ECJ on Copyright Injunctions: Hosting Providers

After ruling last year on the balance between the rights of copyright holders, users and network providers, the European Court of Justice has now ruled on the same question applied to the case of a hosting provider, the social network Netlog. As in the earlier Scarlett case, the copyright collecting society (SABAM) had asked the Belgian court to order Netlog to actively prevent the infringing use (in this case publication) of copyright materials by its users. Since this appeared to constitute a general duty to monitor content, prohibited by Article 15 of the E-Commerce Directive (2000/31/EC), the Belgian court asked the European Court whether it could lawfully make the order.

In reaching its decision, the Court closely and explicitly followed its approach in Scarlett. It first considered what the order would require Netlog to do, concluding that

[the] 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.

The Court felt this "would result in a serious infringement of Netlog's freedom to conduct its business" by requiring it "to install a complicated, costly, permanent computer system at its own expense". It would also infringe the rights of users "to protection of their personal data and their freedom to receive or impart information" since the system "could lead to the blocking of lawful communications". As in Scarlett, the court concluded that an order involving such interference with the rights of the provider and users

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.

This confirms that key questions in any blocking order are the cost and disruption to the service provider and the level of privacy breach and overblocking for users.