UPC Telekabel—ISPs can be subject to non-specific site blocking orders

UPC Telekabel Wien GmbH v Constantin Film Verleih GmbH and anor: C-314/12 [2014] All ER (D) 302 (Mar)The CJEU considered whether injunctions issued against, for example, internet service providers (ISPs) requiring them to block access to copyright infringing websites must be specific as to the measures an access provider must take and also whether such injunctions are compatible with various EU Directives and fundamental rights.

[caption id="attachment_5881" align="alignnone" width="240"]ISPs-between a rock and hard place Photo: Michael Sheehan - Flickr ISPs-between a rock and hard place
Photo: Michael Sheehan - Flickr[/caption]

What was the factual background to this case?

A website made films available as downloads or for streaming on an unauthorised basis. Two film production companies sought an order enjoining UPC Telekabel, an ISP, to block the access of its customers to the website by blocking that site’s domain name and current IP address and any other IP address of that site of which UPC Telekabel might be aware.

Austria’s Supreme Court decided that:

  1. local laws must be interpreted in the light of Directive 2001/29/EC, art 8(3) (the InfoSoc Directive)
  2. by giving its customers access to content illegally placed online, UPC Telekabel had to be regarded as an intermediary whose services were used to infringe a right related to copyright—with the result that the film production companies were entitled to request that an injunction be issued against UPC Telekabel
  3. as regards the protection of copyright—UPC Telekabel could only be required to forbid its customers access to the website at issue, but it had to remain free to decide the means to be used

UPC Telekabel’s submitted case was that its services could not be considered to be used to infringe a copyright or related right within the meaning of the InfoSoc Directive, art 8(3) because:

  1. it did not have any business relationship with the operators of the website at issue
  2. it was not established that its own customers acted unlawfully, and
  3. the various blocking measures which may be introduced can all be technically circumvented and some of them are excessively costly

The Austrian Supreme Court made a reference to the CJEU for a preliminary ruling.

What questions were referred to the CJEU?

Four questions were referred—questions 2 and 4 were not answered and are not dealt with here.

Question 1

This centred around the InfoSoc Directive, art 8(3) (which requires member states to ensure rightholders can apply for an injunction against intermediaries whose services are used by a third party such as a website operator to infringe copyright) and whether it should be interpreted as meaning that a person who makes protected subject matter available on the internet without consent is using the services of the business which provides internet access to those accessing that subject matter.

Question 3

This dealt with EU fundamental rights, asking whether general injunctions (as opposed to those ordering specific measures) issued against the user’s access provider in accordance with the InfoSoc Directive, art 8(3) are compatible with union law—in particular with the necessary balance between the parties’ fundamental rights (such as under various articles of the Charter of Fundamental Rights of the European Union (the Charter)).

What was the CJEU’s response?

Early on in the ruling, the CJEU reinforced the message that site-blocking orders are leading the way in the battle against online piracy by stating that intermediaries, used by third parties for infringing activities, are best placed to bring infringing activities to an end.

In answer to question 1

The ISP, which allows its customers to access protected subject-matter made available to the public on the internet by a website operator is an intermediary whose services are used to infringe a copyright or related right within the meaning of InfoSco Directive, art 8(3) (there did not need to be a contractual link between the ISP and the person who infringed a copyright or related right)—this ruling was not controversial.

In answer to question 3

Fundamental rights recognised by EU law must not prevent a non-specific site blocking injunction when the access provider can avoid incurring coercive penalties for breach of that injunction by showing that it has taken all reasonable measures, provided that the measures taken do not unnecessarily deprive internet users of the possibility of lawfully accessing the information available. Those measures must have the effect of preventing unauthorised access to the protected subject-matter or, at least, make it difficult to achieve or be seriously discouraging.

In particular:

  1. an injunction such as that at issue in the main proceedings, taken on the basis of the InfoSoc Directive, art 8(3), results primarily in a conflict between copyrights and related rights, the freedom (for ISPs) to conduct a business, and the freedom of information of internet users
  2. where several fundamental rights are in issue, member states must strike a fair balance and interpret national law in a way that is not in conflict with those fundamental rights (such as the principle of proportionality)
  3. such an injunction does not seem to infringe the very substance of the freedom of an ISP, such as that at issue in the main proceedings, to conduct a business
  4. such an injunction leaves its addressee to determine the specific measures to be taken in order to achieve the result sought—it can choose to put in place measures which are best adapted to the resources and abilities available to it and which are compatible with the other obligations and challenges which it will encounter in the exercise of his activity
  5. such an injunction allows its addressee to avoid liability by proving that he has taken all reasonable measures—the addressee will not be required to make ‘unbearable sacrifices’
  6. under the principle of legal certainty, it must be possible for the addressee of an injunction to maintain before the court, once the implementing measures which they have taken are known and before any decision imposing a penalty on them is adopted, that the measures taken were indeed those which could be expected of him in order to prevent the proscribed result
  7. the measures adopted by the ISP must be strictly targeted—in the sense that they must serve to bring an end to a third party’s infringement of copyright but without affecting internet users who are using the provider’s services in order to lawfully access information
  8. national procedural rules must provide a possibility for internet users to assert their rights to freedom of information before the court once the implementing measures taken by the internet service provider are known

What should lawyers take from this case?

Specific versus non-specific orders

In the UK, for some time now, copyright owners have been using site-blocking powers under the Copyright, Design and Patents Act 1988, s 97A (CPDA 1988) to take action against infringing websites (see Twentieth Century Fox Film Corp v Newzbin Ltd [2010] EWHC 608 (Ch)[2010] IP & T 1122 and Paramount Home Entertainment International Ltd v British Sky Broadcasting Ltd [2013] EWHC 3479 (Ch)[2013] All ER (D) 151 (Nov)).

It remains to be seen whether this ruling will change the nature of CDPA 1988, s 97A site blocking injunctions in UK courts. English judges (mainly Arnold J) have already been considering, quite thoroughly, the proportionality of site blocking orders before the orders are made, for example in EMI Records Ltd v British Sky Broadcasting Ltd [2013] EWHC 379 (Ch)[2013] IP & T 774 (paras [90]–[106]). In EMI, Arnold J acknowledged that the proportionality of a blocking order is ‘a context-sensitive question’.

As to more general orders, Arnold J’s site blocking orders ‘are narrow and targeted ones…they contain safeguards in the event of any change of circumstances. The cost of implementation to the defendants will be modest and proportionate’ (EMI, para [107]). In the light of this approach, a general order in the English courts that ‘leaves its addressee to determine the specific measures to be taken in order to achieve the result sought’ is unlikely to be popular because it is bound to be more uncertain. On the other hand, if a general order is given, the detailed contents of existing orders may act as guidelines for ISPs as to what may constitute ‘reasonable measures’. ISPs will want to be guided by the courts—arguably, it is cheaper than having to justify in a separate court hearing why an ISP has chosen certain measures.

What else should lawyers look out for in this area?

And what of the prospect of an internet user supposedly asserting his rights? The English courts have experience here too. In Twentieth Century Fox Film Corporation v British Telecommunications plc (No 2) [2011] EWHC 2714 (Ch)[2012] 1 All ER 869, a BT subscriber, Mr McMahon, who said he would be adversely affected by the proposed site blocking order, applied to be joined as an additional respondent to the proceedings. He wasn’t joined (as the ‘Casual Editor’ of Newzbin2, some of the evidence he relied on was treated as inaccurate) but he made some submissions with regards to the form of order—he wanted one that was more targeted at infringers. He proposed a system of warning notices to subscribers inspired by the Digital Economy Act 2010 (DEA 2010) and Ofcom’s draft Initial Obligations Code. This was refused by Arnold J who doubted that an order in that form would comply with the UK’s obligations under the InfoSoc Directive, art 8(3).

DEA 2010 sets out a procedure for tackling copyright infringement. DEA 2010 provisions create the new obligations for ISPs referred to above and referred to as the ‘initial obligations’. They are beyond detailed discussion here but see our Practice Note:Digital Economy Act 2010 (contained in a subscription only service in Lexis®PSL IP & IT)

DEA 2010, s 17 allows for the passing of regulations that would force ISPs to disconnect their customers if copyright owners could show that a subscriber was using their account to infringe copyright. The government has subsequently indicated that it will not enforce this provision. Section 27 of the Deregulation Bill repeals the government’s power to make provision for blocking injunctions.

At the time DEA 2010, s 17 was introduced, CDPA 1988, s 97A claims were in their infancy and the government considers now that a combination of CDPA 1988, s 97A, the City of London Police IP Crime Unit, the Intellectual Property Office’s mediation service and reforms to the Intellectual Property Enterprise Court all provide support for businesses looking to protect and enforce their IP rights (see Report: Government response to CMS Select Committee report on supporting the creative economy).

Arguably, the way ahead is that one or a mix of these organisations is used to combat internet piracy, with ISPs (reluctantly perhaps) in the lead and to some extent together with rights holders, funding the way. There is increasing pressure on ISPs to take a more prominent role in discouraging copyright infringement and pushing on with a Voluntary Copyright Alert Programme in the UK, referred to recently in the House of Commons, will help achieve this.

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