Injunctions against ISPs - The SABAM/Scarlet ruling

23 October 2007

Laurent Masson

The President of the Brussels Court of First Instance (the ‘President’) ruled on 29 June 2007 that an Internet Service Provider (ISP) active in the Belgian market, must implement technical measures to prevent illegal peer-to-peer music file exchanges.

The case began on 24 June 2004, when the largest Belgian collective rights society (‘Sabam’) initiated summary proceedings against S.A. Tiscali, now Scarlet Extended (‘Scarlet’), an internet access provider with a market share in Belgium of less than 4%. Sabam requested the President to impose a cease and desist order against Scarlet in order to stop its subscribers from copying and making available to the public, through various peer-to-peer sharing software tools, electronic files containing copyright protected music.

The claim had been filed on the basis of section 87, §1 of the Belgian Copyright Act of 30 June 1994, - a general provision allowing the President to order the cessation of any infringement of copyright or neighbouring right. At that time, Belgium had not yet implemented the EU Directive 2001/29 on the harmonisation of certain aspects of copyrights and related rights in the information society (the ‘Copyright Directive’). Article 8.3 of the Copyright Directive imposed an obligation on the Member State to “ensure that right holders are in a position to apply for an injunction against intermediaries whose services are used by a third party to infringe copyright (…)”. However, despite the non-implementation of the Copyright Directive, it was commonly admitted that the President has jurisdiction to decide on such claims, in accordance with established EU and national case law directing the interpretation of national law provisions (in this case the above mentioned article 87, §1 of the Copyright Act) in conformity with EU Directives.

In an interlocutory judgment of 26 November 2004, the President held that Sabam’s rights were being infringed. However, he did not impose a general cease and desist order because it was not certain that such an order could produce a practical result or that technical measures were possible to prevent copyright infringements. Therefore, before rendering a final decision, the President appointed a judicial expert to investigate the feasibility of technical measures and their related costs to block or filter illegal file exchanges.

In the report that he submitted to the President in January 2007, the appointed expert first stated that the technical validity and efficiency over a medium term could not be guaranteed for any filtering solution. He identified seven filtering solutions applicable to Scarlet’s network, but indicated that only one of them, called Audible Magic, seeks to identify specific content on peer-to-peer networks rather than mere identification of peer-to-peer applications. The expert stressed, however, that the Audible Magic solution as such is not sized to be used as a filter by an ISP and that significant investment would be required in order to remedy this under-sizing. Finally, the expert pointed out that the Audible Magic solution is not waterproof as it does not block all protected contents and it also blocks some unprotected content.

However, the President rejected the conclusion of the expert on the under–sizing issue, based on reasons including press articles stating that the Audible Magic solution had been or was to be adopted by MySpace and Microsoft. The President concluded that satisfactory technical filtering measures are available and it directed Scarlet to put them in place within six months and to notify Sabam once this was achieved.

The decision is particularly interesting as it is believed to be the first decision to force an ISP to block a broad class of copyright infringing materials. The decision may however be criticised on several aspects, which might justify an appeal filed against it.

1/ First of all, it might be questioned whether the decision is still in line with the equilibrium organised at EU level between the liability regime of the ISPs (under the 2000/31 E-commerce Directive) and the protection of copyright in the information society (under the 2001/29 Directive).

In particular, article 15 of the E-commerce Directive prohibits ISPs being put under a general obligation to monitor the content of the communication that it transmits or to actively search for facts or circumstances indicating illegal activity.

This principle has been confirmed by Article 21 of the Belgian law on e-commerce, which also states that this does not prevent the competent judicial authorities to impose “temporary monitoring injunctions in specific cases”. However, the measures imposed by the decision seem to be both permanent and general, as it is related to a significant amount of peer-to-peer traffic.

2/ The decision might also have other important consequences for ISP’s should it be confirmed in appeal.

Article 12 of the E-Commerce Directive exempts an Internet access provider from any liability regarding the information transmitted via its network, on condition that the provider: (a) does not initiate the transmission, (b) does not select the receiver of the transmission, and (c) does not select or modify the information contained in the transmission.

However, if the internet access provider has to actively roll out a filtering technology with regard to (part of) the data transmitted on its network, it could be argued that the third condition of the exemption will no longer be fulfilled.

In this respect, the President held that the order does not imply that Scarlet select the information contained in the transmission as only “mere technical instruments” are used to filter and block the infringing content.

Should the liability exemption be lifted, this would imply that the internet access provider is liable for the malfunctioning of the filtering technology on its network, causing, for instance, illegal content to not be intercepted. In other words, the ISP characterization as “mere conduits” would be jeopardised.

The President admitted that the Audible Magic solution might lead to the blocking of some legal communications. Indeed, it seems impossible that a technology could make a waterproof distinction on the basis of the legal/illegal nature of the communication, as this depends both on the authorisation or concrete licence terms granted by the author or the collecting society, and on the possible interference of statutory exceptions to copyright.

3/ It might also be questioned whether the ISP, which did not obviously itself infringe copyright, has to bear the whole cost of the measures enjoined by the Decision, particularly in this case where the cost seems significant.

Again, the President apparently did not follow the expert on this point as he calculated the cost of the technical measure for Scarlet on a duration of three years while the expert stated that the technical validity of the solution cannot be guaranteed at a 2-3 years term.

4/ Finally, the Decision appears particularly over-reaching given that in the ruling of 2004, the President did not properly find but rather presumed, that the alleged infringements of the copyright protected music works via the network of Scarlet were actually committed.

Indeed, the President only referred to the exposure of the phenomenon of the illegal file exchanges in various media as well as to an earlier advertisement agreement signed between Scarlet and the owners of the Kazaa software. According to the President, these elements sufficiently allowed one to presume that the copyright infringements also took place on the Scarlet network.

Whilst Scarlet had already announced its intention to file an appeal against the judgments rendered by the President, Sabam contacted all ISPs active in Belgium and, invoking the same ruling, enjoined them to implement technical measures to prevent illegal peer-to-peer music file exchanges.

As the whole sector is concerned by this ruling, it would not be surprising if the Belgian internet service providers association, or some other internet access providers, were voluntarily to join the proceedings in an appeal to support Scarlet.

In any case, this debate will most probably not come to an end soon.