Belgian collecting society SABAM may not levy royalties on ISPs On 13 March 2015 the Brussels Court of First Instance issued a judgment in the cease-and-desist case the Belgian state brought against the collecting society SABAM, which was suing Internet service providers (ISPs). According to SABAM, the ISPs themselves—besides the Internet users—“communicate” works to the public, and such communication would require authors’ consent under copyright law and, therefore, payment of specific royalties.

However, the supervising authority of collecting societies within the Ministry of Economy did not agree with SABAM’s argument, and, through a specific administrative procedure, it had SABAM summoned so that its claim against the ISPs would stop. Since SABAM did not accede to this demand, the Ministry of Economy sought eventually the Court to order a cease-and-desist injunction. The main Belgian ISPs joined the proceedings in support of that request.

After a detailed examination of all the ISP’s activities, the Court recalled the applicable legal provisions, including Directive 2001/29/EC of 22 May 2001 on the harmonization of certain aspects of copyright in the information society, the case-law of the European Court of Justice (ECJ), and more particularly the recent Svensson (C-466/12) andBestwater International cases (C-348/13). Then, the Court formulated two hypotheses: either the ISP’s activities are a mere provision of physical facilities for enabling or making a communication (and in this scenario, it does not in itself amount to a communication, pursuant, notably, to Recital 27 of the Directive 2001/29/EC), or they do more than that.

In the latter scenario, even if one were to consider that the ISPs make any additional communication to the “initial” communication of their customers or the content suppliers, this would not satisfy the public requirement: either there is no large indefinite number of persons when looking at the communication originated from the Internet user/content supplier to its ISP, or there is no “new public” when the ISP makes the content available to its customers because this is precisely the intended purpose of the initial communication of the Internet user/content supplier.

As a result thereof, there is no valid ground for claiming royalties on such activities. When doing so, SABAM does violate Belgian copyright law, and therefore, the Belgian state is right to have intervened.

Finally, it is worth mentioning that the Court found that there was no need to refer to the ECJ for a preliminary ruling because the existing case-law provided sufficient guidance. In this regard, the Court stressed the differences between the disputed case and some landmark decisions previously rendered by the ECJ, such as the decisions in Airfield(C-431/09) and SGAE/Rafael Hoteles (C-306/05). Also, the Court recalled that ISPs are intermediaries that are essential for the functioning of the Internet, in the light of the decision UPC Telekabel (C-314/12). Without them, the “initial” communication cannot take place.

By the end of March, SABAM has decided to lodge an appeal against the Court of First Instance’s decision.

The case can be found on http://www.ie-forum.be