(CN) - A social-networking site does not have to filter for allegedly copyright-infringing material, the European Union Court of Justice ruled Thursday.
The decision resolves a 2009 complaint against a social-networking platform owned by Netlog NV. SABAM, a Belgian management company representing authors, composers and publishers, claimed that Netlog users posting its artists' copyrighted material onto their profiles.
The company alleged that Netlog, through its users, makes that material available without SABAM's consent and without paying royalties.
It asked that Netlog cease making works from SABAM's repertoire available to users and pay a penalty of 1000 euros for each day it did not comply with the order.
Netlog responded that granting SABAM's injunction would be "tantamount to imposing on Netlog a general obligation to monitor, which is prohibited by the E-Commerce Directive," according to a summary of the case from the high court.
The Court of Justice took up the case after the Belgian judiciary asked for clarification on EU law. The statutes might preclude a national court from issuing an injunction requiring hosting service providers like Netlog to install a filtering system for information stored on its servers by users, "which applies indiscriminately to all of those users, as a preventative measure, exclusively at its expense and for an unlimited period of time," according to the high court.
In its ruling, the Court of Justice recognized that the implementation of a filtering system would require Netlog to identify, out of all the files all its users post, which files contain copyrighted works.
Netlog would then have to identify which of those files are being made available unlawfully, and then prevent files it considers to be used illegally from being made available.
"Such preventative monitoring would therefore require active observation of the files stored by users with the owner of the social network," the court said in a statement. "Accordingly, the filtering system would require that owner to carry out general monitoring of the information stored on its servers, something which is prohibited by the E-Commerce Directive."
"In circumstances such as those in the main proceedings, national authorities and courts must, in particular, strike a fair balance between the protection of the intellectual property right enjoyed by copyright holders and that of the freedom to conduct a business enjoyed by operators such as hosting service providers," the ruling states
"In the main proceedings, the injunction requiring the installation of the contested filtering system involves monitoring all or most of the information stored by the hosting service provider concerned, in the interests of those rightholders," the court stated. "Moreover, that monitoring has no limitation in time, is directed at all future infringements and is intended to protect not only existing works, but also works that have not yet been created at the time when the system was introduced."
"Accordingly, such an injunction would result in a serious infringement of the freedom of the hosting service provider to conduct its business since it would require that hosting-service provider to install a complicated, costly, permanent computer system at its own expense, which would also be contrary to the conditions laid down in [the E-Commerce Directive], which requires that measures to ensure the respect of intellectual-property rights should not be unnecessarily complicated or costly," the ruling states.
Such a system might also jeopardize the freedom of information since the filters might not adequately distinguish between unlawful and lawful content, leading to the blockage of lawful communications, the court said.
In addition, copyright laws vary from country to country in the EU, complicating the question of whether a transmission is lawful. In some European countries, certain works fall within the public domain or may be posted online free of charge, the court found.
It also said the system would also infringe on Netlog users' fundamental rights, "namely their right to protection of their personal data, and their freedom to receive or impart information, which are rights safeguarded by [the EU Charter]."
"Consequently, it must be held that, in adopting the injunction requiring the hosting service provider to install the contested filtering system, the national court concerned would not be respecting 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," the court concluded.
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