Intellectual Property and the E-Commerce Directive - Assignment Example

INTELLECTUAL PROPERTY Case analysis: intellectual property The injunction against the information services provider may not consistent with United Kingdom law and that of the Court of Justice of the European Union (CJEU). The injunction conflicts with the rights of the Information Society Service Provider and the legitimate rights of customers of the ISP, and the blocking is not consistent with CJEU’s due to the monitoring obligations imposed on the provider. However, the injunction may be sound because the threshold conditions for granting an injunction are met in the case. Injunctions are effective in preventing copyright infringement, but the scope of this injunction conflicts with CJEU’S Directives. Past rulings by the CJEU and The High Court of England and Wales, will be useful in analyzing the soundness of this injunction. According to the EU’s E-commerce Directive, there is need for a balance to be struck in order to create a system that exempts intermediaries such as the information society service provider who function as conduits of information and do not engage in monitoring or editing of content1. In the case project, balance is not struck. The Directive clearly states that an intermediary that expeditiously removes access to illegal content once they have received notice of the infringement will not be held liable. Additionally, Article 12.1 of the Directive states that a service provider cannot be held liable for content transmitted through its network if the provider does not start the transmission, does not choose the receiver of the content, and does not alter the content. The above injunction against the Information Society Services Provider is blanket in nature, which deviates from the E-commerce detective. The E- Commerce Directive rules out the creation of monitoring obligations for intermediaries. According to article 15, limitation of liability should not be interpreted as giving any obligation. In the above case, the injunction is giving an obligation to the provider. This implies that providers of online material will not be liable for illegal material that has been availed in their networks by its clients if the provider is a mere channel and has processes in place to take out the material quickly; and they will not be required to supervise activity in advance2. This principle of limitation of liability for internet service providers is applicable in many jurisdictions. Despite the present legislation, the debate concerning intermediary liability continues with industry and regulators raising the issue of liability. In analyzing this case, it is important to start with a European case that does not deal with copyright, but trademark in L‘Oreal v eBay3. The case is important to the project because dwells on the subject of intermediary liability, which is similar to that of the project. This case was filed by the cosmetics maker L ‘Oreal against eBay for the deeds of distributors of unlawful sampler items. The distributors removed the sampler package and auctioned the products on eBay. The question of this case was whether ebay is liable for trademark infringement by distributors who sold L ‘Oreal products on its site. By simply looking at the e-commerce directive, it is clear that eBay cannot be held liable, but the facts of this case complicated matters. eBay cannot be liable for goods traded on its site by third parties, but it permitted the placement of sponsored links to the illegal products. eBay also allowed the unauthorized distributors to include listings under the affected trademark. Additionally, the distributors could buy Google AdWords and other search engine placement that led to the eBay pages. This was whether these deeds amounted to liability. The CJEU ruled on the case in 2009 and concluded that the distributors infringed on the plaintiff’s trademark by trading on sampler and demarked products in eBay. The court also ruled that eBay was not jointly liable for the infringement, which is in line with the existing principle of intermediary liability. However, the presiding judge referred some aspects that dealt with specifics of injunctions and trademark law to the European Court Of Justice. The question of liability on this case centers on whether eBay was not liable under article 14 of the e-commerce directive. This Directive protects intermediaries against liability of the provider offers storage of material given by its customers and is not knowledgeable of the unlawful activity, and upon being served with notice of the illegal material, removes it quickly. This ruling by the ECJ is interesting since it preserves the principle of intermediary liability and determines that some of eBay’s activities are beyond general exemption. As the ECJ’s interpretation, the principles of article 14 apply if the provider is not knowledgeable of the illegal material4. However, the provider is liable if it offers assistance or is aware of the activity on the foundation of which a diligent provider should have known that the activity in question is illegal. The issue of whether the injunction against the information society service provider conflict with the rights of the provider and the legitimate rights of its customers should be analyzed according to these principles. Although L ‘Oreal v eBay case concerns trademark infringement, it offers a very interesting test. In case an internet service provider assist people in optimizing the presentation of infringing content, they are liable. Additionally, they might be liable if they had knowledge that the product was infringing. The L ‘Oreal case sets the limitations of the actions that internet service providers have to undertake in order to be liable for the content accessed by its customers. In the injunction against the Information Society Service Provider, it is evident that the providers did not play any active role in optimizing the presentation of the infringing content and did not have prior knowledge of the existence of the infringing material. Additionally, the provider was not served of a notice of the existence of the infringing material and did not remove it quickly. Lastly, it is evident from the case that the providers will foot the cost of blocking and filtering the infringing material, which contravenes the principles of e-commerce directive. Due to the existing restrictions that favor internet service providers and other intermediaries, some copyright holders have attempted to find other routes that will enable them to target intermediaries without breaking the existing laws5. One was that has been used and is the same with the case is by serving the providers with injunctions, which do not force removal of content, but forces providers to block and filter infringing material to prevent access by users. This is similar to a form of internet regulation referred to as control of chokepoints. This form of control is effective and controversial because the possibility of making internet service providers is low and may be illegal6. The case of Scarlet v SABAM is a perfect illustration that blocking and filtering may contravene certain principles and rights enshrined in other provisions7. In the case, SABAM (Belgian Society of Authors, Composers, and And Publishers) filed a case against Tiscali, which later altered its name to Scarlet in 2004. According to SABAM, Tiscali’s customers were unlawfully downloading its catalogues from the web through P2P networks. SABAM wanted the defendant to put in place filtering software that would prevent further infringement. The first ruling was given by the district court of Brussels, and it favored the plaintiffs based on expert reports showing the feasibility of installing filtering software in Tiscali’s networks. Tiscali contented that the solutions were partial and ineffective since P2P clients cannot be filtered due to encryption technology. Tiscali appealed this ruling, and the case proceeded to ECJ. In essence, the referring court realized that the case was beyond the restrictions of liability enshrined in the e-commerce Directive and there was likelihood of conflict arising between Copyright Directive 2001/298, Data Protection Directive 95/469, IP Enforcement Directive 2004/4810, Electronic Privacy Directive 2002/5811, and articles contained in the European Convention on Human Rights. The court sought direction of the possibility of a national court initiating a blanket and widespread filtering system that would need regular surveillance at the cost of the ISPs through an injunction. This is because such an act might infringe on basic rights and freedoms contained in different statutes and conventions, and it doing so demands respecting principles of proportionality. It is clear that the Belgian court was aware of the implications of implementing a filtering system without a substantive ruling, and the possibility of injunctive relief causing injury to ISPs. The ECJ ruled that an injunction seeking filtering by ISPs would conflict with other legal tenets. It was clear from the start that the ECJ would not sanction a rule that favored blanket monitoring, as ii would contravene article 15 of the E-commerce directive. This Directive states that member countries shall not oblige intermediaries to check the information they transfer or store. Any law favoring filtering would violate this rule and will require certain action from the intermediary12. First, the intermediary identifies files linked to peer-to-peer traffic (P-2-P). Second, the intermediary identifies files containing infringing material. Third, intermediaries should indentify the files being shared illegally and last it should block file sharing that it determines to be illegal. Additionally, the ECJ rule that rights safeguarded under intellectual property laws are enshrined in the European Union charter of fundamental human rights, but these rights are not supreme and must be understood in combination with other laws. This implies that the protection of intellectual property rights must be in line with protection of other basic rights13. All measure adopted to safeguard intellectual property requires court and national authorities to strike a fair balance between safeguarding IP rights and basic rights of persons affected by such initiatives14. There are certain basic rights that would be violated by a filtering system as opined by the ECJ. First, the freedom of ISPs to engage in business would be violated because implementing such a system will be expensive, and the ISPs would pay for the expenses alone. This is inline with article 3 of the E-Commerce directive, which states that intellectual property remedies must be just and impartial and shall not needlessly expensive or expensive, or involve unreasonable time limits or unnecessary delays15. For customers, implementing such a filtering system infringe on their right to protection of individual data, and the freedom to receive or convey information. Lastly, the court rules that a system that would be implemented by injunction for efforts that did not even exists when the injunction was issued would be shrouded by procedural challenges. However, specific injunctions are possible, what was outlawed by the court was implementation of a blanked filtering system. The filtering system that was outlawed by the ECJ’S ruling required all electronic communications going through the networks of ISP to be filtered. Additionally, the court rule against a system that applies indiscriminately to all users as a preventive measure, and was to be implemented at the cost of ISPs for an indefinite period. This ruling involves all the balancing aspects of copyright protection and it sets the limits of how filtering should be implemented. Although SABAM v Scarlet set a high-threshold test, many European courts have issued filtering injunctions against certain sites16. In the United Kingdom, owners of copyright have successfully sought injunctions against various sites. One interesting case is that of twentieth century fox and others v Newzbin. Several Hollywood studious filed a case against Newzbin, a popular file sharing site for Infringement of copyright. The site operated a subscription service that encouraged its customers to share all types of content. Newzbin argued that it was a service provider; there, it was liable for infringement by its users17. The court ruled in favor of the plaintiffs because it was clear that the owners of Newzbin were aware of copyright infringement taking place in the site. After this ruling, Newzbin was liquidated and the initial site stopped operating. However, another site using the same address started operating. Its operators could not be identified and it seemed that it operated from another country, which was beyond the jurisdiction of the court. The claimants sought an injunction that would compel British Telecom (BT) to block its customers from accessing Newzbin using a technology referred to as “cleanfeed.” BT had been using the technology to block pornography sites. According to the claimants, this was the only way to execute the substantive ruling and the high court concurred with them18. The claimants sought the injunction under s97A CDPA, which states that the High Court has the mandate to issue an injunction against an ISP if the provider has knowledge of another person infringing on copyright using their service19. This section was incorporated into the CPDA as an outcome of the e-commerce Directive of 2001 that requires member countries to ensure that injunctions are issued against intermediaries whose services are utilized by third parties for copyright infringement. Although BT concurred that it was a service provider, it appealed the injunction. The court relied on technical issues to issue the blocking injunction against BT. The court used the example of voluntary sites that blocked pornographic content as evidence of the possibility of blocking internet protocol addresses20. The court believed that if it was possible to restrict access to some pornographic content, then it was possible to block the IP address of sites such as Newzbin. However, the court did not address the efficacy of blocking and filtering order in the case21. This is because using a judicial order to block access by British users to a particular site will not be effective since the order can be bypassed easily. The claimants and the court seemed to understand this fact, but they proceeded with a hint that the objective was to send a strong message to other infringers. The NEWZBIN case was decided before the SBAM case; therefore, the high court relied on a translation of the opinion of the Advocate General. The outcome of the Newzbin case was immense because other similar blocking injunctions were issues in the United Kingdom with The Pirate Bay being the next. The ruling of the case in The Pirate Bay required internet service providers to implement steps to technically block access from their clients to the pirate bay. Considering the precedents, this ruling was not surprising. In this case, various recording studios and representatives of the music industry filed a case against different provider seeking to get a blocking injunction like in the case of Newzbin. The case against The Pirate Bay was unique compared to other cases since the music industry did not file a case against the pirate bay, but sought to get an injunction against the intermediaries without in involving the defendants. The high court determined the infringement component of the case before issuing the blocking injunction22. On the other hand, the injunction against the provider may be sound. It is clear from the case that infringement did occur because the customers of the information services provider could access copyrighted material. Seeking an injunction against the provider is one way of preventing infringement of copyright, which is applicable in this case. Blocking the domain name and IP address of the website and other IP addresses the provider may be aware of are the only strategies that can prevent infringement. In particular, blocking the website with infringing material and other IP addresses is a specific measure that is not blanket in nature. This may be consistent with EU’s E-commerce directives and United Kingdom laws. The injunction is balanced because it does not prevent the provider’s customers from accessing other information on the internet, but only the infringing material. Additionally, the injunction does not violate the right of the provider to engage in business. It is possible that the provide was aware of the infringement and did not take any measure to prevent it. This makes the provider liable for infringement by its customers, which is consistent with past case laws and EU’s E-commerce directive. The recourse taken by copyright owners to seek and injunction that is specific in nature is within their legal rights to safeguard its property. The threshold conditions for issuing and injunction are met in this case. First, the information services provider in an intermediary within the enforcement directive. Secondly, the users of the target website engage in infringing activity. Third, the users must be using the provider’s services to infringe and lastly the providers must be aware of the infringement. These threshold conditions are derived from recent case law and EU directives. They are intended to safeguard intermediaries without knowledge of infringement. Since the case satisfied all the conditions, the court balanced the competing interests of the provider, copyright owners, and the public based on proportionality. The court considered whether alternative measures are available, effectiveness of the measure, costs associated with the measure, and the effects of the measure on lawful clients. The ruling in these case was straightforward since the implementation costs for blocking copyright infringement are available and there is sufficient evidence showing that blocking is an effective way of preventing copyright infringement. This was the line of argument followed in the case of Cartier AG and Others v. BskyB and Others (2014)23. The high court of England and Wales rule that it had jurisdiction to order a provider to block access to websites containing infringing material. It is evident from the rising number of cases that court injunctions blocking access to certain websites is here permanently. In the case of EMI records v B Sky B, the court produced another high-profile injunction for internet service providers against KAT, Fenopy and H33T, which are three popular torrent sites. This case was similar to that of The Pirate Bay since it was filed by the music industry against the ISPs and not against the website owners. This was very straightforward because it followed the format of the Newzbin and The Pirate Bay cases. In the ruling, the judges determined that the injunctions were proportional considering the seriousness of the crime24. It also declared that it had jurisdiction over the matter. Similar to the decision in The Pirate Bay case, the court delved into the substantive issue of whether copyright infringement occurred. This case is relevant to the case project in that it clearly separated the copyright liability of the clients and that of the owners of the site. First, the presiding judge evaluated that the clients of the site violated copyright directly and in communication with the public. This was not spring because copyright owners have moved from filing cases against users, and this fact is only considered as evidence that copyright infringement occurs in the sites. The plaintiffs argued that the three intermediaries were liable for infringement for three reasons. First, the liable because they are communicated copyright protected material to the public, which is makes them guilty of infringement. Second, the intermediaries were guilty because of tort of sanctioning infringement. Lastly, the intermediaries had actual knowledge of the infringement and their business models are founded on piracy25. All these are in line with the reasoning behind the Newzbin case. Citing the case of SABAM v Scarlet, the decision to impose an injunction against the Information Society Service Provider Would constitute blanket monitoring. Additionally, imposing an injunction seeking blocking of the IP address of the copyright holder will be unjust and not proportionate. It will also be incompatible with article 3 of the E-commerce Directive since the provider will foot all the expenses. Additionally, it will violate the right of the Information Society Service Provider to engage in business under the provisions of the basic rights of the European Union26. Considering the court of justice of the European Union decision in SABAM v Scarlet and that of the High court of England and Wales in the Newzbin case, the two decisions may seem at odds. However, the underlying factor is the scope and depth of the filtering system under investigation in the SABAM case. In the SABAM case, the injunction covered the blocking of all communication, while in the Newzbin case the injunction targeted a specific website. Therefore, the decision to impose an injunction on the Information Society Service Provider with stringent conditions requiring blocking access to copyrighted material violates the provisions of the E-commerce Directive and other fundamental human rights since the scope of the blocking is unclear and the provider will be required to cater for the costs. It may also be sound because it meets the threshold conditions for granting an injunction. Bibliography Bently, sherman, Intellectual property law, third edition. Oxford: Oxford University Press. Brown A, Guadamuz A, and Hatcher J, “The Impact Of Free Trade Agreements On Information Technology Based Business”, 2:1 Geopolitics, History, And International Relations 62 (2010). Davies, Colin, and Tania Cheng. Intellectual Property Law in the United Kingdom. Alphen aan den Rijn, The Netherlands: Kluwer Law International, 2011. Directive 2000/31/EC of the European Parliament and of the Council of 8 June 2000 on certain legal Aspects of information society services, in particular electronic commerce, in the Internal Market, OJL 178/1 (2000). Directive 2001/29/EC of the European Parliament and of the Council of 22 May 2001 in the information society OJ L 167/10 (2001). Directive 2002/58/EC of the European Parliament and of the Council of 12 July 2002 OJL 201/37 (2002). Directive 2004/48/EC of the European Parliament and of the Council of 29 April 2004 OJL 157/16 (2004). Directive 95/46/EC of the European Parliament and of the Council of 24 October 1995 OJL 281/31 (1995). EMI Records Ltd & Ors v British Sky Broadcasting Ltd & Ors [2013] EWHC 379 (Ch). Goldsmith, J.L and Wu, T, Who Controls the Internet? Illusions of a Borderless World, Oxford: Oxford University Press (2006). 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Senftleben, M.R.F, Copyright, Limitations, And the Three Step Test: An Analysis of the Three- Step Test in International and EC Copyright Law, The Hague; London: Kluwer Law International (2004). Twentieth Century Fox Film Corp & Ors v British Telecommunications Plc [2011] EWHC 1981. Twentieth Century Fox Film Corporation & Anor v Newzbin Ltd [2010] EWHC 60 Read More