ECJ ruling encourages copyright holders to shoot the messenger

In their decision issued last week in the case of UPC Telekabel v Constantin Film, the European Court of Justice (ECJ) confirmed that EU states have the right to issue injunctions requiring internet service providers (ISPs) to block their internet users’ access to copyright-infringing websites.

Whilst at first glance the decision may appear to be a landslide victory for rights owners, the decision also offers welcomed clarity to ISPs on the extent of their obligations to prevent infringements.

The ECJ’s decision arose out of an Austrian case involving an application by two film producers, for an injunction requiring an Austrian ISP to prevent its users accessing a website that enabled its users to stream or download films which infringed the producers’ copyright.

According to Article 8(3) of the Copyright in the Information Society Directive (2001/29) (Directive), national courts have the power to grant a blocking injunction against an ‘intermediary’ whose services are used by a third party, to infringe copyright or related rights. The ECJ’s decision addresses two key issues; firstly, what sort of intermediaries can be subject to injunctions under the Directive, and secondly, what form of injunctions can be granted against them?

Can an injunction be granted against an ISP as an intermediary?

The primary issue to be determined by the court was whether a party making infringing information available on their website ‘uses’ the services of the ISP whose customers access the website to do so, where the ISP’s customers themselves have not committed an infringement, thus providing a jurisdictional platform for courts to grant injunctions against such an ISP.

UPC argued that they had no contractual business relationship with the website operators, having neither made internet access or storage space available to them. Since it could not be established that their direct customers acted unlawfully (although, as the Advocate General Cruz Villalon pointed out in his preceding opinion delivered back in November, it could be assumed with near certainty that they took advantage of the services on offer on the offending website), they maintained that it could not be considered that their services had been used to infringe a copyright or related rights. UPC also emphasised that, in any event, the various blocking measures available were excessively costly, especially as for the most part they could be easily circumvented with minimal technical expertise.

Contrary to the assertions of UPC, the ECJ found that where an ISP’s service users access infringing content on a website, that ISP is in fact an intermediary whose services are used to infringe copyright within the scope of the Directive, and as a result they can be subject to injunctions forcing them to block access to the offending sites. They cited the rationale that the ISP “is an inevitable actor in any transmission of an infringement over the internet between one of its customers and a third party, since in granting access to the network it makes the transmission possible.”

In their decision, the ECJ recognised that, on a practical level, as the services of intermediaries are increasingly used to infringe copyrights, such intermediaries are often ideally placed to take preventative action. The ECJ emphasised that in order to fulfil the key objective of the Directive, which is to guarantee right holders a high level of protection as outlined at Recital 9 of the Directive, ISPs must be included within the parameters of Article 8(3), because to rule otherwise would substantially diminish the protection afforded to such right holders.

This means that in future it will not be necessary to show a specific relationship between a person infringing copyright and the intermediary against whom an injunction may be issued, nor will it be necessary to prove that the customers of the ISP in question actually access the protected subject matter on the known infringing website, as the ECJ reiterated that that spirit of the Directive required Member States to not only take action to bring existing infringements to an end, but also to prevent further infringements, or at least make them more difficult to commit.

Can an injunction be granted without specifying the means of implementing it?

Having decided that an injunction could be granted against an ISP in the circumstances outlined, the ECJ then proceeded to consider the nature of the injunction to be granted, and in particular whether the Austrian court’s approach in leaving the ISP to decide the means to be used in blocking the website was acceptable, or whether the court should be required to specify any prescribed block should be implemented.

In reaching their decision, the ECJ recognised the tension between the ISP’s freedom to conduct a business, the internet users’ freedom of information, and the right holders’ copyright, and emphasised the need to achieve a “fair balance” between these fundamental rights. In assessing whether such a balance had been struck, the ECJ found that by giving the ISP a wide discretion to determine the appropriate measures to implement a block of the website, the Austrian Court’s ‘results’ form of injunction had in fact ensured the optimum business freedom of the ISP, as they could choose to put in place measures best adapted to their available resources and the challenges of carrying on their particular business activities. Furthermore, provided the ISP had taken all measures “capable of being considered reasonable”, they could rest assured that they would not be held liable for breach of the injunction, thus ensuring that an ISP cannot be expected to make unbearable sacrifices in order to protect the conflicting interests of a rights-holder.

In this regard the ECJ judgment differed from the opinion of the Advocate General, where he expressed the view that it would be “incompatible with the weighing of the fundamental rights of the parties to prohibit an ISP generally [from accessing an infringing website] and without ordering specific measures”.

The Advocate General did, however, acknowledge that a specific blocking measure imposed on an ISP relating to a specific website would not automatically be disproportionate simply because it entailed not inconsiderable costs and could be easily circumvented without any special technical knowledge.

The ECJ imposed two conditions on the granting of a general injunction such as that proposed by the Austrian court in order to ensure a fair balance is struck between the fundamental rights of the parties:

(i)            Firstly, measures must not unnecessarily deprive users of the possibility of lawfully accessing the information available, so in other words measures must be strictly targeted to ensure that internet users’ right to freedom of information is not be curtailed more than is necessary; and

(ii)           Secondly, those measures must have the effect of preventing unauthorised access to the protected subject-matter or, at least, of making it difficult to achieve and of seriously discouraging users accessing the infringing subject-matter. This means that courts will not decline to grant an injunction just because there is no fool-proof solution available. As the English High Court has acknowledged “a blocking order may be justified even if it only prevents access by a minority of users”.

The ECJ declined to elaborate further on how best to balance and protect the competing rights of parties in such a case, leaving the ultimate decision as to “fair balance” in the domain of national courts.

In order to ensure that the fundamental rights of internet users are afforded adequate protection, and are not diminished in the wake of an insurgence of applications for injunctions by rights-holders, the ECJ also introduced the concept that internet users can assert their rights before national courts, ensuring that they have a forum for redress where they believe measures imposed by an ISP are unduly restrictive.

The battle is won, but the war has just begun…

Whilst the International Federation of the Phonographic Industry (IFPI) has issued a positive statement in support of the ECJ ruling, which undoubtedly represents a string to their bow in fighting online piracy, the decision is unlikely to have a notable impact on the approach of the UK courts to website blocking. The High Court had already been persuaded to grant specific injunctions against a number of ISPs under domestic intellectual property legislation before the recent judgment came to light, and is likely to continue to grant such orders without hesitation in the future, particularly with the reinforcement of an ECJ decision behind them. Other EU member states are now likely to follow suit, adopting an approach more consistent with that already prescribed by English law.

Whilst those campaigning for better protection of intellectual property rights are celebrating their apparent victory, they may stop to consider that whilst in principle the ECJ ruling is a step in the right direction, in practice the operators of illegal websites, and the ISPs making them available online, are often based outside of Europe or conceal their identity, which means that in reality it is very difficult to pursue them before the courts. Let the historic examples of the difficulty encountered in shutting down notorious copyright-infringing sites such as Pirate Bay serve as a cautionary warning not to celebrate too soon – the road ahead for rights-holder’s crusading against piracy in the internet age is a treacherous one; and for every website you successfully shut down you can all but guarantee the same will resurface under a different address or hosting provider!