European Court of Human Rights: The Pirate Bay co-founders’ complaint “manifestly ill-founded”

The European Court of Human Rights (ECtHR) recently gave a decision in the case of Neij and Sunde Kolmisoppi v. Sweden. This is the second case in a short time that deals with copyright and freedom of expression. Whereas the case of Ashby Donald and others v. France was decided on the merits, this case was considered inadmissible and thrown out by the ECtHR. Nonetheless, the Court’s decision did provide an interesting read.

First, the facts of the case. Fredrik Neij and Peter Sunde Kolmisoppi are the co-founders of the famous torrent-platform that is The Pirate Bay (for a recent documentary about all the founders of The Pirate Bay, see this YouTube-video). In Sweden, they were convicted for furthering copyright infringement. They filed a complaint to the ECtHR and argued that their right to freedom of expression was breached. The Svea Court of Appeal had confirmed the District Court’s decision that “by making available its website with well-developed search functions, simple uploading and storing possibilities and through its tracker system, TPB [The Pirate Bay] had facilitated and furthered the crimes in violation of the Copyright Act and thereby, objectively been guilty of complicity to commit crimes in violation of the Act.” However, whereas the District Court had held that they should be held collectively responsible for these crimes, the Court of Appeals held that Neij and Sunde Kolmisoppi’s criminal liablity should be assessed indivually.

Neij was held responsible for “the programming, systematisation and daily operations of TPB.” Sunde Kolmisoppi “contributed to the financing of TPB by collecting debts from two advertisers and, moreover, to have contributed in closing an advertising agreement. He had further contributed to the development of TPB’s systematic tracker function and database. Lastly, he had configured a load balancing service for TPB.” The Court of Appeals held that they were not shielded from criminal liability on the basis of the ‘Electronic Commerce Act’, in which the liability exemptions of the European E-Commerce Directive are implemented. They had committed the offences intentionally and the exemptions from criminal liability could not apply under such circumstances.

Regarding the plaintiff’s claim for damages, the Court of Appeals noted the following:

“[…] TPB had created the possibility to upload and store torrent files, a database and a tracker-function. Thus, it had not merely offered transfer of data or caching, which was a precondition for freedom from indemnity liability under the Act. The Court of Appeal noted that the applicants had not taken any precautionary measures, and torrent files which referred to copyright-protected material had not been removed despite warnings and requests that they do so.”

When the Swedish Supreme Court refused leave to appeal, the Pirate Bay co-founders complained to the European Court of Human Rights. They argued that that their right to receive and impart information (Article 10 of the Convention) had been violated by the conviction.

The complaint

Neij and Sunde Kolmisoppi:

“Article 10 of the Convention enshrines the right to offer an automatic service of transferring unprotected material between users, according to basic principles of communication on Internet, and within the information society. In their view, Article 10 of the Convention protects the right to arrange a service on the Internet which can be used for both legal and illegal purposes, without the persons responsible for the service being convicted for acts committed by the people using the service. In this connection, they referred to international frameworks, expressing a far-reaching right to receive and provide information between Internet users.”

The ECtHR’s decision

When outlining the circumstances of the case, the ECtHR notes that “the service used the so-called BitTorrent protocol. TPB made it possible for users to come into contact with each other through torrent files (which in practice function as Internet links). The users could then, outside TPB’s computers, exchange digital material through file- sharing.” Technically speaking, the claim that torrent-files function as internet links is hard to maintain. Torrent-files only contain meta-data about downloadable files. They point to a ‘tracker’ that keeps a global registry of all the downloaders. When a user queries the tracker, it responds by providing a list of peers, with whom the user can establish a direct connection to download the files. The Pirate Bay allows users to upload torrent-files and operates a tracker so they are involved in a large part of the process, from finding a torrent-file to providing a list of peers from which parts of files can be downloaded. This of course does not support the statement that torrent-files function as links. They are, at the most, indirect links.

The ECtHR holds that The Pirate Bay co-founders’ conduct falls under Article 10(1) of the Convention, and that Sweden, by convicting them, had interfered with their right to freedom of expression. The Court reiterates its decisions in the Times Newspaper-cases and the recent Ashy Donald-case, and underlined that the Internet, “in the light of its accessibility and its capacity to store and communicate vast amounts of information, […] plays an important role in enhancing the public’s access to news and facilitating the sharing and dissemination of information generally”.

On the basis of Article 10(2) of the Convention, the exercise of the freedom of expression may be subject to formalities, conditions, restrictions or penalties, only if they are ‘prescribed by law’, pursue one or more of the legitimate aims referred to in Article 10(2) of the Convention and are ‘necessary in a democratic society’. The ECtHR is brief but clear in its reasoning that the interference was prescribed by law as the convictions were based on the Copyright Act and the Penal Code. The Court is equally brief in explaining that there was a legitimate aim. It held that the conviction pursued the legitimate aim of ‘protection of the rights of others’ and ‘prevention of crime’.

On whether the interference was necessary in a democratic society, the ECtHR’s assessment boiles down to a balance of two competing rights enshrined in the Convention and its Protocols: the right to freedom of expression (Article 10 of the Convention), including the right to receive and impart information, versus the right to protection of property (Article 1 First Protocol). It underlines that when two competing interests that are both protected by the Convention, Sweden has a wide margin of appreciation. This means that Sweden itself is given leeway in balancing the two competing interests. Furthermore, because the materials that are shared on The Pirate Bay are not given the same amount of protection that is granted to political expression and debate, the margin of appreciation is even wider. The ECtHR points out that the Swedish authorities were obligated to protect copyrights in accordance with the Swedish Copyright Act and the Convention, and that the courts advanced relevant and sufficient reasons for the conviction.

“In conclusion, having regard to all the circumstances of the present case, in particular the nature of the information contained in the shared material and the weighty reasons for the interference with the applicants’ freedom of expression, the Court finds that the interference was “necessary in a democratic society” within the meaning of Article 10 § 2 of the Convention.”

Although the Court is extensive in laying down the facts and its reasoning, it nevertheless comes to the conclusion that the application of The Pirate Bay co-founders is ‘manifestly ill-founded‘. This means that their application is declared inadmissible. Neij and Sunde Kolmisoppi have not yet lost all hope. They told TorrentFreak that “not all doors are closed yet”. I wonder what doors I am missing here.

Scarlet v. SABAM, a real victory for Internet freedoms?

A little over a week ago the European Court of Justice gave a long awaited judgement in the Scarlet v. SABAM case. It is the first ECJ case dealing with Article 15 of the E-commerce Directive, which prohibits EU Member States to impose a general obligation on Internet services providers to monitor the information transmitted by them.

SABAM, which is the Belgian copyright collection society, had sought an order requiring Scarlet, an Internet Access Provider, to bring copyright infringements by its subscribers to an end by blocking the transmission of files containing musical works through peer-to-peer software. In order to block infringing transmissions, Scarlet would have to install a filtering system scanning all electronic communications of all its subscribers passing via its services. Furthermore, Scarlet would have to pay for implementing and maintaining the system itself.

The ECJ had to answer the question whether the Copyright Directive and the Enforcement Directive, in the light of the Privacy Directive, the E-Privacy Directive, the E-commerce Directive, and Article 8 and 10 of the ECHR, permit …

“…Member States to authorise a national court, before which substantive proceedings have been brought and on the basis merely of a statutory provision stating that: ‘They [the national courts] may also issue an injunction against intermediaries whose services are used by a third party to infringe a copyright or related right’, to order an [ISP] to install, for all its customers, in abstracto and as a preventive measure, exclusively at the cost of that ISP and for an unlimited period, a system for filtering all electronic communications, both incoming and outgoing, passing via its services, in particular those involving the use of peer-to-peer software, in order to identify on its network the movement of electronic files containing a musical, cinematographic or audio-visual work in respect of which the applicant claims to hold rights, and subsequently to block the transfer of such files, either at the point at which they are requested or at which they are sent?”

To put it simple: Whether Scarlet can be required to implement and pay for a filtering system to filter out copyright infringing files?

Article 9 of the Enforcement Directive instructs Member States to ensure that interlocutory injunctions may be issued against intermediaries whose services are used by a third party to infringe an intellectual property right. Also, the E-commerce Directive does not prohibit courts to lay injunctions on intermediaries as it explicitly leaves open the possibility for a court or administrative authority to require the service provider to terminate or prevent an infringement (recital 45). Article 18 of this same directive instructs Member States to “ensure that court actions available under national law concerning information society services’ activities allow for the rapid adoption of measures, including interim measures, designed to terminate any alleged infringement and to prevent any further impairment of the interests involved.” On the basis of Article 15(1) of the E-commerce Directive, injunctions may, however, never imply a general obligation to monitor the information that is transmitted or stored. The same accounts for a general obligation to actively seek facts or circumstances indicating illegal activity.

Article 15(1) of the E-commerce Directive is thus at the centre of the issue. The ECJ finds that imposing an injunction to install a filter mechanism is in fact an obligation to actively monitor all the data relating to each of its customers (general monitoring), which is prohibited by Article 15(1) of the E-commerce Directive.

The Promusicae case taught us that the fundamental right to intellectual property, as protected by Article 17 of the EU Charter of Fundamental Rights, has to be balanced with other fundamental rights. The ECJ thus also had to touch on the compatibility of an obligation to implement a filtering system, which clearly is a manifestation of the right to property, with the ISP’s freedom to conduct a business (Article 16 of the EU Charter).

Regarding the freedom to conduct a business, the ECJ holds:

“48       […]such an injunction would result in a serious infringement of the freedom of the ISP concerned to conduct its business since it would require that ISP to install a complicated, costly, permanent computer system at its own expense, which would also be contrary to the conditions laid down in Article 3(1) of Directive 2004/48, which requires that measures to ensure the respect of intellectual-property rights should not be unnecessarily complicated or costly.

49        In those circumstances, it must be held that the injunction to install the contested filtering system is to be regarded as not respecting the requirement that a fair balance be struck between, on the one hand, the protection of the intellectual-property right enjoyed by copyright holders, and, on the other hand, that of the freedom to conduct business enjoyed by operators such as ISPs.”

The ISP, however, is not the only actor that is affected by a filtering obligation. The ECJ thus also considered the right to freedom of information and the right to the protection of personal data of Internet subscribers.

The ECJ on freedom of information:

“52      […] that injunction could potentially undermine freedom of information since that system might not distinguish adequately between unlawful content and lawful content, with the result that its introduction could lead to the blocking of lawful communications. Indeed, it is not contested that the reply to the question whether a transmission is lawful also depends on the application of statutory exceptions to copyright which vary from one Member State to another. Moreover, in some Member States certain works fall within the public domain or can be posted online free of charge by the authors concerned.”

Regarding the right to personal data, the ECJ holds:

“51      It is common ground, first, that the injunction requiring installation of the contested filtering system would involve a systematic analysis of all content and the collection and identification of users’ IP addresses from which unlawful content on the network is sent. Those addresses are protected personal data because they allow those users to be precisely identified.”

The ECJ concludes that imposing a general filtering obligation does not respect the requirement that a fair balance be struck between the right to intellectual property, on the one hand, and the freedom to conduct business, the right to protection of personal data and the freedom to receive or impart information, on the other.

However, the ECJ’s assessment of the filtering obligation in relation to the Internet user’s freedom of information and right to personal data is not as strict as its assessment of the filtering obligation in the light of the ISP’s freedom to conduct a business. The ECJ calls the filtering obligation a “serious infringement” of the ISP’s freedom to conduct a business. In contrast, regarding the right to freedom of information, the ECJ only speaks of it being potentially undermined by a filtering obligation.

Regarding the right to personal data, the ECJ seems to only focus on the fact that a filtering obligation implies that IP addresses are collected and identified. The ECJ is right that identifying an IP address is processing of personal information, but it being processing of personal data does not mean that it is absolutely forbidden. The EU Data Protection Directive gives rules on how to process personal data and does not completely forbid such processing. Furthermore, the court mentions that a filtering system involves a systematic analysis of all content sent on the network, but does not qualify it as being problematic in the light of data protection law, nor other aspects of privacy such as communication privacy. After all, privacy is more than data protection and the question of the Belgian court did not refer to Article 8 ECHR without reason.

This judgement is great news for ISP’s that are targeted by copyright owners as the ECJ holds that an obligation to install a general filtering mechanism is in conflict with Article 15(1) of the E-commerce Directive. The court furthermore finds that a fair balance is lacking when an ISP has to install and pay for a general filtering mechanism. This of course does not prevent an ISP from ‘voluntarily’ installing a filtering mechanism as a part of a deal with copyright holders. In this context, it is a pity that the ECJ did not express a clear opinion on the Internet subscriber’s right to freedom of information and the right to privacy when filtering mechanisms are installed.