The Court of Justice of the European Union has today ruled that a measure ordering an internet service provider to operate a general system for filtering and blocking electronic communications is inconsistent with EU law.
 
The Court's decision, (dated Thursday 24 November) is the long-awaited ruling on the reference in the well-known SCARLET EXTENDED (BELGACOM GROUP) v SABAM case.

According to the Court, an injunction imposed on a Belgian ISP requiring it to install a general filtering system amounts to a general monitoring obligation, which is prohibited by Article 15(1) of the E-Commerce Directive.

The Court stated that such an injunction does not strike a fair balance between the protection of intellectual property rights and the protection of the fundamental rights of individuals who are affected by such measures. The Court also noted that such an injunction would result in a serious infringement of the freedom of the ISP to conduct its business and would infringe the fundamental rights of the ISP's customers, namely their freedom to receive or impart information and their right to protection of their personal data.

On the latter point, the Court has finally seized the opportunity to rule that users' IP addresses are protected personal data.

Bird & Bird were instructed as lead counsel for the Belgian ISP Scarlet.

Background

Brussels Court of First Instance Decisions - 26 November 2004 and 29 June 2007

In 2004, Sabam (the Belgian Society of Authors, Composers and Publishers) requested an injunction against a Belgian ISP, Scarlet, to prevent its customers from committing copyright infringement using peer-to-peer software.  The injunction required the provider to adopt proactive measures to prevent the unauthorized exchange of protected material. In practice, this implied the implementation of a general filtering and blocking solution on its network.

This request was based on Article 87 of the Belgian Copyright Act - which implements into Belgian law EU directive 2001/29  - according to which Belgian courts may, to put an end to copyright infringements, order injunctions against intermediaries whose services are used by third parties to perpetrate such infringements.

The Brussels Court of First Instance ordered Scarlet to prevent, in its entirety, the unauthorised exchange of copyrighted files through peer-to-peer software on its network.

Brussels Court of Appeal Decision - 28 January 2010

The Court of Appeal decided, before examining the technical feasibility of filtering measures, to seek a preliminary ruling from the Court of Justice of the European Union regarding whether a requirement on an Internet Service Provider to implement traffic-filtering mechanisms is consistent with EU legislation (and more precisely with its IP, e-commerce, data protection and e-privacy regulations) as well as with the fundamental rights of privacy and freedom of expression.
The wording of the question referred was:

1. Do Directives 2001/29 ( copyright in the information society) and 2004/48 (enforcement of intellectual property rights), in conjunction with Directives 95/46 (Data protection),  2000/31 (e-commerce)  and 2002/58 (e-Privacy), 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 stating 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 the question in paragraph 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?

'We are pleased that the CJEU has seized the occasion to clearly assess at the European level the necessary balance between the protection of intellectual property rights and other fundamental rights and has not delegated this mission to the national judge, enhancing thereby legal certainty throughout the EU.'  Benoit Van Asbroeck, Bird & Bird

Benoit Van Asbroeck, Maud Cock and Laurent Masson of Bird & Bird Brussels have been acting for the Belgian Internet Service Provider Scarlet from the appeal stage onwards.  The pleadings before the Court of Justice of the European Union were conducted by Benoit.

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