By Dugie Standeford for Intellectual Property Watch
Belgian Internet service provider (ISP) Scarlet Extended Ltd. (formerly Tiscali) must filter infringing music downloads, the Brussels Court of First Instance ruled recently. The decision, the first of its kind in Europe, dismissed ISPs’ concerns about filtering and could lead to more such lawsuits or changes to European Union law, according to representatives of the technology owner and of creators and publishers.

The court on 29 June brushed aside ISPs’ technical, economic and political arguments against mandatory filtering, setting the stage for similar litigation as well as possible changes to the European Union E-Commerce Directive, said attorney Winston Maxwell of the Paris office of Hogan & Hartson, which represents the owner of the technology recommended by a court-appointed expert but was not part of the lawsuit.

The case dates from 2004, when the Belgian Society of Authors, Composers and Publishers (SABAM) sued to force Scarlet to use technical measures to reduce the number of music files seen as infringing being swapped on peer-to-peer (P2P) networks, Maxwell said. The court allowed in an intermediary order that Scarlet customers were committing piracy but said it did not know enough about the technical aspects of filtering to make a final order, SABAM said. Instead, the court appointed a technical expert to examine various filtering solutions. The expert’s report was issued on 3 January 2007, the final decision on 29 June.

Content holders praised the outcome. The ruling “bears out exactly what we have been saying for the last two years – that the Internet’s gatekeepers, the ISPs, have a responsibility to help control copyright-infringing traffic on their networks,” said International Federation of the Phonographic Industry Chairman John Kennedy. “This is a decision that we hope will set the mold for government policy and for courts in other countries in Europe and around the world.”

Belgian ISPs are expected to comment Thursday on the case, an industry source said.

ISP Arguments Rejected

Scarlet raised several arguments, Maxwell said. It said the court order would violate Article 15 of the E-Commerce Directive, which bars member states from obliging ISPs to monitor content they transmit. The court, however, noted that the provision relates to ISP liability but does not limit a judge’s ability to set targeted measures to block access to certain content deemed illegal, Maxwell said.

The ISP also argued that mandatory filtering would cause it to lose its status as a “mere conduit” – rather than a provider – of content under the directive, Maxwell said. The court disagreed, saying automatic filtering technology does not mean that an ISP “selects or modifies” content, thus becoming a provider, so the decision should not affect its status for liability purposes.

The ISP argued that imposed filtering would breach privacy laws. The court, however, ruled that, as with anti-virus or anti-spam filtering, automatic blocking of infringing works does not necessarily involve the processing of personal data, Maxwell said.

To Scarlet’s argument that filtering technologies are overbroad because they block all P2P exchanges, the court said Audible Magic, the programme recommended by the expert, is able to target only songs registered in SABAM’s repertory, said Maxwell. Nor did the judges agree with the ISP’s argument that Audible Magic is too expensive and not scaled for operation on a major service provider, he said.

Precedential Ruling

The judgement requires Scarlet to install filtering technology within six months and bear all costs for its implementation, or face daily penalties of 2,500 euros. The ISP must also notify SABAM in writing of the measures it takes to comply with the ruling.
The ruling could set a precedent, SABAM said. If all Belgian Internet access providers adopted the technical measures recommended by the court expert, P2P software could no longer be used for sharing copyrighted works, at least in Belgium, it said.

The decision is “extremely important” because it is the first time a judge has “systematically examined, and rejected, all the traditional arguments that ISPs raise for not implementing filtering technology,” Maxwell said. ISPs already have sophisticated tools in their networks to block spam and viruses or shape traffic, he said. “It was just a matter of time until a judge said: ‘If you can block spam and computer viruses, you should also be able to block copyrighted content.’”

Language in the ruling indicating that implementing filtering measures does not affect an ISP’s ability to claim that it is merely a “technical intermediary” under the E-Commerce Directive will be useful to hosting providers who choose to install filters, Maxwell said.

The decision will likely be appealed because “the stakes are too high for the ISP industry across Europe,” he said, adding that it could also influence the upcoming debate on the Commission’s review of the directive.

“In the meantime,” Maxwell added, “I wouldn’t be surprised if similar lawsuits are brought in other European countries.”

Dugie Standeford may be reached at info@ip-watch.ch.