Following the appointment of a court expert the further judgment in SABAM v Tiscali (reported in English translation at 25 Cardozo Arts & Ent. L.J. 1279 (2008)) was handed down on 29 June 2007 by the President of the Brussels Court of First Instance. The defendant is now known as Scarlet Extended S.A..

The court expert submitted a report to the court in January 2007. He identified seven filtering solutions applicable to Scarlet's network, but indicated that only one of them, Audible Magic, sought 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 was not designed to handle the volume of traffic of an ISP; and that significant investment would be required to remedy this under-sizing, which should be compared to the lack of assurance that the efficacy of filtering solutions would endure over the medium term (two to three years), due to the growing use of encryption. There was also evidence that the solution might lead to blocking of some lawful content.

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 were available and directed Scarlet to put them in place within six months and to notify SABAM once this was achieved.

The President rejected the argument of Scarlet that the injunction would breach Article 15 of the E-Commerce Directive, which prohibits Member States from imposing a general obligation on conduits, caches or hosts to monitor the information that they transmit or store (see main text, paragraph 5-052.) The judge held that this only prevented a court from imposing liability on a service provider as a result of the mere presence of unlawful material on its network. It was only concerned with liability and had no relevance to injunctive relief since that did not require any prior finding of fault on the part of the intermediary. The Directive did not limit the measures that the judge could order against the service provider.

The President also rejected an argument that the imposition of filtering technology could result in the loss of mere conduit exemption under Article 12 of the ECommerce Directive. Article 12 of the E-Commerce Directive exempts an Internet access provider from any liability for 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. Scarlet argued that the order would mean that condition (c) was no longer fulfilled. The President held that the order did not imply that Scarlet would select the information that was not blocked, since only "mere technical instruments" would be used to filter and block the infringing content.

The President rejected a further argument that the order would contravene fundamental rights of privacy, confidentiality of correspondence and freedom of expression. Lastly he held that Scarlet should bear the cost of complying with the order, especially bearing in mind the statement in Recital (59) of the Copyright in the Information Society Directive (2001/29/EC) that "In many cases such intermediaries are best placed to bring such infringing activities to an end".

On 23 November 2007 the French government announced the Olivennes Agreement. This was the culmination of a study into Internet piracy commissioned by the government. Under the agreement French ISPs will co-operate over P2P infringement with an authority to be set up by new legislation. ISPs will take action against infringers identified by rightsowners and will experiment with filtering technologies. ISPs will adopt a "3 strikes" policy to subscribers engaging in significant infringement: warning, suspension and termination. The new authority will maintain a database of terminated subscribers in order to prevent them migrating from one ISP to another.

On 3 January 2008 the European Commission adopted a Communication on Creative Content Online in the Single Market (COM(2007) 836 final). This raise a number of policy and regulatory issues for consultation, including: "Do you consider the [Olivennes Agreement] as an example to be followed?" and "Do you consider that applying filtering measures would be an effective way to prevent online copyright infringements?"

In February 2008 the UK government, following up on the Gowers Review of Intellectual Property (December 2006), stated its intent to consult on legislation to require ISPs to co-operate with rights owners in taking action on illegal file sharing, with a view to implementing legislation by April 2009 (UK Creative Industries Consultation, 22 February 2008). The government stated that finding voluntary, preferably commercial solutions, remained the ideal, but the Government would equip itself to introduce legislation swiftly if suitable arrangements between ISPs and relevant sectors were not forthcoming or prove insufficient.

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In February 2008 the Danish Frederiksberg county court ordered Tele2 to block access to the Swedish BitTorrent tracker site The Pirate Bay.

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In Ticketmaster LLC v RMG Technologies Inc (see update paragraph 2-119 below) the use of an automated robot to evade a CAPTCHA mechanism, designed to distinguish between human users and computer programs, was held likely to breach the anti-circumvention provisions of the DMCA. For a description of CAPTCHA technology, see www.captcha.net.

(March 2008)   Back

The reference to the discussion of SABAM v Tiscali should be to paragraph 2-018, not 2-014 as stated in the text. As to the general monitoring obligation and the potential prejudice to the mere conduit protection, see the discussion at para 2-018 of the update text, above, of the further judgment in the case delivered on 27 June 2007 sub nom SABAM v Scarlet.

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Interest in the criminal copyright offences has been revived by the operation conducted by Gloucestershire Trading Standards officers in October 2007, working with the Federation Against Copyright Theft, against the TV Links website. According to the investigators' press release the site was providing links to illegal film content that had been camcorded from within a cinema and then uploaded to the Internet. The site additionally provided links to TV shows that were also said to be illegally distributed. It is reported that a person was arrested during the operation, in connection with "offences relating to the facilitation of copyright infringement on the Internet." It remains unclear what precise offences are being referred to. The most relevant under the 1988 Act would seem to be those under S107 (1) and (2A). Section 107(1) provides:

(1) A person commits an offence who, without the licence of the copyright owner -

(a) makes for sale or hire, or

(b) imports into the United Kingdom otherwise than for his private and domestic use, or

(c) possesses in the course of a business with a view to committing any act infringing the copyright, or

(d) in the course of a business-


(i) sells or lets for hire, or

(ii) offers or exposes for sale or hire, or

(iii) exhibits in public, or

(iv) distributes, or


(e) distributes otherwise than in the course of a business to such an extent as to affect prejudicially the owner of the copyright,

(2A) A person who infringes copyright in a work by communicating the work to the public -

(a) in the course of a business, or

(b) otherwise than in the course of a business to such an extent as to affect prejudicially the owner of the copyright,

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U.E.F.A. and Others v Briscomb and Others [2006] EWHC 1268 (Ch) was a case in which the defendants were unrepresented and did not appear. The claimants successfully applied for summary judgment. Lindsay J held that where the defendants used a computer to capture a TV broadcast and then stream it across the internet to their subscribers, then each part of the broadcast was copied on that computer during the process of digital capture and creation of the digital signal. A further copy was created at the point of receipt of the stream on each user's computer. The judge appears also to have accepted an argument based on the appearance of copies on the user's computer screen, following Bookmakers Afternoon Greyhound Services Ltd & ors v Wilf Gilbert (Staffordshire) Ltd (see main text, footnote 45). At any rate he concluded that the defendants were liable for making or, alternatively, for authorising the making of copies. They were also liable for communicating or authorising the communication of the broadcast to the public .

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In U.E.F.A. and Others v Briscomb and Others (see previous note) the claimants alleged that the defendants were liable for secondary infringement by possessing in the course of business an article (the computer, the memory of which contained a reproduction of the broadcasts), which was and which they knew or had reason to believe was, or contained, an infringing copy of the broadcasts. The judge appears, although it is not wholly clear, to have accepted this claim.

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The US case of Ticketmaster LLC v RMG Technologies Inc (WL 2988403 (C.D. Cal. Oct. 16, 2007) addressed a variation on spidering. The Defendant in this case was alleged to have marketed and sold to its customers an automated robot application. Using this application the defendant's customers could flood the plaintiff's site with hundreds of thousands of applications for tickets as soon as they became available on the plaintiff's website, thus crowding out ordinary consumers. The plaintiff applied for an interim injunction alleging copyright infringement, breach of contractual terms and conditions, computer misuse and breach of anti-circumvention laws.

On the question of copyright infringement, the judge found that the plaintiff was likely to prove that in order to design and test the product, the defendant must have visited the Ticketmaster site and that that would have involved creating a copy of the visited pages in the defendant's computer memory. The plaintiff was also likely to prove that such access was in excess of the licence granted under the site Terms of Use (which prohibited inter alia commercial use and the use of any robot, spider or other automated device, process or means to access the site), that the defendant was on notice of and assented to the Terms of Use, and thus that the access amounted to copyright infringement. The judge also found, following Grokster (main text, paragraph 2-153), that the plaintiff had a strong likelihood of success in claiming that the defendant was indirectly liable for inducing or encouraging copyright infringement by the application's users.

The judge also found that the plaintiff was likely to succeed in its claims for breach of contractual terms and conditions, computer misuse and breach of anti-circumvention laws. He granted an interim injunction.

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The proposed ACAP protocol was formally launched in November 2007 (www.the-acap.org/press_releases/ACAP_News_Release_NOV07.pdf).

(March 2008)   Back

The decision in Perfect 10 v Google was reversed in Google’s favour on appeal to the 9th Circuit (16 May 2007). The appeal court overturned the first instance court’s adverse finding in respect of Google’s use of thumbnail images as fair use, holding that Google would be likely to succeed at trial on that issue.

(September 2007)   Back

In October 2007 the judge in the Streamcast litigation decided on the form of injunction to be granted against Streamcast. After reviewing the available filtering technologies he made an order requiring Streamcast to filter out infringing works. However the duty to filter any particular copyright work would commence only upon the plaintiffs' provision of notice. For each work, the plaintiffs would have to provide the artist-title pair, a certificate of ownership, and some evidence that one of more files containing each work was available on the Morpheus system and software. The plaintiffs would not have to go so far as to provide unique file identifiers (i.e. hash values). Further details of the filtering regime were left to be determined by a special master.

(March 2008)   Back

At the end of January 2008 the Swedish authorities announced their intention to press criminal copyright infringement charges against four individuals associated with The Pirate Bay BitTorrent tracker site.

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A further potentially significant event in relation to user-generated content was the publication in October 2007 of a set of User Generated Content Principles, subscribed to by a variety of content owners and some UGC sites (www.ugcprinciples.com). The most significant aspects of the principles are commitments to (a) the use of proactive pre-upload filtering technology, (b) balancing legitimate interests including fair use, (c) promptly addressing claims that material has been blocked in error and (d) removal of links to sites dedicated to disseminating infringing content.

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There is now a discernible trend away from the use of DRM and other copy protection methods. In May 2007 Apple made high quality, premium price, DRM-free versions of the EMI music catalogue available on its iTunes service. In September 2007 Amazon opened its US music download store, offering DRM-free tracks. In January 2008 Amazon announced that the store would go international later in 2008.

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In Impuls Medienmarketing GMBH’s Application [2007] E.T.M.R. 46, page 717, the German Federal Supreme Court held that the use of trade marks in a hidden keyword or metatag is a use in the manner of a trade mark. In this case the use amounted to trade mark infringement.

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3 – 105

The litigation between Google and American Blind is reported to have been settled in August 2007 on terms favourable to Google, under which Google will continue with its existing trade mark policy.

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5 – 044

For examples of cases around Europe addressing the knowledge standard for a hosting provider under Article 14, see update text for paragraph 5-048 below.

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5 – 048

In an increasing number of cases around Europe courts have begun to address the question of whether online platforms do or do not qualify as hosts under Article 14 of the ECommerce Directive. The results, both as to the activities regarded as amounting to hosting and the degree of knowledge required to disqualify the host from protection, do not present a consistent picture. The cases include, in France: Lucky Comics, (June 2006, Paris Court of Appeal) - Tiscali held to be a publisher, not a host, of a website that offered clients the ability to create personal web pages and provided paid advertising space - by doing so it went beyond technical hosting activity; MySpace (June 2007, summary judgment of the President of the Paris Tribunal de Grande Instance) - MySpace a publisher, not a host, since it imposed a presentation structure with frames and displayed advertising on each visit to the webpage, from which it profited; DailyMotion (July 2007, TGI Paris) – DailyMotion, a site permitting the uploading of user videos, was a host, not a publisher – the users, not DailyMotion, caused the publication of the films and the provision of advertising was insufficient to disqualify DailyMotion from hosting status (but was disqualified on grounds of knowledge of facts and circumstances suggesting that infringing videos were placed online); Case 2004-496 DC (June 2004, French Constitutional Council) – a host cannot be expected to judge the merely illicit, but can be expected to judge the ‘obviously illicit’; CDCA/Aydin (November 2004, TGI Paris, confirmed on appeal) – texts on the Turkish Consulate website denying Armenian genocide, which had been notified to the hosting provider, were not obviously illicit since they were not in the statutory list of crimes whose denial was punishable; in Germany: Steffi Graf/Microsoft (May 2002, Cologne Court of Appeals) – an MSN discussion forum was not entitled to protection under the then German Teleservices Act (which had similarities to the ECommerce Directive) since it had adopted the user’s content as its own by providing the overall organisational structure of the board and embedding it into related content; Rolex I (March 2004, Federal Supreme Court) – Ricardo online auction site held to be a host; Rolex II (April 2007, Federal Supreme Court) implicitly followed Rolex I in a case concerning eBay; in Belgium: Case of 3 February 2004 (Cour de Cassation) – proprietor of website on which users posted links to child pornography found to have had control over users and for that reason (as well as being found to have had knowledge) disqualified from hosting status; Italy: VK v XL (2005, Court of Catania) – hosting provider may be liable, without the need for receipt of a specific notice, if it does not remove content that it is aware is evidently illegal; in Spain: Case of 20 December 2005 (Madrid Provincial Court) – host did not have effective knowledge of the illegality of defamatory material in the absence of a prior judicial decision; and in the UK, see the extract from Bunt v Tilley at paragraph 5-044 of the main text. For a US case in which for the purposes of the Communications Decency Act an online roommate matching service was held to be a publisher rather than an interactive computer service provider, in respect of the answers to a ‘tick-box’ online questionnaire, see Fair Housing Council v Roommates.com (15 May 2007, USCA 9th Circuit). The service did qualify for CDA protection in respect of user entries in a free-form ‘Additional Comments’ box.

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5 – 035

Further examples of statutory instruments implementing versions of the conduit, caching and hosting exemptions are the Electronic Commerce Directive (Terrorism Act 2006) Regulations 2007 (SI 2007/1550) and the Electronic Commerce Directive (Racial and Religious Hatred Act 2006) Regulations 2007 (SI 2007/2497).

(September 2007)   Back

6 – 020

The Rome II Regulation (Regulation (EC) No 864/2007 of the European Parliament and of the Council of 11 July 2007 on the law applicable to non-contractual obligations (Rome II)) was adopted, in accordance with the compromise text, on 11 July 2007. It comes into force on 11 January 2009.

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6 – 029

In respect of numbered point 3 it is perhaps more accurate to say that the effect of Shevill is that a claim brought under Article 5(3) on the basis of the place where the damage occurred is limited to the damage suffered within the jurisdiction. A claim under Article 5(3) based on the place of the event giving rise to the damage is not so limited (Sandisk Corporation v Koninklijke Philips Electronics and others [2007] EWHC 332 (Ch)).

(September 2007)   Back

6 – 035

The Rome II Regulation has now been adopted. See update text for paragraph 6-020 above.

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6 – 055

In addition to the US cases cited in footnote 27, see Goldhaber v Kohlenberg (2 August 2007, New Jersey Appellate Division).

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6 – 056

The Rome II Regulation has now been adopted. See update text for paragraph 6-020 above.

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6 – 070

The Rome II Regulation has now been adopted. See update text for paragraph 6-020 above.

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6 – 072

For a survey of decisions of national courts in various Member States on Article 15 of the Judgments Regulation see Study JLS/C4/2005/03 ‘Report on the Application of Regulation Brussels I in the Member States’, by the University of Heidelberg, published on 1 October 2007, at pages 145 to 147.

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6 – 100

On 15 October 2007 ICSTIS changed its name to PhonePayPlus.

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6 – 178

In a second case brought by Rolex – this time against online-auctioneer eBay – the Federal Court of Justice in April 2007 confirmed the principles it had established with its first Rolex judgement (BGH, April 19, 2007, court file no. I ZR 35/04, Rolex II). Again, the court provided only rather vague guidance as to what type of measures a host provider may need to take once he comes under a "surveillance duty", thus still leaving substantial room for interpretation and uncertainty. Slightly more specifically than before, the court indicated that it would reach or exceed the "borders of reasonableness" if no defined criteria existed that could be used in a "search system" ("Suchsystem") to detect the respective content. As regards concrete measures, the court mentioned the use of text-based filtering software, but did not comment on other search systems like picture based systems or systems that would take even broader circumstances into account (such as, in case of online auctions, information regarding the starting time of the auction, its duration, the category the respective auction is listed in and the country of origin of the seller - information which can allow to draw certain conclusions). The court emphasised, however, that any such surveillance duties should not overburden the respective host provider or endanger his business model."

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12 – 008

On 15 October 2007 ICSTIS changed its name to PhonePayPlus.

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12 – 110

On 15 October 2007 ICSTIS changed its name to PhonePayPlus.

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12 – 127

Part III of the Regulation of Investigatory Powers Act was brought into force on 1 October 2007. The related Code of Practice on Investigation of Protected Electronic Information, laid before each House of Parliament in draft on 7th June 2007, came into force on 1 October 2007 by virtue of the Regulation of Investigatory Powers (Investigation of Protected Electronic Information: Code of Practice) Order 2007 (SI 2007 No. 2200).

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12 – 128

The Code of Practice on Acquisition and Disclosure of Communications Data, laid before each House of Parliament in draft on 7th June 2007, came into force on 1 October 2007 by virtue of the Regulation of Investigatory Powers (Acquisition and Disclosure of Communications Data: Code of Practice) Order 2007 (SI 2007 No. 2197).

(October 2007)   Back

The Commission’s approach to individualised retroactive rebates in Michelin I has also been followed in the more recent British Airways case. Both the CFI and the ECJ upheld the Commission’s decision that BA abused its dominant position on the UK market for air travel agency services by applying bonus schemes which rewarded loyalty from travel agents[1]. The CFI had held that the rebates applied by BA had a fidelity building effect capable of producing an exclusionary effect. This was due to the progressive nature of the increased commission rates which were based on an increase on sales achieved in the reference period. This had a noticeable effect at the margin of the rebate threshold such that a small reduction in sales of BA tickets could have radical effects on the rates of the performance related bonus received by the travel agents. The ECJ upheld the ruling and set out the two-stage test derived from the case-law; first whether there was an exclusionary effect as a result of the rebate and second whether any such effect was counter-balanced by efficiencies which also benefited consumers. 
[1] Case T-219/99 British Airways v Commission, 17 December 2003; Case C-95/04 British Airways v Commission, 15 March 2007

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14 – 261 (insert as penultimate paragraph)

The CFI dismissed Wanadoo’s appeal and confirmed the Commission’s decision in its entirety[2]. The Court confirmed that the Commission had chosen the correct method of calculating the rate of recovery of costs to allow it to conclude that Wanadoo’s pricing was predatory. It found that the Commission had found solid and consistent evidence as to the existence of a plan of predation and it was not necessary for the Commission to establish additional proof that Wanadoo had a realistic chance of recouping its losses. In addition the Court pointed out that the fast-growing nature of the market for high-speed internet access during the period at issue could not preclude application of the competition rules.
[2] Case T-340/03 France Telecom SA v Commission, 30 January 2007

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14 – 286 (insert as last paragraph)

However, the Court of Appeal overturned the High Court decision that the British Horseracing Board (BHB) had abused its dominant position in the supply of pre-race data in relation to horseracing to Attheraces Ltd (ATR) even though the High Court had found BHB’s profit margin to be nearly 300%[3]. In calculating the economic value of the product, the Court of Appeal held that exceeding a cost plus criterion is a necessary but not sufficient test of abuse of a dominant position. It is also necessary to consider all the relevant circumstances. In this case the Court of Appeal considered that the benefit derived by overseas bookmakers from BHB’s data had a bearing on whether or not the price was excessive. The Court of Appeal found that there was little evidence that competition in the downstream market was being distorted by the demands made by BHB on ATR. Equally there was no evidence that ATR’s competitiveness was at a risk of being materially compromised by the terms specified by BHB nor was this a case of an upstream provider seeking to reserve a downstream market to itself so as to exclude its downstream customers from competing on it. Therefore the Court of Appeal found that the High Court had applied too narrow a view by holding that the economic value of the pre-race data was limited to the cost of compilation plus a reasonable return.
[3] Court of Appeal judgment of 2 February 2007, Attheraces v the British Horseracing Board

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14 – 292 (Delete last sentence of existing text and replace with para below)

However, the Court of Appeal found that BHB had not abused its dominant position by refusing to continue the supply of pre-race data to ATR except on unreasonable and anti-competitive terms. The Court of Appeal held that the price offered was not unreasonable or excessive (see para 14-286) and the High Court had been wrong to find that it was an abuse for BHB to insist on an intellectual property licence for the data supplied.

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