October 04 2010
In Belgium, the fight against illegal downloads is making headlines. Two legislative proposals(1) have recently been placed before the Federal Parliament to address the issue of illegal downloading and to establish criminal penalties for illegal downloaders. The first proposal sets out a system of graduated response, following the example of existing French IP legislation,(2) while the second proposal supports the establishment of a global licensing system.
However, far from being confined to the parliamentary chamber, the issue is also being contested before the courts. At the head of the anti-piracy forces is the Belgian Society of Authors, Composers and Publishers (SABAM), the country's main collecting society. SABAM's strategy has been to tackle illegal downloading by suing the intermediaries who, in its opinion, are the only parties capable of implementing the necessary technical measures to stop illegal downloading. Two such cases between SABAM and online service providers are pending. In both cases, questions have been referred to the European Court of Justice (ECJ) for a preliminary ruling. The court's answers will doubtless fuel the debate that has raged since the ECJ judgment in Promusicae.(3)
In the first case, pending before the Brussels Court of Appeal, SABAM sought an injunction against internet service provider Tiscali, which has since changed its name to Scarlet. SABAM asked the court to order Scarlet to implement measures on its network that would prevent its clients from infringing the IP rights of SABAM-affiliated authors by illegally downloading their works using peer-to-peer networks.
The arguments before the court of first instance were long, especially on the question of whether it would be technically possible for Scarlet to filter and block the transfer of the data in question. The court found in favour of SABAM and ordered Scarlet to:
"make the infringements of copyright cease by making it impossible, in any form, via peer-to-peer software, for its clients to send or receive electronic files containing musical works from the SABAM repertory."
Scarlet appealed on the grounds that it was technically impossible for it to comply with the order. Several other professional associations have joined the proceedings, which has led to the dispute being seen as a test case.
The arguments before the Brussels Court of Appeal centred around two questions. First, how and to what extent are intermediaries liable? Second, is the fight against illegal downloading compatible with EU data protection law?
Regarding the first question, Scarlet argued that the filtering and blocking measures that it would have to implement in order to comply with the first instance judgment would effectively impose a general surveillance obligation on it in respect of its customers' use of the Internet. This would breach Article 21 of the E-commerce Act, which transposed Article 15 of the EU E-commerce Directive (2000/31/EC) into Belgian law, and which states that "providers have no general obligation to monitor the information which they transmit or store, nor a general obligation actively to seek facts or circumstances indicating illegal activity". EU member states may not impose a general surveillance obligation on Internet providers. In addition, Scarlet argued that the judgment breached the liability exemption for intermediaries enshrined in Article 12 of the directive (transposed by Article 18 of the act). In this respect, even if SABAM did not challenge the existence of this liability exemption for intermediaries, it had previously been stated that:
"both EU Directive 2000/31/EC and EU Directive 2001/29/EC confirm that this exemption does not prevent injunctive relief from being sought against intermediaries, as these actions are completely separate from any question of the intermediaries' liability."
In response to the second question, SABAM asserted that there was no risk of incompatibility, since national data protection legislation(4) did not apply. According to SABAM, the filtering system that Scarlet would have to install would not collect and store the users' internet protocol addresses and therefore would not constitute personal data processing. Moreover, SABAM challenged the assertion that internet protocol addresses could be considered 'personal data' within the meaning of the law. It also stated that even if the law were deemed to apply, any such data processing should be considered legal because it would be performed by Scarlet as a legal obligation (ie, to comply with a court order).
Scarlet maintained that the blocking and filtering measures it would have to adopt to comply with the court order would force it to process the internet protocol addresses of its customers. It argued that these addresses are personal data, the processing of which would be subject to data protection legislation. Scarlet also challenged SABAM's assertion that such data processing could be justified under existing data protection law.
Analysis and reference
The court's priority was to establish whether the injunction sought by SABAM on the basis of Article 87(1) of the Copyright Act (transposing Article 11 of the EU Enforcement of IP Rights Directive (2004/48/EC)) complied with EU law, in particular the liability exemption for intermediaries laid down in the E-commerce Directive. Although the court found much food for thought in the Promusicae judgment, it noted many differences between the cases. Among other things, it noted that in Scarlet it was faced with an alleged breach of privacy a priori, not a postiori. The court considered that the arguments in the Promusicae judgment were insufficient to allow it to reach a decision. Therefore, it decided to refer two questions to the ECJ:
"1) Do EU Directives 2001/29/EC and 2004/48/EC, in conjunction with EU Directives 95/46/EC, 2000/31/EC and 2002/58/EC, construed in particular in the light of Articles 8 and 10 of the European Convention on the Protection of Human Rights and Fundamental Freedoms, permit member states to authorise a national court, before which substantive proceedings have been brought and on the basis merely of a statutory provision that: 'They [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 an Internet Service Provider (ISP) to introduce, for all its customers, in abstracto and as a preventive measure, exclusively at the cost of that ISP and for an unlimited period, a system for filtering all electronic communications, both incoming and outgoing, passing via its services, in particular those involving the use of peer-to-peer software, in order to identify on its network the sharing of electronic files containing a musical, cinematographic or audio-visual work in respect of which the applicant claims to hold rights, and subsequently to block the transfer of such files, either at the point at which they are requested or at which they are sent?
2) If the answer to question 1 is in the affirmative, do those directives require a national court, called upon to give a ruling on an application for an injunction against an intermediary whose services are used by a third party to infringe a copyright, to apply the principle of proportionality when deciding on the effectiveness and dissuasive effect of the measure sought?"(5)
The second case involving SABAM was brought against the social networking website Netlog. SABAM claimed that Netlog allowed its customers to store illegal data on Netlog's servers. In response, Netlog cited Article 21(1) of the E-Commerce Act (which transposes Article 15 of the E-commerce Directive). As in its case against Scarlet, SABAM argued that in cessation proceedings, issues of liability are irrelevant to the debate, so there can be no question of violation of Article 15 or of any equivalent national provisions.
The argument, which had failed to convince the Brussels Court of Appeal in Scarlet, failed again before the Brussels Court of First Instance. The court decided to refer the same questions to the ECJ, except that in this case the intermediary concerned was a web-hosting entity, not an Iiternet access provider.
In the meantime, the Brussels Court of First Instance refused to uphold SABAM's claim, as granting it would have required Netlog to install a total filter, which would potentially represent a breach of its customers' right to privacy.
Following Promusicae, these two cases illustrate the complexity of the problem of illegal downloading. In particular, both the national legislature and judges, lacking clear guidance on the subject, have struggled to respond appropriately. The attempts to prevent the phenomenon have raised questions of law in different areas that must be answered before progress can be made. The two cases show how difficult it will be to answer these questions, and demonstrate that the judgment in Promusicae is far from being a complete answer.
In justifying its reference to the ECJ, the Brussels Court of Appeal observed that the circumstances of the Scarlet case differed from those in Promusicae. The court stressed that, in the case before it, the alleged data processing would take place a priori. However, SABAM rejected the idea that data processing would need to occur, and argued that in consideration of the balance to be struck between the different areas of EU law, the court should rule on which instrument of EU legislation effectively applies to the case in practice.
Beyond the differing circumstances of the subsequent cases, the impression remains that the Promusicae judgment did not live up to expectations. Far from providing a clear and definitive answer to the question of striking a balance between the different areas of law, it leaves member state judges with a wide margin of manoeuvre and a high degree of responsibility, with which many have shown themselves to be uncomfortable. The judges of the Belgian courts clearly feel insufficiently enlightened by the judgment, as is clear from the questions referred to the ECJ. Until the ECJ makes its position clearer than in Promusicae, it is highly likely that further references for guidance will be made.
For further information on this topic please contact Sophie Lens or Virginie Fossoul at ALTIUS by telephone (+32 2 426 1414), fax (+32 2 426 2030) or email (email@example.com or firstname.lastname@example.org).
(1) These are entitled "The bill seeking to modernise the collection of copyright fees, given recent technological developments, while preserving Internet users' right to privacy" and "The bill seeking to promote cultural creativity on the Internet".
(2) Known as the 'HADOPI Law', after the acronym of the Haute Autorité pour la Diffusion des Oeuvres et le Protection des droits sur Internet (the High Authority for the Dissemination of Works and the Protection of Rights on the Internet).
(3) Promusicae v Telefónica de Espana (C-275/06). Promusicae asked the court to order Telefónica to reveal the names and addresses of certain of its customers for internet service provider services whose internet protocol addresses, plus the date and time of their access to a peer-to-peer programme, were already known to Promusicae. According to Promusicae, the users' use of the peer-to-peer software allowed them to share files illegally from the shared-access drive of their computers, infringing rights in songs whose performing rights that had been lodged with Promusicae.
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