the services of the addressee of that injunction from accessing the subject-matter that has been made available to them in breach of the intellectual property right, that being a matter for the national authorities and courts to establish."

Whilst I understand why the Court does not want to specify particular blocking or filtering techniques, it seems that copyright owners and ISPs and other internet intermediaries are left in something of a legal limbo.

• Under Article 8(3) of Directive 2001/29/EC, intermediaries can be ordered by a court to block sites thought to be distributing unauthorised copyright materials
• It does interfere with intermediaries' freedom to conduct a business to implement such measures but not unbearably so
• It is for the intermediaries not the Court to decide what specific blocking measures should be taken
• These measures, however, must - be 1. reasonable 2. strictly targeted 3. effectively protect the copyright holder 4. effectively protect fundamental rights of the ISP's customers
• Intermediaries have no guidance from the Court on what is meant by "reasonable" blocking measures or how to balance fundamental rights with the (not-inviolable) right to intellectual property
• If intermediaries don't get their measures sufficiently "reasonable" to make their customers and the requisite copyright holders happy, they leave themselves open to legal challenge from one or other or both

ISPs can be ordered to block but neither they nor the offended copyright holders know what kinds of specific blocking measures can be considered reasonable.  Given such legal uncertainty and the crude nature of software filters, I suspect the ultimate outcome will be that ISPs will tend towards over-blocking, since the risks of being sued by copyright holders for facilitating infringement are significantly higher than those of being sued by individual customers for breaching their fundamental rights.