The European Court of Justice (ECJ) has refused to approve the imposition of
an injunction by a national court within the European Union (EU) which would
have required an internet service provider (ISP) to install a filtering system
with a view to preventing the illegal downloading of files.
European Union (EU) law, the ECJ said, prohibits the imposition of a general
monitoring obligation on an ISP, and requires a member state to strike a fair
balance between, on the one hand, intellectual property rights (IPR), and, on
the other, the freedom to conduct business, the right to protection of personal
data and the freedom to receive or impart information.
The case before the ECJ arose from a dispute between Scarlet, a Belgian ISP,
and SABAM, a Belgian management company which is responsible for authorizing
the use by third parties of the musical works of authors, composers and editors.
In 2004, SABAM established that users of Scarlet's services were downloading
works in SABAM’s catalogue from the internet, without authorization and
without paying royalties, by means of peer-to-peer networks.
Upon application by SABAM, the Brussels Court of First Instance ordered Scarlet,
in its capacity as an ISP, to bring those copyright infringements to an end
by making it impossible for its customers to send or receive in any way electronic
files containing a musical work in SABAM's repertoire, or suffer penalties.
Scarlet appealed to the Brussels Court of Appeal, claiming that the injunction
failed to comply with EU law because it imposed on Scarlet a general obligation
to monitor communications on its network, something which was incompatible with
the EU Directive on electronic commerce and with its fundamental rights.
In turn, the Court of Appeal asked the ECJ whether EU law permits member states
to authorize a national court to order an ISP to install, as a preventive measure,
exclusively at its expense and for an unlimited period, a system for filtering
all electronic communications in order to identify illegal file downloads.
In its judgment, the ECJ pointed out, first of all, that IPR holders may apply
for an injunction against intermediaries, such as ISPs, whose services are being
used by a third party to infringe their rights, and that the rules for the operation
of injunctions are a matter for national law.
However, it stressed that those national rules must respect the limitations
arising from EU 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 ISP to carry out general monitoring
of the information that it transmits on its network.
In that regard, the ECJ found that the injunction in question would require
Scarlet to monitor actively all the data relating to each of its customers in
order to prevent any infringement of IPR. It follows that the injunction would
impose general monitoring and would therefore result in a serious infringement of Scarlet's
freedom to conduct its business, as it would require Scarlet to install a complicated,
costly, permanent computer system at its own expense.
It added that, while it is true that the protection of IPR is enshrined in
the EU’s fundamental rights, there is nothing whatsoever to suggest that
that right is inviolable and must for that reason be absolutely protected.
Furthermore, the injunction would involve a systematic analysis of all content
and the collection and identification of users' IP (internet protocol) addresses, which are protected
personal data. In addition, 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.
It was pointed out that, while the ECJ does not decide such a dispute itself,
it is for the national court to dispose of the case in accordance with the ECJ’s
decision, which is similarly binding on other national courts before which a
similar issue is raised.
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