In a case between the collecting society SABAM and internet service provider Scarlet, relating to the measures which can be imposed on Scarlet to prevent illegal peer-to-peer (P2P) file sharing over its network, the Brussels Court of Appeal has referred to the European Court of Justice (ECJ) two questions about the legality (including a test of proportionality) of the injunctions requested by SABAM.

The case began on 24 June 2004, when SABAM, the largest Belgian copyright collecting society, initiated summary proceedings against S.A. Tiscali, now Scarlet Extended, an internet access provider with a market share in Belgium of less than 4%. SABAM requested that the President of the Court of First Instance of Brussels impose a cease and desist order against Scarlet to prevent its subscribers from copying and making available to the public, through various P2P tools, files containing copyright protected music.

The initial claim was based on section 87, §1 of the Belgian Copyright Act of 30 June 1994, which allowed the President to order the cessation of any infringement of copyright or neighbouring right. At that time it was commonly accepted that the President had jurisdiction to decide on such claims, even though Belgium had not yet implemented the EU Copyright Directive 2001/29 including, in particular, article 8.3 which imposes an obligation on Member States to “ensure that right holders are in a position to apply for an injunction against intermediaries whose services are used by a third party to infringe copyright (…)”.

In an interlocutory judgment given on 26 November 2004, the President held that SABAM’s rights were being infringed and, before rendering a final decision, he appointed a judicial expert to investigate the feasibility of technical measures and their related costs to block or filter illegal file sharing.

In the report that he submitted to the President in January 2007, the appointed expert identified seven filtering solutions applicable to Scarlet’s network, but indicated that only one of them, called Audible Magic, seeks to identify specific content on P2P networks rather than merely identifying P2P applications. The expert stressed, however, that technical validity and efficiency over the medium term could not be guaranteed for any filtering solution. Furthermore, he stated that the Audible Magic solution as such was not sized to be used as a filter by an ISP, and that it did not block all protected content and also blocked some unprotected content.

However, the President concluded that satisfactory technical filtering measures were available and, in a judgment on 29 June 2007, ordered Scarlet to prevent infringement of SABAM’s rights:

"by making impossible for its clients to send or receive through peer to peer software electronic files containing protected musical works included in the SABAM repertoire”.

The 28 January 2010 Brussels Court of Appeal decision arises from an appeal filed by Scarlet against this judgment of 29 June 2007.

The Court held that section 87, §1 of the Belgian Copyright Act of 30 June 1994 must be interpreted in accordance with the relevant provisions of the 2000/31 E-Commerce Directive (which organises the liability regime of ISPs, including prohibiting ISPs from being generally required to monitor the content of the communications that it transmits) and also the 2001/29 Copyright in the Information Society Directive and the 2004/48 Intellectual Property Rights Enforcement Directive (both of which allow, under certain conditions, competent judicial authorities to impose injunctions against intermediaries whose services are used by a third party to infringe copyright).

The Court also questioned whether the measures requested by SABAM would not breach EU and national privacy and data protection laws (such as the 95/46 Data Protection Directive and the 2002/58 Privacy and Electronic Communications Directive).

The Court referred to the ECJ’s 29 January 2008 ruling in the Promusicae matter. This case concerned a request from Promusicae, the Spanish organisation of producers and publishers of musical and audiovisual recordings, that Telefónica, an ISP, should disclose the identities and physical addresses of certain of Telefónica’s clients who had been using P2P software and providing access to shared files of personal computers to copies of musical recordings in which members of Promusicae held exploitation rights. Promusicae sought disclosure of the above information in order to be able to bring civil proceedings against the persons concerned.

In its judgment of 29 January 2008, the ECJ held that, when implementing EU Directives relating to intellectual property and the protection of personal data, Member States must do so in a way which allows a fair balance to be struck between the various fundamental rights protected by the legislation (namely the right to respect for private life on the one hand and the rights to protection of property and to an effective remedy on the other). Further, when interpreting the national implementation of those directives, Member States’ authorities and courts must not only interpret their national law in a manner consistent with the Directives, but also make sure that they do not interpret them in a way which conflicts with those fundamental rights or with the other general principles of EU law, such as the principle of proportionality.

The Brussels Court of Appeal stated that it is bound by the same need to reconcile the requirements of the protection of different fundamental rights, it being however understood that, in the present case, the interference in privacy would affect all the ISP’s customers and occur prior to any actual intellectual property rights infringement, instead of affecting a limited amount of individuals whose IP address and date and time of connection were known after infringement of intellectual property rights, as in the Promusicae matter.

The Court therefore deemed it necessary to refer the two following questions for preliminary ruling to the ECJ:

“1/ Do Directives 2001/29 [Copyright] and 2004/48 [(IPR) Enforcement], read in conjunction with directives 95/46 [Data Protection], 2000/31 [E-Commerce] and 2002/58 [privacy and electronic communication], interpreted notably in light of Articles 8 [privacy] and 10 [expression] of the Convention for the Protection of Human Rights and fundamental freedoms, allow Member States to authorize a national judge seized within the framework of a procedure on the merits and on the basis of the sole legal provision providing that: "They [the national judge] can also order a cease and desist injunction against intermediaries whose services are used by a third party to infringe a copyright or related right”, to order an Internet Access Provider (IAP) to roll out, towards all its clientele, in abstracto and preventively, at the exclusive expense of the IAP and with no time limit, a filtering system of all electronic communications, both inward and outward, passing through its services, notably by the use of peer to peer software, with a view to identify on its network the flow of electronic files containing a musical, cinematographic or audio-visual work in which the plaintiff claims to have rights and then block their transfer, either at the level of the request or at the occasion of sending?

2/ In case of a positive answer to question sub.1., do these Directives require the national judge, requested to rule on a request for an injunction against an intermediary whose services are used by a third party to infringe a copyright, to apply the principle of proportionality when he has to decide on the effectiveness and dissuasive impact of the requested measure?”

The ECJ’s answers to these questions will lead to a more harmonised approach to an issue which has, so far, created conflicting case law within Member States and will therefore be scrutinised by industry.