A Study in Scarlet as Court imposes blanket ban on blanket filters -- again

Netlog, formerly known as Facebox: now, why would they
want to change a nice, catchy name like that ...?

Today it was once again the turn of the Third Chamber of the Court of Justice of the European Union to deliver a preliminary ruling in what has now become an almost instantly settled and uncontentious issue -- the unsuitability of the imposition of blanket obligations on internet service providers and social networks to filter all communications which pass through them in order to identify and block any such communications which infringe copyright.  The ruling in question is Case C‑360/10 Belgische Vereniging van Auteurs, Componisten en Uitgevers CVBA (SABAM) v Netlog NV, on a reference from the Rechtbank van eerste aanleg te Brussel, Belgium.  The court -- probably experiencing more than a minor twinge of déjà-vu (as explained below) -- didn't even need the benefit of an Advocate General's Opinion before reaching its decision, leaving the lucky AG with a morning off in which to practise his golf, polish his car or whatever else it is that AGs do when no-one wants their Opinion.

Since this is such a straightforward ruling, the IPKat feels confident that the Curia press release needs little elaboration so he reproduces it here:

"The owner of an online social network cannot be obliged to install a general filtering system, covering all its users, in order to prevent the unlawful use of musical and audio-visual work

Such an obligation would not be respecting the prohibition to impose on that provider a general obligation to monitor nor the requirement that a fair balance be struck between the protection of copyright, on the one hand, and the freedom to conduct business, the right to protection of personal data and the freedom to receive or impart information, on the other

SABAM is a Belgian management company which represents authors, composers and publishers of musical works. On that basis, it is responsible for, inter alia, authorising the use by third parties of copyright-protected works of those authors, composers and publishers. SABAM has an objection to Netlog NV, which runs an online social networking platform where every person who registers acquires a personal space known as a ‘profile’ which the user can complete himself in the knowledge that that profile becomes available globally. The most important function of that platform, which is used by tens of millions of individuals on a daily basis, is to build virtual communities enabling those individuals to communicate with each other and thereby develop friendships. On their profile, users can, inter alia, keep a diary, indicate their hobbies and interests, show who their friends are, display personal photos or publish video clips.

According to SABAM, Netlog’s social network also enables all users to make use, by means of their profile, of the musical and audio-visual works in SABAM’s repertoire, making those works available to the public in such a way that other users of that network can have access to them without SABAM’s consent and without Netlog paying it any fee.

... SABAM had Netlog summoned before the President of the Court of First Instance of Brussels (Belgium), requesting inter alia that Netlog be ordered immediately to cease unlawfully making available musical or audio-visual works from SABAM’s repertoire and to pay a penalty of €1000 for each day of delay in complying with that order. In that regard, Netlog submitted that granting SABAM’s injunction would be tantamount to imposing on Netlog a general obligation to monitor, which is prohibited by the E-Commerce Directive [see Article 15 of Directive 2000/31 on certain legal aspects of information society services, in particular electronic commerce, in the Internal Market].

In those circumstances, the Court of First Instance of Brussels made a reference for a preliminary ruling to the Court of Justice. It asks, in essence, whether European Union law precludes a national court from issuing an injunction against a hosting service provider, such as an owner of an online social network, which requires it to install a system for filtering information stored on its servers by its service users, which applies indiscriminately to all of those users, as a preventative measure, exclusively at its expense and for an unlimited period.
According to the Court of Justice, it is not in dispute that Netlog stores information provided by the users of that platform, relating to their profile, on its servers, and that it is thus a hosting service provider within the meaning of EU law.

It is also common ground that implementation of that filtering system would require the hosting service provider to identify, within all of the files stored on its servers by all its service users, the files which are likely to contain works in respect of which holders of intellectual-property rights claim to hold rights. Next, the hosting service provider would have to determine which of those files are being stored and made available to the public unlawfully, and, lastly, it would have to prevent files that it considers to be unlawful from being made available.

Such preventive monitoring would therefore require active observation of the files stored by users with the owner of the social network. Accordingly, the filtering system would require that owner to carry out general monitoring of the information stored on its servers, something which is prohibited by the E-Commerce Directive.

The Court next recalls that, in the context of measures adopted to protect copyright holders, national authorities and courts must strike a fair balance between the protection of copyright and the protection of the fundamental rights of individuals who are affected by such measures [ This is what the Third Chamber said in Case C-70/10 Scarlet Extended, noted briefly here by the IPKat and, at greater length, here by the 1709 Blog.  In today's relatively short ruling, Scarlet Extended was cited no fewer than 15 times in the 27 paragraphs of reasoning. Is this a record, Merpel wonders?].

In the main proceedings, the injunction requiring the installation of a filtering system would involve monitoring all or most of the information stored by the hosting service provider concerned, in the interests of the copyright holders. Moreover, that monitoring would have to have no limitation in time, be directed at all future infringements and be intended to protect not only existing works, but also works that have not yet been created at the time when the system is introduced. Accordingly, such an injunction would result in a serious infringement of Netlog’s freedom to conduct its business since it would require Netlog to install a complicated, costly, permanent computer system at its own expense.

Moreover, the effects of that injunction would not be limited to Netlog, as the filtering system may also infringe the fundamental rights of its service users - namely their right to protection of their personal data and their freedom to receive or impart information - which are rights safeguarded by the Charter of Fundamental Rights of the European Union. First, the injunction would involve the identification, systematic analysis and processing of information connected with the profiles created on the social network, that information being protected personal data because, in principle, it allows those users to be identified. Second, that 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.

Consequently ... in adopting an injunction requiring the hosting service provider to install such a filtering system, the national court would not be respecting the requirement that a fair balance be struck between  the right to intellectual property, on the one hand, and the freedom to conduct business, the right to protection of personal data and the freedom to receive or impart information, on the other".

It remains the contention of this Kat that while, on the face of it, the ruling looks like a setback forcontent owners and the recording industry, it is just part of an evolutionary process in which the courts, by saying what isn't permissible, by implication also say what is.

Suggested things for Advocates General to do when they have a morning off here
This Kat's favourite filters here and here
A Study in Scarlet here