The European Court of Justice has produced a very interesting ruling with regards to injunctions ordering intermediaries to block websites which make available infringing content. This has been a hot legal topic in recent years due to the strategy used by various content owners when attempting to tackle copyright infringement; court orders have been implemented in several jurisdictions compelling ISPs to block access to torrent tracker websites, such as The Pirate Bay. While the effectiveness of such measures is disputed; I say disputed in the sense that only the content industries think that they work, while the rest of us laugh quietly while searching for proxies.
The CJEU has had to analyse blocking orders in the case of UPC Telekabel v Constantin Film & Wega Filmproduktionsgesellschaft (C‑314/12). The case concerns two film production companies that found content they owned being made available for download and streaming in unnamed websites without their authorisation, and therefore they requested Austrian ISP Telekabel to block access to those locations for their customers. In 2011, a court in Vienna issued an order for the ISP to block the offending site’s domain name and current IP address. Telekabel appealed the order on the grounds that the court had wrongly given instructions on how to conduct the blocking. Allowing some of the complaints, the regional High Court of Vienna partially reversed the order by stating that the film companies had the power to obtain an injunction blocking access to a website, but that it would be up to the ISP to determine how the blocking should be undertaken. Telekabel appealed again on a point of law arguing that it could not be considered to be infringing copyright itself as it is in no commercial relationship with the offending websites, and that it was not established that its customers had acted unlawfully. Furthermore, the intermediary argued that blocking orders are easily circumvented, and that their implementation can be very costly. The court of appeals referred two main questions (subdivided in 4) to the CJEU:
“1. Is Article 8(3) of Directive 2001/29 … to be interpreted as meaning that a person who makes protected subject-matter available on the internet without the rightholder’s consent [for the purpose of Article 3(2) of Directive 2001/29] is using the services of the [internet] access providers of persons seeking access to that protected subject-matter?
If the answer to the first question is in the negative:
2. Are reproduction for private use [within the meaning of Article 5(2)(b) of Directive 2001/29] and transient and incidental reproduction [within the meaning of Article 5(1) of Directive 2001/29] permissible only if the original of the reproduction was lawfully reproduced, distributed or made available to the public?
In other words, the court wanted to make sure that the intermediary in question in Art 8(3) is the service that is being used by users to access infringing content, and not the service provider of the entity making that content available to the public. This is a very interesting legal distinction that had not been explored fully before (at least to my knowledge). The importance of this question is that Art 8(3) of the Copyright Directive could be interpreted as allowing owners to ask for an injunction only against the intermediary that provides access to the site, and not the intermediary that Internet users would employ to access the unauthorised materials. Imagine that I run an infringing site back in Costa Rica, and that I use a Costa Rican ISP to access the Internet. Users from European intermediaries (such as BT and Virgin) would be using their ISP to access my content. Content providers could not sue my provider to get an injunction because it’s in a non-EU jurisdiction, so the court wanted to know if it would be possible to obtain the injunction from the user’s ISP.
Article 8(3) of the Copyright Directive 2001/29 reads:
“Member States shall ensure that rightholders are in a position to apply for an injunction against intermediaries whose services are used by a third party to infringe a copyright or related right.”
The CJEU decided to side with the film companies in its interpretation of the law, and it sates in para 32:
“Accordingly, given that the internet service provider 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 that transmission possible […], it must be held that an internet service provider, such as that at issue in the main proceedings, which allows its customers to access protected subject-matter made available to the public on the internet by a third party is an intermediary whose services are used to infringe a copyright or related right within the meaning of Article 8(3) of Directive 2001/29.”
In the next set of questions, the referring court wanted to ask whether there should be a balance to the fundamental rights of the user and the rights of the owner. The Austrian court asked:
“If the answer to the first question or the second question is in the affirmative and an injunction is therefore to be issued against the user’s [internet] access provider in accordance with Article 8(3) of [Directive 2001/29]:
3. Is it compatible with Union law, in particular with the necessary balance between the parties’ fundamental rights, to prohibit in general terms an [internet] access provider from allowing its customers access to a certain website (thus without ordering specific measures) as long as the material available on that website is provided exclusively or predominantly without the rightholder’s consent, if the access provider can avoid incurring coercive penalties for breach of the prohibition by showing that it had nevertheless taken all reasonable measures?
If the answer to the third question is in the negative:
4. Is it compatible with Union law, in particular with the necessary balance between the parties’ fundamental rights, to require an [internet] access provider to take specific measures to make it more difficult for its customers to access a website containing material that is made available unlawfully if those measures require not inconsiderable costs and can easily be circumvented without any special technical knowledge?’
The court referred to previous decisions that had rested heavily on reaching a balance between the rights of users and businesses, and the rights of copyright holders, such as Sabam and Promusicae. The court argues:
“The Court has already ruled that, where several fundamental rights are at issue, the Member States must, when transposing a directive, ensure that they rely on an interpretation of the directive which allows a fair balance to be struck between the applicable fundamental rights protected by the European Union legal order. Then, when implementing the measures transposing that directive, the authorities and courts of the Member States must not only interpret their national law in a manner consistent with that directive but also ensure that they do not rely on an interpretation of it which would be in conflict with those fundamental rights or with the other general principles of EU law, such as the principle of proportionality […]
The freedom to conduct a business includes, inter alia, the right for any business to be able to freely use, within the limits of its liability for its own acts, the economic, technical and financial resources available to it. […] An injunction such as that at issue in the main proceedings constrains its addressee in a manner which restricts the free use of the resources at his disposal because it obliges him to take measures which may represent a significant cost for him, have a considerable impact on the organisation of his activities or require difficult and complex technical solutions. […] However, such an injunction does not seem to infringe the very substance of the freedom of an internet service provider such as that at issue in the main proceedings to conduct a business.”
The court does recognise that blocking orders might be eventually futile, going as far as to admit that “the measures taken when implementing an injunction such as that at issue in the main proceedings are not capable of leading, in some circumstances, to a complete cessation of the infringements of the intellectual property right”, so they are not an excessive imposition against the intermediary, and that they may have the result to make it a bit more difficult to infringe copyright. The court however does impose a caveat on blocking orders, as it comments that injunctions designed to block access must follow these two requirements:
(i) the measures taken do not unnecessarily deprive internet users of the possibility of lawfully accessing the information available and (ii) that those measures 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 internet users who are using the services of the addressee of that injunction from accessing the subject-matter that has been made available to them in breach of the intellectual property right, that being a matter for the national authorities and courts to establish.”
I have to admit that while I dislike greatly blocking orders, and I maintain that they are a complete waste of time and money, the decision reached by the CJEU in Telekabel is logical, and that it still leaves intact the balancing act that was reached in Sabam and Promusicae. It is particularly encouraging that the court restated that users must not suffer unduly, and that they should not have access to legitimate content curtailed.
Incidentally, it is quite telling that the CJEU admits as part of the facts of the case the seemingly innocent fact that the website subject to the initial order stopped its operation in 2011, which serves to stress the practical futility of blocking injunctions. The copyright industry may continue winning pyrrhic battles, but the war has been lost. The solution is not an injunction, it is a revamp of business models.