EU court decides ISPs can’t be forced to block file sharers

24 Nov 2011

UPDATE: Europe’s highest court, the European Court of Justice, has decided that internet access is a human right and that EU law precludes injunctions being taken against internet service providers (ISPs), requiring them to block users from illegally sharing music and video files.

The European Court of Justice decided this morning that in the dispute between Scarlet Extended SA, an ISP owned by Belgacom, and Belgian management company SABAM, that the internet is a fundamental human right for all Europeans.

The decision will throw into disarray plans in Ireland to implement statutory instruments that would have given judges the power to grant injunctions against ISPs in relation to copyright infringement cases.

“In its judgment delivered today, the court points out, first of all, that holders of intellectual-property rights may apply for an injunction against intermediaries, such as internet service providers, whose services are being used by a third party to infringe their rights. The rules for the operation of injunctions are a matter for national law.

“However, those national rules must respect the limitations arising from European Union law, such as, in particular, the prohibition laid down in the E-Commerce Directive on electronic commerce under which national authorities must not adopt measures which would require an internet service provider to carry out general monitoring of the information that it transmits on its network,” the European Court of Justice ruled.

While ISPs may breathe a sigh of relief, the judgment will be a blow for copyright holders fighting to protect revenues amid wholesale theft of copyrighted content on a variety of platforms.

“It is true that the protection of the right to intellectual property is enshrined in the Charter of Fundamental Rights of the EU. There is, however, nothing whatsoever in the wording of the Charter or in the Court’s case law to suggest that that right is inviolable and must for that reason be absolutely protected.”

Internet access is a fundamental human right in Europe

In Scarlet’s case, the injunction called for the installation of a filtering system to protect copyright holders. However, the court decided that such an injunction would infringe on Scarlet’s freedom to do business and require it to install an expensive computer system at its own expense.

The court also decided that such a filtering system would also infringe the fundamental rights of customers – their right to protect personal data and receive or send information – which are safeguarded in the Charter of Fundamental Rights of the EU.

The system that the copyright holders wanted to put in place would have done a systematic analysis of users’ IP addresses, which are there to protect personal data.

“Secondly, the injunction could potentially undermine freedom of information since that system might not distinguish adequately between unlawful content and lawful content, with the result that its introduction could lead to the blocking of lawful communications.

“Consequently, the court finds that, in adopting the injunction requiring Scarlet to install such a filtering system, the national court 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 right to receive or impart information, on the other.”

Response to court’s decision in Ireland

It emerged earlier in the year that statutory instruments were being prepared in Ireland that would have given judges the power to grant injunctions against ISPs in relation to copyright infringement cases.

This is believed to have been in response to the outcome of UPC Communications Ireland Limited’s High Court victory in October last year in its opposition to the “three strikes” rule sought by Warner Music, Universal Music, Sony BMG and EMI Records aimed at illegal downloading and file sharing via the internet.

In his judgment, Mr Justice Peter Charleton held that laws seeking to identify and disconnect copyright infringers were not enforceable in Ireland, regardless of the record companies’ complaints.

He said he was cognisant of the financial harm being suffered by record labels due to illegal downloading. “This not only undermines their business but ruins the ability of a generation of creative people in Ireland, and elsewhere, to establish a viable living. It is destructive of an important native industry,” Charleton said in October.

However, Ronan Lupton of licensed telecoms group ALTO hailed the decision of the court as an opportunity to put in place a more proportionate way of tackling the issue of copyright infringement.

“The European Court of Justice has upheld the logic that the internet is a fundamental human right and that injunctions blocking access infringe those rights and are disproportionate and discriminate against customers.

“Today’s case proves that the highest court in Europe believes access is a right and injunctions are disproportionate to users’ rights.”

Lupton said a proportionate balance has to be struck between the rights of copyright holders, the ISPs and the end users.

An important legal precedent for ISPs

The decision was also welcomed by the ISP Association of Ireland (ISPAI). “This outcome is of particular importance for us since the Department of Jobs, Enterprise and Innovation in June tabled wording for a Statutory Instrument which would purportedly bring Ireland into line with its European obligations under the Copyright and E-Commerce Directives.

“The injunctions regime provided for in the broad wording of the proposal, however, could potentially encompass not only blocking but mass filtering obligations and furthermore, the eventual introduction of a graduated response system is not inconceivable in these conditions. Today’s ruling will certainly set limits on this.

“The CJEU has stated that the imposition of such an injunction would result in a serious infringement of Scarlet’s freedom to conduct its business as it would require the installation of costly and complicated measures exclusively at its own expense. ISPAI has always condemned the improper use of our members’ networks to illicitly obtain copyrighted works, and has continually advocated the development of new business models exploiting the Internet to the benefit of musicians and artists.

“If measures were to be imposed on our members, they should never interfere with their freedom to conduct legitimate business or force them to expend unreasonable costs. Today’s ruling sets an extremely important precedent for ISPs and will undoubtedly be seen as a landmark judgment for the digital age,” the ISPAI said.

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years