For a small nation with a population of just over 4.5 million
people, Ireland has produced more than its fair share of creative
people: James Joyce, Bram Stoker, Van Morrison, Bono and more. It
is now also the European home of a number of leaders in the
technology industry, including Google, Facebook and Twitter. The
ease with which unauthorised copies of protected works can be
shared via the Internet, particularly following the advent of
person-to-person file sharing, has led to tension between these two
groups. In Ireland, attempts by content creators to force
intermediaries such as Internet service providers (ISPs) to take
active steps to prevent copyright infringement, culminated in a
series of cases between record companies and ISPs.
Shift towards the music industry?
In January 2009, following eight days in the Irish High Court, a
settlement was reached between four major record companies and
Eircom, a principal ISP in Ireland. Eircom agreed to implement a
'three strikes' solution to stop illegal downloading of
copyright works over its network; infringing Eircom customers would
be given two warnings and disconnected on their third
offence.
Subsequently, similar agreements were sought with other ISPs,
including UPC. UPC refused to implement the three strikes policy
and the record companies sought an injunction directing the ISP to
take certain steps to stop customers illegally downloading music
over its network. The record companies complained that their entire
business was being decimated by Internet piracy and that UPC, as an
ISP, was best placed to stop this.
The Irish High Court refused to grant the injunction (EMI Records (Ireland) Limited & Ors v UPC Communications Ireland Limited (2010) IEHC 377). While the court was sympathetic towards the record company's position, stating that ISPs "have an economic and moral obligation to address the problem", it found that the Irish Copyright and Related Rights Act 2000 (CRRA) granted the courts only the power to require ISPs to remove infringing material and not to block, divert or interrupt Internet access.
Bridging the gap
The court indicated that Ireland had failed to comply with its
obligations under European law by not fully transposing the InfoSoc
Directive (Directive 2001/29/EC on the harmonisation of certain
aspects of copyright and related rights in the information
society).
Article 8.3 of this directive places a clear and unambiguous
obligation on member states to ensure that right holders can apply
for an injunction against intermediaries, such as ISPs, whose
services are used to infringe copyright.
While the legislators may have intended that Section 40(4) of the
CRRA (which provides that ISPs may be liable if they fail to remove
infringing material when requested to do so) would make such
injunctions available to right holders, the court felt that this
was not the case. Cutting off the customer's Internet access
would go further than simply removing infringing material which,
the court noted, is simply not possible in the context of transient
communication.
Following a public consultation, the EU (Copyright and Related
Rights) Regulations 2012 were signed into Irish law earlier this
year. The regulations amend the CRRA by permitting copyright owners
to seek to injunct intermediaries and directs the court to have due
regard to the rights of persons likely to be affected by the grant
of such injunctions.
Concerns have been raised regarding the regulations, ranging from
claims that they do not go far enough, to claims that they mirror
the US Stop Online Piracy Act and that they put fundamental rights
at risk. Nevertheless, the Irish Minister for Research and
Innovation has emphasised that the regulations are necessary to
restate the position that was considered to exist prior to the UPC
decision and to ensure compliance with European law.
Restoring balance
While record companies and ISPs battled it out in Ireland, in Belgium, SABAM (a collecting society) sought an order against Netlog (an online social networking platform) which would effectively require Netlog to install a filtering system at its own expense to actively monitor its users' data and prevent them sharing certain electronic copyright files. The Court of Justice of the European Union (CJEU) was asked to decide whether this was compatible with EU law.
The CJEU followed its approach in Scarlet v SABAM (C-70/10, 24 November 2011) and ruled that an intermediary cannot be forced to filter content stored on its servers by users of its social networking platform (C-360/10, 16 February 2012). It reiterated that national authorities and courts must strike a fair balance between IP rights and the fundamental rights of individuals affected by such measures. It held that to grant the order:-
- Would infringe freedom to conduct business: Netlog would have had to install a complicated, costly computer system at its own expense. The CJEU stressed that measures to ensure the respect of IP rights should not be unnecessarily complicated or costly;
- Would infringe 'fundamental rights' of service users: Netlog users' files (including files not even created yet) would be monitored and analysed, which would infringe the users' data protection rights; and
- Could potentially undermine free flow of information: the system might not be able to distinguish between lawful and unlawful content and this could result in lawful communications being blocked.
The CJEU not only balanced IP rights with data protection
rights, as it has done before, but went further and gave weight to
the right of the intermediary to conduct its business and to the
freedom of the service user to use the service. The Irish
government welcomed the decision stating that it "will provide
further clarity to the Irish courts in adjudicating such
matters".
The debate surrounding online copyright infringement is far from
over. While the CJEU has set out broad governing principles in this
area, the specific nature of injunctions which can be sought
against ISPs remains unclear. The recent enactment, in Ireland, of
the hotly debated regulations opens up the possibility of further
ground-breaking litigation in the Irish courts and a further shift
of the scales. Watch this space.
Recent Developments
Since the article above, the CJEU decision in Bonnar Audio &
Others v Perfect Communication Sweden AB (Case C-461/10) was handed
down on 19 April 2012. The applicants in this case were publishing
companies which hold certain exclusive rights to 27 audio books
which they alleged were being unlawfully distributed by means of an
FTP (file transfer protocol) server. The ISP through which this
alleged illegal file sharing took place is ePhone.
The legal issues in this case concern the interactions between the
Data Retention Directive (Directive 2006/24/EC), the IP Enforcement
Directive (Directive 2004/48/EC), the Data Protection Directive
(Directive 95/46/EC), the Directive on Privacy and Electronic
Communications (Directive 2002/58/EC) and national law.
The applicants had taken successive cases in Sweden for the
disclosure of the name and address of the person using an IP
address associated with the distribution of the audio books. The
legal basis for these cases were provisions of Swedish law which
are based on Article 8 of the IP Enforcement Directive which allows
such disclosure orders in certain circumstances. Eventually, the
matter came before the Swedish Supreme Court which referred a
number of questions to the CJEU including whether the Data
Retention Directive prevented an order for disclosure of data of
this nature.
The CJEU held that the Data Retention Directive, which applies only
to specific data and data processors and relates to the
investigation, detection and prosecution of serious crime, does not
preclude the application of national law based on Article 8 of the
IP Enforcement Directive in a case such as this, which related to
alleged civil IP infringements.
The CJEU then went a little further and held that Swedish law in
this case was likely, in principle, to ensure a fair balance
between the protection of intellectual property rights enjoyed by
copyright holders and the protection of personal data enjoyed by
internet subscribers. This is because the Swedish legislation
enables the national court hearing such a disclosure application to
weigh the conflicting interests involved on the basis of the facts
of each case and apply proportionality. Therefore, the Directive on
Privacy and Electronic Communications and the IP Enforcement
Directive do not preclude national legislation of this type.
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