Thursday, March 27, 2014

CJEU Allowed Website Blocking Injunctions With Some Reservations

So the CJEU finally issued its UPC Telekabel Wien C-314/12 decision. It contains several good points, but also some missed opportunities (the rejections of a need of specific measures is quite a disappointment), and black-box type of issues, where only the time will tell.

But before I get to the ruling, it is very interesting to see that CJEU yet again (Scarlet, Sabam same story) did not follow a very interesting argumentation of the Advocate General Cruz Villalón, who suggested to take a look at the injunctions also from the perspective of "quality of the law". This might be a good/bad news for the pending data retention reference in Digital Rights Ireland C-293/12, where he suggested to the CJEU to invalidate the data retention directive mostly not due to proportionality considerations, but for "quality of the law" reasons. I think that his argument there is politically not acceptable for the CJEU, but let's see. So back to the website blocking.

The Court first accepts (§ 23-40) that an access provider who has no affiliation or business relationship with the infringers (streaming websites) can still be a target of the injunctions against intermediaries. This basically means that anybody who enables infringement is capable of being sued from Art. 8(3) injunctions. No surprise here.

In the second part, the Court allows some of the website blocking injunctions as such, but makes it subject to couple of conditions. The Court recalls that the case is about a maximal admissible celling of these injunctions (§ 45), and not about minimal standard required from the Member States (§ 43). This means, as I suggested earlier, that this case in fact does not answer whether the Member States have to provide for such injunctions, but only whether they are permissible when provided for under the national law.

The Court stylized the entire judgment in the perspective of conflicting human rights: 
  • (i) copyrights and related rights, which are intellectual property and are therefore protected under Article 17(2) of the Charter, 
  • (ii) the freedom to conduct a business, which economic agents such as internet service providers enjoy under Article 16 of the Charter, and 
  • (iii) the freedom of information of internet users, whose protection is ensured by Article 11 of the Charter. 
As anticipated earlier, the right to fair trial argument did not appear in the case, but there are some consequences for it as well (see below). The relevant part of the decision are then § 49 -63.

49      The freedom to conduct a business includes, inter alia, the right for any business to be able to freely use, within the limits of its liability for its own acts, the economic, technical and financial resources available to it.

50      An injunction such as that at issue in the main proceedings constrains its addressee in a manner which restricts the free use of the resources at his disposal because it obliges him to take measures which may represent a significant cost for him, have a considerable impact on the organisation of his activities or require difficult and complex technical solutions.

51      However, such an injunction does not seem to infringe the very substance of the freedom of an internet service provider such as that at issue in the main proceedings to conduct a business.

52      First, an injunction such as that at issue in the main proceedings leaves its addressee to determine the specific measures to be taken in order to achieve the result sought, with the result that he can choose to put in place measures which are best adapted to the resources and abilities available to him and which are compatible with the other obligations and challenges which he will encounter in the exercise of his activity.
I think this is implicit acceptance of openly formulated website blocking injunctions, and also rejection of AG's suggestion of a need for specific measures. This should make German BGH feel more comfortable with its own case-law. Not sure about ISPs.

53      Secondly, such an injunction allows its addressee to avoid liability by proving that he has taken all reasonable measures. That possibility of exoneration clearly has the effect that the addressee of the injunction will not be required to make unbearable sacrifices, which seems justified in particular in the light of the fact that he is not the author of the infringement of the fundamental right of intellectual property which has led to the adoption of the injunction.
This paragraph is slightly confusing, but I think it essentially refers to execution proceedings when an openly formulated website blocking injunction was being granted. Again, this kind of rule might make a perfect sense for a German or other lawyer who is used to negligence based liability for disobeying the rulings also in the execution proceedings. In some countries, however, execution proceedings attaches strict liability standards to disobeying of the decisions. For these countries, it might be more challenging to implement this principle. This seems to shift the entire debate of exact measures from the court proceedings to the execution proceedings. Also I keep wondering how compatible with the eCommerce Directive it would be to fine an access provider in such proceedings, as Art. 12 safe harbor might be still a limitation here (just a thought).

54      In that regard, in accordance with the principle of legal certainty, it must be possible for the addressee of an injunction such as that at issue in the main proceedings to maintain before the court, once the implementing measures which he has taken are known and before any decision imposing a penalty on him is adopted, that the measures taken were indeed those which could be expected of him in order to prevent the proscribed result.

55      None the less, when the addressee of an injunction such as that at issue in the main proceedings chooses the measures to be adopted in order to comply with that injunction, he must ensure compliance with the fundamental right of internet users to freedom of information.

56      In this respect, the measures adopted by the internet service provider must be strictly targeted, in the sense that they must serve to bring an end to a third party’s infringement of copyright or of a related right but without thereby affecting internet users who are using the provider’s services in order to lawfully access information. Failing that, the provider’s interference in the freedom of information of those users would be unjustified in the light of the objective pursued.
This is an important point. The CJEU here implicitly adheres to the prohibition of the collateral censorship as stipulated in the case-law of the ECHR. This part of the ruling should prevent some forms over-blocking e.g. by means of IP blocking when the IP address is shared.

57      It must be possible for national courts to check that that is the case. In the case of an injunction such as that at issue in the main proceedings, the Court notes that, if the internet service provider adopts measures which enable it to achieve the required prohibition, the national courts will not be able to carry out such a review at the stage of the enforcement proceedings if there is no challenge in that regard. Accordingly, in order to prevent the fundamental rights recognised by EU law from precluding the adoption of an injunction such as that at issue in the main proceedings, the national procedural rules must provide a possibility for internet users to assert their rights before the court once the implementing measures taken by the internet service provider are known.
I consider this to be the most important part of the ruling. My reading is that unless the procedural law of the Member State can guarantee that, the website blocking can not be granted at the first place. Although this remark is made in the framework of a right to the freedom of information, I believe that it can have a big impact also on the right to fair trial issue. Especially the countries that grant website blocking injunctions without any possibility to challenge them by the targeted website ex post (UK courts now incorporate such possibility), it might prevent the injunctions to be granted entirely. CJEU makes an important step by safeguarding the same for the Internet users as well. It would be interesting to see if the national law of your Member State enable that kind of challenge of a non-party. Any thoughts?

58      As regards intellectual property, it should be pointed out at the outset that it is possible that the enforcement of an injunction such as that in the main proceedings will not lead to a complete cessation of the infringements of the intellectual property right of the persons concerned.

59      First, as has been stated, the addressee of such an injunction has the possibility of avoiding liability, and thus of not adopting some measures that may be achievable, if those measures are not capable of being considered reasonable.
Again strict liability might be precluded in these cases.

60      Secondly, it is possible that a means of putting a complete end to the infringements of the intellectual property right does not exist or is not in practice achievable, as a result of which some measures taken might be capable of being circumvented in one way or another.

61      The Court notes that there is nothing whatsoever in the wording of Article 17(2) of the Charter to suggest that the right to intellectual property is inviolable and must for that reason be absolutely protected (see, to that effect, Scarlet Extended, paragraph 43).

62      None the less, the measures which are taken by the addressee of an injunction, such as that at issue in the main proceedings, when implementing that injunction must be sufficiently effective to ensure genuine protection of the fundamental right at issue, that is to say that they must have the effect of preventing unauthorised access to the protected subject-matter or, at least, of making it difficult to achieve and of seriously discouraging internet users who are using the services of the addressee of that injunction from accessing the subject-matter made available to them in breach of that fundamental right.
A difficult sentence, but probably says following: website blocking must (i) make it more difficult to access the source, and [sic!] (ii) seriously discourage Internet users from accessing the blocked source. It is my understanding that unless such a measure exists, not even an open ended injunctions should be granted. I think that the analyses of Justice Arnold in his blocking cases can hold the water in this respect. This part, however, needs to be scrutinized for its impact beyond this brief comment.
63      Consequently, even though the measures taken when implementing an injunction such as that at issue in the main proceedings are not capable of leading, in some circumstances, to a complete cessation of the infringements of the intellectual property right, they cannot however be considered to be incompatible with the requirement that a fair balance be found, in accordance with Article 52(1), in fine, of the Charter, between all applicable fundamental rights, provided that (i) they do not unnecessarily deprive internet users of the possibility of lawfully accessing the information available and (ii) that they have the effect of preventing unauthorised access to protected subject-matter or, at least, of making it difficult to achieve and of seriously discouraging internet users who are using the services of the addressee of that injunction from accessing the subject-matter that has been made available to them in breach of the intellectual property right.
My main issue with the judgment is that it rejected a need for a measure-specific injunctions as suggested by the Advocate General. The CJEU to the contrary, seems to be fine with shifting the debate to the executoin proceedings. I am not sure how flexible are these procedural rules in different countries. On the other hand, CJEU appers to set its standard for what is effective a bit higher than AG, who was also willing to accept also "easily circumventable measures". This negative parts are however somehow overweighted by a good feeling from paragraph 57 of the judgment. Let's see if the second look gives the same impression as well.

And also, an another consequence of this ruling is that the debate of what constitutes a general monitoring obligations can be perhaps again re-opend.

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