| INTRODUCTION
To what extent are on-line
intermediaries responsible for third party material put on the
Internet by users of their facilities? The
Directive on certain legal aspects of electronic commerce in
the internal market, among other things, answers this
question by establishing a liability regime for on-line
intermediary activities[1]
. The set of rules contained within articles 12 to 15 of the
E-Commerce Directive clarify the liability standards that will
apply to the various on-line intermediary players as a result
of their involvement with illegal or infringing material put
on their Internet facilities by third parties. In particular,
the Directive covers three categories of on-line intermediary
functions: First, the "mere conduit activity", which includes
both the role of transmitting information (for example,
providing cables, routers, etc.) and the provision of access
to a communication network such as the Internet. Second, it
covers the activity of proxy caching, which consists of
storing on a local server copies of high demand material that
originates from remote servers[2]
. Finally, the Directive provides a liability limitation for
the provision of a server, upon which the provider rents space
for content uses, such as a Web page. Of course, an on-line
intermediary can carry out one or more of these functions.
Generally speaking, the
liability regime seems to provide a balanced solution that
prevents on-line intermediaries from being held liable without
knowledge of the existence of the illegal or infringing
content, while at the same time properly protecting
potentially aggrieved parties. However, a closer look to the
Directive shows that it leaves unsolved certain important
issues, which eventually may render meaningless the merits of
the solutions embodied by it. In particular, the E-Commerce
Directive does not establish circumstances and requirements
under which "private notices" given to host service providers
alerting them of the existence of unlawful material in their
facilities are reliable enough for on-line intermediaries to
act thereon, thus cutting access to the materials.
Furthermore, the Directive threatens Internet service
providers with damages liability if upon acquiring knowledge
of the existence of unlawful material, for example through the
receipt of notices, they do not remove immediately the alleged
unlawful material. As a result, on-line intermediaries have an
incentive to systematically take down material, without
hearing from the party whose material is removed, thus
preventing such a party from its right to evidence its lawful
use of the material. Obviously, this practice conflicts with
the right to freedom of expression and may hinder competition
on the Internet. Following a description of the Directive's
liability limitations, this article will analyze the issues
identified above. In particular, it will suggest different
approaches to address the issues mentioned above.
AN OVERVIEW OF THE
LIABILITY REGIME
The E-Commerce Directive
limits damages liability of information society service
providers when they act in one of the intermediary roles
identified by the Directive, i.e, mere conduit, caching, and
hosting[3] . Before
describing the liability standards that apply to each of these
functions, it is important to make some general comments that
apply to all three standards. First, the liability limitations
are established in a horizontal manner, so that they apply to
all kinds of illegal material provided by third parties,
including copyright, trademark, defamatory statements,
pornography, etc. Second, as regards the types of liability
covered by the Directive, it should be noted that the
liability limitations apply not only to civil but also to
criminal liability. Third, it is also important that the
liability limitations apply only to damages liability. Thus,
the Directive does not prevent injunctions from being imposed
upon on-line intermediaries. The later versions made this more
clear by moving the wording on injunctions to a separate
paragraph within each of the Articles 12-14. In particular,
the new wording emphasizes that Member States can impose
all types of injunctions upon on-line intermediaries,
instead of merely prohibitory injunctions, as previous
versions stated, and a new recital specifies that injunctions
issued by administrative authorities are covered, in addition
to those issued by courts[4]
.
Articles 12 through 15 of
the Directive
As regards the mere conduit
function, Article 12 of the Directive excludes transmission
providers from damages liability provided that they do not
modify the content transmitted except for manipulations of a
technical nature enabling the transmission of the information.
Article 13 deals with the caching function. In particular, it
establishes that information society service providers
engaging in caching will not be liable for the damages unless
they have actual knowledge either that the information at the
initial source of the transmission has been removed, that
access to it has been disabled, or that a competent authority
has ordered such removal and they fail to remove or disable
access to the information upon obtaining this knowledge.
According to Article 14, providers that store third party
content on their servers may not be held liable for damages,
unless they fail expeditiously to block access to the
information upon obtaining actual knowledge of the illegal
activity or information or upon becoming aware of facts or
circumstances from which illegal activity or information is
apparent. The latter standard is referred to as "constructive
knowledge". With the Common Position,a new paragraph to this
Article was added, according to which Member States may oblige
host service providers to inform authorities of alleged
illegal activities or content in their servers. Finally,
Article 15 stresses that a duty to monitor may not be imposed
upon online intermediaries. In other words, Member States
cannot impose upon on-line intermediaries an obligation to
monitor the information which they transmit or store, nor can
Member States require intermediaries to seek facts or
circumstances indicating illegal activity.
Despite this strong and clear
statement, surprisingly, the final version contains a recital
which appears to contradict Article 15. The new recital 48
establishes that Member States may impose upon intermediaries
a "duty of care, which can reasonably be expected from them
and which are specified by national law, in order to detect
and prevent certain types of illegal activities". Thus,
Article 15.1 prohibits to impose an obligation to monitor,
while recital 48 at the same time permits to establish a duty
to detect unlawful material. It remains to be seen how these
provisions can be reconciled.
To fully understand the
implications of recital 48, several possible consequences
following from its wording should be highlighted. First, could
the duty of care mentioned in the recital require
intermediaries to implement and operate filtering and control
mechanisms? Second, could those service providers who fail to
implement such mechanisms be held liable for failure to comply
with the mentioned duty of care? Third and more importantly,
will host service providers be held liable if they fail to
detect and remove material that, according to certain (yet
undefined) standards, they should have been able to identify?
Indeed, an aggrieved party could argue that the failure of a
host service provider to identify allegedly infringing
material was due to a negligent implementation or operation of
filtering mechanisms. Finally, as will be discussed further
below, the recital might broaden the ways by which host
service providers may be deemed to obtain the requisite
knowledge to render them liable.
Also, the new paragraph added
to each of Articles 12-14 covering injunctions provides a
possibility to order Internet service providers to terminate
or prevent an infringement. The interpretation of this
wording is left to the national legislatures and courts.
However, the possibility to issue "preventive" injunctions may
imply that injunctions could be imposed on Internet service
providers, which require them, for example, to monitor the
activities of a specific person or site that has previously
been identified as engaging in illegal acts. Along the same
lines, another new recital, also introduced with the Common
Position, permits Member States to allow national authorities
to impose "monitoring obligations in specific cases", as
opposed to monitoring obligations of a general nature[5]
.
FREEDOM OF EXPRESSION AND
FAIR COMPETITION CONCERNS VIS-A-VIS THE E-COMMERCE
DIRECTIVE
A Description Of How The
Directive's Liability Regime Might Hinder Freedom Of
Expression And Fair Competition
Generally, host service
providers may become liable for damages if they acquire actual
knowledge or become aware of unlawful activities carried out
by users of their servers. In principle, they could obtain
such knowledge or awareness from notices sent by interested
third parties alerting them of the existence of the unlawful
material. Indeed, and in light of the "no-monitoring"
provision of Article 15.1, private notices are likely to be
the most common way to obtain the required knowledge. Most
likely, Member State courts will find that this is sufficient
knowledge or awareness for the purpose of the Directive when a
provider is notified of the content residing on its servers[6]
.
To the extent that, by virtue
of Article 14, host service providers may be held liable for
damages if, upon receipt of notifications, they do not remove
such material from their servers, it is likely that host
service providers will automatically and systematically take
down the allegedly unlawful material when a notification is
received. The new recital 48 has even broadened the ways in
which host service providers may be deemed to obtain the
requisite knowledge to render them liable. If, according to
recital 48, a duty to detect unlawful material is implemented
by national legislation or found by the courts, host service
providers would apply screening technologies in observance of
that duty, and thus, possibly obtain the knowledge that will
trigger liability by monitoring their subscribers' activities.
As it is a natural tendency to avoid uncertainties,
intermediaries are likely to be extremely cautious and cut
access to web sites or remove the material they believe may be
unlawful upon a slight suspicion.
Of course, the implications
on freedom of speech are great. To begin with, one should
realize that host service providers will eliminate material
without giving the person to whom the material belongs the
possibility to protest and demonstrate that the publication
was lawful. Thus, freedom of expression and fair competition
may be severely hindered, not to mention that principles of
due process might be violated. Furthermore, the existence of
such a duty may entice host service providers to be more
discriminating in deciding to whom they will rent space on
their servers, as a result of which less well respected
parties may have trouble using the Internet as a means of
expression.
The Directive, perhaps aware
of this danger, intends to prevent it by adding the following
recital[7] :
"Whereas, in order to benefit from a limitation of liability,
the provider of an Information Society service, consisting of
the storage of information, upon obtaining actual knowledge or
awareness of illegal activities has to act expeditiously to
remove or disable access to the information concerned; whereas
the removal or disabling of access has to be undertaken in the
respect of the principle of freedom of expression and
procedures established for this purpose at a national level".
While the reference to freedom of expression is to be
welcomed, it would be naive to expect that host service
providers will not remove material that might be unlawful in
order to serve freedom of expression concerns. Clearly, it is
not the task or duty of online intermediaries to guard the
freedom of information.
A disincentive for a service
provider to take down material that is not clearly infringing
could be that the web site owner may have grounds to hold him
liable for the damages suffered as a result of the unjustified
removal of the material. However, most hosting service
providers will have included provisions in the contracts with
their customers, establishing their right to take down
material at any time, and without any responsibility deriving
from such action. Given the threat of damages liability for
failure to take material down, on the one hand, and the
absence of any risk of liability to the person whose material
is taken down on the other, the choice will naturally be to
remove the material.
Concerns about freedom of
expression and fair competition arise not only in relation to
host service providers, but also in relation to other on-line
intermediary activities. Mere conduits, for example, may face
expensive court proceedings seeking injunctions if they do not
react upon a request to block access. Thus, they too have an
incentive to systematically block access to allegedly unlawful
material, thereby preventing the person whose material is
taken down from defending himself. But of course the problem
is all the more pressing with regard to host service providers
because they will be exposed not only to injunction
proceedings, but also to damages liability if they fail to
remove the material.
All in all, it can be said
that the Directive has created a liability regime which places
upon on-line intermediaries the burden of deciding whether or
not to remove suspicious material. If they fail to block
material which eventually turns out to be unlawful, they will
lose the liability limitations and thus will be subject to
damages liability. Consequently, the legal regime established
by the Directive may force host service providers to be
very cautious and indiscriminately remove material from their
servers, even if it is extremely doubtful that it actually
violates a law or infringes a right. Needless to say, freedom
of expression would thereby unduly suffer.
In the next paragraphs we
will further illustrate why on-line intermediaries and host
service providers, in particular, are unsuited to decide
whether the alleged unlawful material should be taken down
from the Internet. We will also try to show in more detail the
consequences likely to follow from having on-line
intermediaries making these choices and thus policing the
Internet.
Reasons Why It Should Not
Be Up to On-Line Intermediaries To Decide What Should And What
Should Not Be On The Internet
Experiences taken from daily
practice show that Internet access or host service providers
receive multiple complaints about allegedly illegal material
found on or disseminated over their systems. It is foreseeable
that the number of received notices will grow significantly in
the coming years.[8]
Most of these demands to remove allegedly illegal material or
prevent access to it are through private claims and not
through court orders or other official channels. Those who
believe their rights are being infringed by material
disseminated over the Internet naturally see the ability to
make complaints to Internet service providers and to obtain
quick removal or denial of access to such material as a
convenient way of protecting their rights. At first sight,
such private mechanisms for eliminating allegedly illegal
material from the Internet would appear to be effective and
appropriate.[9]
Thus, it could be said that by directing private complaints to
on-line intermediaries who promptly act thereon, copyright
holders and other potentially aggrieved parties have found an
expeditious way to redress illegal activities.
However, this is not the end
of the story, and things are not quite so simple. While some,
indeed perhaps many, cases of clearly illegal activity exist,
many others are not so straightforward. In some cases,
complainants might conclude without any ill intent or
negligence and in good faith that their rights have been
violated, but they are merely mistaken. However, if the
complaint to a service provider leads to removal of a web
site, the party who relies upon exploitation of the web site
for his livelihood will have been unjustifiably harmed. Take,
for example, the case brought by Apple against Microsoft in
the mid-1980s alleging that Microsoft's Windows software
infringed Apple's copyright in its graphical user interface
software.[10]
Apple clearly believed, without bad faith or negligence, that
its copyrights had been infringed by Microsoft, but
eventually, after years of litigation, the court concluded
otherwise. It is interesting to contemplate what might have
been had this case not arisen in the mid-1980s, but in the
Internet age, and had Apple not sued Microsoft in court, but
rather complained to service providers disseminating
Microsoft's software. Microsoft would have been deprived of
what is likely to become the predominant distribution channel
for software products.
The last example illustrates
that cases of copyright infringement are often not at all
straightforward. Courts often struggle mightily with questions
such as the following: Who owns the copyright? Has the
duration of any copyright expired? Does the alleged infringer
have a license to publish the allegedly infringing work? What
is the scope and duration of any such license? Does the
allegedly infringing act fall within any copyright exception
or defense?[11]
Similar difficult legal and factual questions arise in cases
involving defamation, fraud, misleading advertising, unfair
competition, and the like. In short, the same legal and
factual questions that arise in resolving many off-line
disputes arise also in disputes concerning alleged on-line
activities. It would be naive to assume that complaints about
illegal activities in the Internet context will all - or even
mainly - be straightforward cases involving clearly unlawful
conduct. Surely they will be subject to the same legal and
factual intricacies and human frailties as disputes in the
analogue, off-line world. However, whereas in the physical
world one needs a court order to stop the distribution of an
information product which a court will issue only if it feels
the complaint (is likely to be) justified, in the virtual
world it will be enough to merely claim material is unlawful
to stop it from being disseminated.
Furthermore, complaints made
to Internet service providers may not only be based on a good
faith, but mistaken belief that one's rights are infringed.
Indeed, demands for removal of allegedly illegal material are
sometimes made to shut down Web sites for illegitimate
purposes, such as to hinder legitimate competition, stifle
debate, and the like. For example, Car Company X may not
especially appreciate a competitor company making a link on
its site to another web site listing Car Company X's less
impressive prices or safety test results. Car Company X may be
tempted to shut down the Web site by appealing to the host
service provider to remove the material with an assertion, for
example, that it infringes unfair competition or advertising
laws.
Apart from stifling
competition, complaints to on-line intermediaries can be used
to try to hinder public discussion or criticism. The landmark
US Netcom case of 1995 is one example. In this case, former
members of the Scientology Church, with the intention of
expressing their opinions about the Church, posted several
documents written by the Church's founder in a newsgroup.
Scientology held the copyrights to the documents and used them
as a basis to sue not only the former church members, but also
Netcom, a U.S. service provider, for having provided access to
the Internet newsgroup. The Court ruled that there can be no
duty to block access if the web site operator has a possible
fair use defence.[12]
The US fair use defence is intended, inter alia, to allow for
quotations necessary in public debate and for the purpose of
criticism. Many European copyright laws have a similar rule.
Two Dutch courts ruled, for instance, that the quotations fell
within the limits of the statutory permission to quote and
that only if it is obvious that third party unlawful activity
take place the provider may have a duty to block access[13]
. In the Dutch cases, the provider concerned had, for
idealistic reasons, refused to take down the content, but most
service providers will be inclined to take down the material,
although a copyright exemption may apply. If the provisions in
the E-Commerce Directive incite a provider to block access
upon reception of a notification even in cases of doubt, the
Church of Scientology would in similar circumstances succeed
in preventing criticism.
As the above examples show,
on-line intermediaries are continuously faced with difficult
decisions either to take down material, and therefore to grant
the claims of the complainant, or to respect the site owner's
interests, and even those of society as a whole in an open
public discourse, in keeping the material posted. Moreover,
while disputes about allegedly illegal material are often
difficult even for courts to resolve, it goes without saying
that on-line intermediaries are not at all well-equipped to
deal with such issues. In this regard, it is important to keep
three things in mind. First, Internet service providers, as
technical intermediaries, are not at all like publishers.
Unlike publishers, they do not have any say over the allegedly
illegal material, the decision to publish it, or the persons
placing such material on their systems. It is therefore
inappropriate to equate complaints made to Internet
intermediaries to complaints made, for example, to newspaper
publishers. The latter have a completely different
relationship to the allegedly illegal material and to its
source; instead of a merely technical intermediary role, the
publisher typically will have, among other things, an
employment relationship with the source of the material or a
contract to procure and publish the material, and its business
relates to content rather than to the provision of
technical facilities for the dissemination of content[14]
.
Second, Internet service
providers, as private providers of technical facilities, do
not have the skills, knowledge, or personnel necessary to
evaluate whether any particular material among the millions
(perhaps billions) of bytes flowing over their facilities is
infringing or illegal. In particular, this task may prove
virtually impossible for the small Internet service providers
that until now remain prevalent in Europe. Third, and most
importantly, Internet service providers have neither the
ability nor the obligation to take into account the myriad of
legal and public policy considerations that must be considered
by a court in deciding any case of allegedly illegal
information. They have neither the obligation nor the ability
to, for example, evaluate whether certain allegedly defamatory
material must remain open to public access in order to
preserve freedom of expression and public discourse.
Indeed, a legal regime that
threatens Internet service providers with liability based upon
"constructive knowledge" obtained from private complaints and
possibly even from monitoring would, without appropriate
limits, encourage the virtually automatic and systematic
removal by intermediaries of material from the public domain.
A legal system that not only permits, but also encourages,
on-line intermediaries to indiscriminately eliminate any
material from the Internet upon receipt of virtually any
notice from third parties will unduly threaten freedom of
expression and fair competition.
POSSIBLE SOLUTIONS TO
PRESERVE FREEDOM OF SPEECH AND COMPETITION ON THE INTERNET
When trying to reconcile the
right of freedom of expression with the legitimate interests
of copyright owners and other stakeholders, several possible
solutions can be considered. The first and absolutely
essential step to preserve freedom of speech and fair
competition on the Internet consists in interpreting narrowly
recital 48, which purports to impose a "duty of care which can
reasonably be expected ... in order to detect and prevent
certain types of illegal activities" upon host service
providers. Clearly, such duty may lead to a world in which, to
avoid liability, providers are likely to be extremely cautious
and will, upon even a slight suspicion of the material being
unlawful, cut access to web sites or remove the material. This
could, for example, lead to the extinction of the word 'sex'
in the online environment. A service provider could screen all
hosted sites for that word and automatically delete all of the
sites in which it is used, even though it is clear that not
every site which contains it will be unlawfully pornographic.
It goes without saying that the freedom of speech will be
unjustifiably hindered by such a measure. Member States should
recognize the inconsistency of a broad interpretation of
Recital 48 with the terms of Articles 14 and 15, as well as
with the fundamental social goals and legal obligations of
preserving freedom of speech and fair competition in the
Internet environment.
A second step could be to
adopt a notice and take-down regime similar to the one
included in the US Digital Millenium Copyright Act of 1998.
Alternatively, special bodies, the composition of which should
be carefully defined and the modus operandi of which
should ensure a fast and efficient decision, could also be
considered. Both possible solutions have the final goal of
defining very carefully the circumstances under which on-line
intermediaries should accede to demands to take down third
party material residing in their facilities. Let us examine
such solutions and the Directive's provisions in relation to
them.
Notice and Take-Down
Procedures Similar to Those Established by the United States
Digital Millenium Copyright Act
The United States' Digital
Millennium Copyright Act (DMCA), implemented in
article 512 of the US Copyright Act, which includes a
liability standard for host service providers similar to the
one of Article 14 of the E-Commerce Directive[15]
, tries to solve the above described problem by including an
elaborated "notice and take down procedure". Under this
procedure, a provider will escape liability if, upon receiving
a notice of claimed copyright infringement, he expeditiously
blocks access to the material concerned. These notices have to
fulfill certain formal requirements and include certain
minimal content, for imposing on an on-line intermediary a
duty to remove the allegedly unlawful material[16]
. By requiring notices with a list of specified elements, the
DMCA permits the on-line intermediary to identify the
material, thus, to a certain extent avoiding errors. The Act
also establishes to whom a notification must be directed to
trigger a duty to block access. As a result, the provider does
not have to react to any vague notification sent to any of its
employees.
In addition to the "notice
and take down procedure", the DMCA includes a "put-back
procedure" which establishes under which circumstances the
person whose material has been taken down can object and have
his material put back on the Net by the on-line intermediary[17]
. To remain immune for all claims a hosting service provider
who removes material upon notification must promptly notify
the subscriber that access to his web page has been disabled
and put the content back up upon receipt of a "counter
notification" from the web site owner. Clearly, the latter
provision may be viewed to serve the freedom of information,
as it gives the site operator an opportunity to object.
Finally, the DMCA's procedure includes a rule, according to
which the provider has to remove the material again from the
system, if the person who submitted the first notification
subsequently files an action in court seeking to restrain the
owner of the site from engaging in infringing activities. If
the intermediary fails to do so, he may be held liable for the
damages incurred subsequent to the filing of the action.[18]
In order to reduce the number of notices and counter
notices given for illegitimate reasons, the DMCA establishes
that any person who knowingly misrepresents that material is
infringing or mistakenly removed is liable for the damages
incurred as a result of a service provider acting upon such
misrepresentation[19]
.
Pros and Cons of the US
Notice and Take-Down Regime
When looking at these
regimes, the question inevitably arises whether it would be
appropriate to add similar provisions to the EU Directive or
whether, alternatively, Member States should institute similar
procedures in their national laws.
In fact, Article 14.3,
according to the new wording introduced with the Common
Position and included in the final version, leaves Member
States with the discretion to establish "notice and take down"
procedures. Clearly, the addition of this new subsection
reflects the intention of some Member States to introduce such
procedures.
Certainly there are many
positive aspects to be highlighted from the "notice and
take-down and put-back procedures" as established in the US.
But also, in evaluating whether to implement such procedures,
one should likewise realise their various shortcomings and
eventually the manner to overcome them.
Among the positive aspects of
the "notice and take-down and put-back procedures" is the fact
that the law would provide some guidelines as to the form and
contents of a notice for an on-line intermediary to act
thereon. Particularly, it will require a detailed notice
accompanied with sufficient documentation of the claim from
the person, who says that his rights have been infringed.
Demanding such formal and content requirements would probably
help to reduce unfounded notices or notices sent for improper
objectives which shut down debate or prevent fair competition.
Second, and insofar as even
notices complying with certain strict form and content
requirements can nonetheless be unfounded, or even
purposefully misleading, inclusion of a "put-back procedure",
which gives the person whose material has been taken down the
possibility to object and have the material put back on the
Net, should be carefully considered. By giving to the site
owner the opportunity to object to the take-down, the
procedure guarantees that the right to freedom of speech and
fair competition is to a certain extent taken into account[20]
. The most important feature of the 'put back up procedure',
however, is that it establishes that on-line intermediaries
are not threatened with damages liability by virtue of putting
back up the material. Such a threat can only be dealt with by
law.
As good as it may sound,
whether the US put back up procedure will serve its purpose in
practice remains to be seen. For example, at a WIPO workshop
held in Geneva in December 1999, Greg Wrenn of Yahoo estimated
that 5 to 10 percent of the notifications received by Yahoo
raises doubts as to its sincerity. Of course, to avoid
liability, Yahoo is statutorily required to block access to
the sites concerned. In Yahoo's experience, however, very
rarely do people take advantage of the statutory possibility
to object and have the removed material put back up, even in
cases where the removal is blatantly unjust. Private persons
in particular appear unaware of the possibility to object and
less inclined to send a counter notification.[21]
Thus, even if 95 percent of the notifications are justified, a
large number of people is still wrongly hampered in their
right to freedom of information and expression.
Another question raised by
the US procedures is that, if the person who claims his rights
are infringed files a court action the on-line intermediary
must remove the material from the Internet, thus rendering the
material inaccessible upon a mere claim and pending a
judicial decision. Consequently, the person who claims his
rights are infringed gets the benefit of the doubt - even if
there is a good reason to doubt whether the removal is
justified - over the person who is frustrated in expressing
his thoughts or conducting his business. Remarkably, under the
US "prior restraint doctrine" a reversed situation exists. US
courts are generally reluctant to grant preliminary
injunctions in cases where a restraining order affects the
freedom of speech. If it is considered that the notice and
take down procedures will, in many cases, replace preliminary
injunctions - in fact, with this solution, rights holders have
gained a way to obtain injunctive relief relatively quickly
and easily, and even before a judge has determined whether the
material is indeed (likely to ultimately be found to be)
infringing - one may ask whether the US Act goes too far. It
is true that in copyright cases, where the mentioned US
procedure applies, the "prior restraint doctrine" is of less
importance and injunctions are routinely issued. However, if a
similar procedure were introduced with regard to claims of
defamation or allegedly unlawful pornographic material, to
which a procedure introduced on the basis of the 'horizontal'
E-Commerce Directive's liability regulations may apply, it is
not at all inconceivable that US courts would find such a
procedure in conflict with the First Amendment[22]
.
In this context, the question
may be asked whether the obligation of Article 18 of the
Directive, which requires Member States to provide for
preliminary injunctions in order to stop cases of alleged
infringement, is merely a slip of the pen. Should an
injunction be granted even if it is unlikely that success on
the merits of the case will follow? Clearly, this would depart
from existing law in most, if not all, Member States.
Existing law contains several
safeguards intended to prevent unjust claims for preliminary
injunctions. For instance, under Spanish law, for an
interlocutory injunction to be granted for copyright
violations, certain precautions are taken to prevent filings
for unfounded injunctions. In particular, the claimant has to
show ownership of the right, immediate infringement, or
probability for it to occur, and finally, in some cases, the
court may require a deposit to cover damages if the
interlocutory court injunction in the end reversed under an
injunction procedure. Furthermore, the defendant has the right
to oppose the plaintiff's claim[23]
. Similar precautions are taken in defamation cases[24]
. What's more, one could argue that the removal by the on-line
intermediary of material upon a mere claim or pending a
judicial decision could violate fundamental rights established
by the Spanish Constitution. In particular, such practice
could go against art. 20, which lays down the right of
citizens to express their opinions by any means of diffusion
and which says that this right may not be limited by any form
of censorship. Moreover, Article 20 provides that no
publication, recording or information medium may be
confiscated without a court order.
Therefore, it is easy to see
that stake holders whose rights might be infringed on the
Internet, with the new system established by the Directive,
will have a smoother path to follow to obtain the removal of
the alleged unlawful material than using the traditional
procedures. Thus, one can expect the expanded use of private
notices to Internet service providers, which are likely to in
many cases replace preliminary court injunctions.
Unfortunately, by doing so, legal warranties embodied in
national intellectual property and procedural laws that ensure
the right to oppose a claim are being circumvented.
In light of the freedom of
information and expression, one way to improve the procedures
introduced in the US could be to oblige the intermediary to
put back up the content if the web site operator objects and
only to require the service provider to block access again
after a court ruling, not pending one. This would
return the final decision to the courts, who are naturally the
best suited to take into account the myriad of legal and
public policy considerations that must be considered when
deciding any case of allegedly illegal or infringing material.
Another issue that should be
considered by the European legislator is the liability
standard that will apply to those who send notices to on-line
intermediaries which lead to an unjustified removal of
material. The DMCA imposes liability upon the misleading
notifier when there is misrepresentation, this is to say, an
intentional false notification. Within the E-Commerce
Directive there are no provisions dealing with this issue.
Accordingly, and absent specific provisions, national
liability laws will apply to this situation. To the extent
that, generally speaking, most liability laws are based on
fault, if courts find that the notice leading to an improper
take-down was sent to the intermediary imprudently or
purposefully knowing of its falseness, courts will hold the
misleading notifier liable for damages. Conversely, if fault
is not found, the person who issued a false notification will
not be held liable, which is a result similar to that of the
DMCA.
Having said this, one may
question whether the with-fault liability standard is
appropriate in this situation. In particular, if one views a
notice and take down procedure as an alternative or equivalent
to the provision of injunctive relief, this question arises.
Generally, a person who was awarded injunctive relief which in
the end is judged to be unjustified will have to bear the
consequences and compensate for the damages that his counter
party suffered as a result of the court order. For example,
under both German and Spanish Law, if a person files for an
injunction, obtains and enforces it, and it is subsequently
reversed on appeal, this person will be liable for any damages
incurred by the defendant as a result of enforcing the
injunction no matter whether they were incurred in fault. In
other words, a rule of objective, no-fault liability applies.
Of course, if the relief is obtained by issuing a private
notice and if the material taken down later proves to have
been non-infringing, the statutes that impose objective
liability on those who enforce injunctions will not apply
because the statute has to do only with court-imposed
injunctions. To the extent that the person who files for a
court injunction which later is reversed is always responsible
for damages, it clearly discourages those who do not have a
"strong case", thus diminishing cases filed without real legal
basis. If the latter result is regarded as positive, perhaps
it should be considered to enact a rule matching the liability
standard that applies to court injunctions to unjustified
private notices given to on-line intermediaries.
Alternative Solution: The
Creation of Special Bodies
One of the drawbacks of the
solutions proposed above is that aggrieved parties may lose a
fast and cheap means of redress, for example, if content
should be put back up upon reception of a counter notification
until a court decides it is indeed unlawful.
An alternative solution,
previously proposed by one of the authors of this article,
which might address such problems and at the same time foster
freedom of information interests, would be to establish a
"special body" to which all complaints about the distribution
of unlawful material over the Internet should be directed.
This body, the composition of which should be carefully
defined, would have to obtain and verify certain information
concerning allegedly illegal or infringing material and judge
whether a claim of infringement should lead to a duty to block
access[25] . If
after considering all circumstances, the special body decides
that the claim is justified, it would require the on-line
intermediary to take down the information. Also, the
notifications should follow certain formal requirements. The
creation and operation of this body could be statutorily
regulated or privately based. Indeed, Article 16 of the
Directive could be read to encourage such self-regulatory
approaches[26] .
In fact, a similar system
based on an obligation to remove material upon notification by
a special body has been established by way of self-regulation
in several European countries where allegations of child
pornography are concerned. The British Internet Watch
Foundation (IWF), for instance, serves as such a special body.
If a person finds illegal pornography online, he can complain
with the IWF's public hotline. The IWF verifies the complaint
in accordance with police guidelines, and if it feels it is
justified, subsequently sends a take down notice to the
intermediary concerned who will react upon the request. In
Argentina a similar procedure is envisaged with regard to
claims of copyright infringements[27]
.
In light of the freedom of
information, an advantage of such a solution, especially as
opposed to the absolute lack of regulation, is that
unjustified notifications would be filtered out by the special
body, and thus would not lead to access being blocked. It will
not be up to the intermediary to decide what should be or not
be on the Internet, but up to a specially designed body, which
would provide more warranties in respect to freedom of speech.
Finally, this body could react and come to decisions much
faster than courts often do. Moreover, even if in many Member
States injunctions can be obtained within a matter of days, it
would be much cheaper to obtain redress though a special body
than by bringing an action in court. A drawback of the
proposed procedure could still be that one's right to freedom
of expression will be hindered before a magistrate has
determined whether the claim is justified.[28]
THE DIRECTIVE'S POSITION
VIS-A-VIS THE SUGGESTED SOLUTIONS
The E-Commerce Directive does
not really elucidate on each of these solutions but merely
contains vague references to them. In particular, the
Directive appears to take two possible approaches: first, it
gives Member States the possibility to enact by law "notice
and take-down procedures"; second, it promotes codes of
conduct and private solutions.
The self-regulatory solution
is included in Article 16 of the Directive, which establishes
that "Member States and the Commission shall encourage: (a)
the drawing-up of codes of conduct at Community level, by
trade, professional and consumer associations or
organizations, designed to contribute to the proper
implementation of Articles 5 to 15".
The adoption by Member States
of a statutory notice and take-down procedure, on the other
hand, is contemplated in Article 14 when dealing with the
liability standard for host service providers. In particular,
Article 14 establishes that the liability limitation does not
affect "the possibility for Member States to establish
procedures governing the removal or disabling of access to
information". The new recital 46 adds that this "has to
be undertaken in the respect of the principle of freedom of
expression and procedures established for this purpose at a
national level".
The Directive's approach may
create several problems. First, insofar as it does not provide
guidelines as to how these procedures should be designed, they
are likely to differ from country to country . This will
clearly affect the goal of harmonization. Some countries will
have statutory notice and take down procedures in their
national laws, with or without a "put back procedure". Others
might by way statute create special bodies designated to
"filter" improper notices. Finally, some Member States will
leave it to the interested parties to design some procedure by
way of self-regulation. The result could be a that a great
variety of "procedures" will exist.
One very important issue in
implementing by Member States a statutory "notice and
take-down regime would be the link of such regimes with
Article 14.1 of the Directive. In other words, will Article
14.1 still apply to host service providers if they do not
react to any notification except to those issued by the
designated special body or received through a statutory notice
and take down procedure - i.e., will intermediaries be assumed
to have obtained the required knowledge or awareness and
become liable if they do not block access, upon receipt of a
notification that does not fulfill statutory requirements or
does not come from a special body?
Obviously, if this were the
case, then, implementation of some special body or notice and
take-down procedure either by way of self-regulation or
statute will not discourage host service providers from
indiscriminately removing material insofar as the lack of
doing so would still entail liability. Thus, the positive
effects on preserving freedom of expression brought by the
implementation of such regimes would be diluted. The parties
involved in a self-regulatory procedure will typically take it
upon themselves not to bring an action against a provider
respecting these procedures, but an intermediary may still
fear liability from third parties not bound by the code of
conduct and may therefore act upon notifications that were not
received though the established channels. This is all the
truer, if the possibility opened by recital 48 were used and
an obligation to detect and prevent illegal third party
activities were inserted in national law.
CONCLUSIONS
Whereas the liability
standards in the E-Commerce Directive seem to respect the
interests of on-line intermediaries while at the same time
properly protecting copyright owners and other potentially
aggrieved parties, they have disregarded the right to freedom
of speech and fair competition on the Internet.
By threatening Internet
service providers with damages liability if upon acquiring
knowledge of the existence of unlawful material they do not
remove immediately the allegedly unlawful material, host
service providers are likely systematically to take down any
accused material, without hearing from the party whose
material is removed. What if such material were perfectly
lawful? What if the person who alerted the host service
provider wanted to rid itself of a competitor by shutting down
its business? What if a sect wanted to avoid criticism by
contacting a provider and alleging defamatory statements? In
all these cases, the providers will be inclined to act upon
such claims and block access, even where blatantly
unjustified, thus threatening freedom of speech and fair
competition. Furthermore, as the Internet becomes the
predominant means by which information is disseminated, and
private notices addressed to Internet service providers will
effectively replace court proceedings, this issue will become
more and more acute.
Indeed, serious questions
arise as to the constitutionality of such laws that permit
(indeed encourage) the elimination of information from the
public domain without proper consideration of the consequences
for freedom of expression. Apart from their validity under
Member State constitutions, one can doubt the consistency of
Internet liability regimes such as those evolving in Europe
with Article 10 of the European Convention on Human Rights.
Even though the E-commerce
Directive virtually turned a blind eye to this issue, there is
still hope that in implementing the Directive, Member States
will take care of the problems sketched above, either by
implementing appropriate procedures on notice, take-down and
put-back, or by establishing special bodies that ensure
respect for freedom of expression and fair competition. |
[1]
-The Directive has made its way through the legislative
process, namely the co-decision procedure, which requires the
approval of the Directive by both the European Parliament and
the Council of Ministers. The European Parliament adopted its
first reading opinion in February 1999, and the European
Commission issued an Amended Proposal in August 1999. On
February 28, 2000, the internal market Council reached a
Common position of the Council with a view to the adoption of
a Directive on electronic commerce. On May 4, 2000, the
European Parliament approved of the text of the Common
Position and a final version is expected to be published
shortly. The Common Position, the text of which will not alter
in the final version, is available at
http://europa.eu.int/comm/internal_market/en/media/
eleccomm/index.htm. Return to Text
[2]
- In particular, under the caching function, the Directive
refers to the so-called "proxy caching technique". This
technique consists of storing in local servers copies of high
demand material that originates on remote servers with the
ultimate purpose of speeding the access time to Web-sites.
Indeed, by using this technique, when an end-user requires
certain material from a particular Web-site, the document is
transmitted from the copy stored in the local server instead
of from the source computer. As a result, the data has less
distance and time to travel and therefore places less of a
burden on the Internet infrastructure as a whole. Given
currently available bandwidth, the Internet would cease to
function properly without such caching. Return to
Text
[3]
- For an analyses of upcoming and existing legislation on
online intermediary liability in Europe and the United States,
see: KOELMAN, K.J., Online Intermediary Liability, in:
HUGENHOLTZ, P.B.
(ed.),
Copyright and Electronic Commerce, The
Hague/London/Boston: Kluwer 2000, p. 7-58, KOHLER, C.;
BURMEISTER, K., Copyright Liability on the Internet Today
in Europe (Germany, France, Italy and the E.U.), European
Intellectual Property Review, Vol. 20, Issue, 10, 1999, p.
485-499. For a comparison between the European Proposal and
the United States Digital Millennium Copyright Act, see:
JULIA-BARCELO, R., On-Line Intermediary Liability Issues:
Comparing EU And US Legal Frameworks, European
Intellectual Property Review, Vol. 21, Issue 4, 2000, p.
106-119. Return to Text
[4]
- The Common Position has also added a recital which makes
clear the ability of Member States to impose injunctions. In
particular, the recital says as follows: "Whereas the
limitations of the liability of intermediary service providers
established in this Directive do not affect the possibility of
injunctions of different kinds; whereas such injunctions can
in particular consist of orders by courts or administrative
authorities requiring the termination or prevention of any
infringement, including the removal of illegal information or
the disabling of access to it." Return to
Text
[5]
- Recital 47. Return to Text
[6]
The Court of First Instance De Hague, for example, found that
fault on the part of the provider may be found if he is
notified of unlawful third part content residing on his
servers. Court of First Instance De Hague 9 June 1999 (Scientology
vs. XS4all), Informatierecht/AMI 1999, p. 112. Return
to Text
[7]
- Recital 46. Return to Text
[8]
See,e.g., the account of the 'Copyright Control Services',
which issued over 3400 take-down notices in one year on behalf
of the joint pro-audio software producers. The account is
available as an Annex with BORTLOFF, N. & HENDERSON, J.,
Notice and Take-Down Agreements in Europe (1999), WIPO
Document OSP/LIA/3, available at:
http://www.wipo.int/eng/meetings/1999/osp/doc/
osp_lia3.doc Return to Text
[9]
- For example, it would seem appropriate for owners of the
copyright in computer programs to obtain quick removal by a
host service provider of infringing programs available on
"Warez" sites residing on one of its servers. Return to
Text
[10] See on these cases HAYES, D.L., Apple v.
Microsoft Under a Microscope (1992), available at
http://www.fenwick.com/pub/
apple_v_microsoft_microscope.htm. Return to
Text
[11] - SKELTON, T., Internet Copyright Infringement
and Service Providers: The Case for a Negotiated Rulemaking
Alternative, San Diego Law Review, Vol. 35, 1998, p.
219-340. Return to Text
[12] The Court held: "Where a BBS operator cannot
reasonably verify a claim of infringement, either because of a
possible fair use defence, the lack of copyright notices on
the copies, or the copyright holder's failure to provide the
necessary documentation to show that there is a likely
infringement, the operator's lack of knowledge will be found
reasonable and there will be no liability for contributory
infringement for allowing continued distribution of the works
on its systems. [...] [T]he First amendment argument is merely
a consideration in the fair use argument." Religious
Technology Center vs. Netcom Online Communication Services,
907 F. Supp. 1361 (N.D. Cal. 1995). Return to
Text
[13] - President of the Court The Hague, 12 March 1996,
Informatierecht/AMI 1996-5, p. 96 and Court of First Instance
The Hague, 9 June 1999 (Scientology vs. XS4all),
Informatierecht/AMI 1999, p. 112. Return to
Text
[14] - See: Global Internet Liberty Campaign Principles,
Regardless of Frontiers,
http://www.gilc.report,nl/speech/report. Return to
Text
[15] - Article 512 ( c)1) of the US Copyright Act
provides that a hosting service provider who expeditiously
blocks access to material if he receives a notification of a
rights holder claiming that the content concerned infringes
his copyrights, he will avoid liability. Return to
Text
[16] - This procedure is included in Section 512 ( c)
(2) and (3). Return to Text
[17] - The procedure is described in Section 512 (g) (2)
and (3). Return to Text
[18] - Section 512 (g) (2) (c) of the US Copyright Act.
Return to Text
[19] - Section 512(f) of the US Copyright Act. Return
to Text
[20] - BAND, J., The Superhighway to Jericho: Good
Samaritan Laws, Journal of Internet Law, August 1999, p.
6-12; SIEBER, U., Responsibility of Internet Providers- A
Comparative Legal Study With Recommendations for Future Legal
Policy, Computer Law & Security Report, Vol. 15, n 5,
1999, p. 291-310. Return to Text
[21] -A paper presented by Wrenn at the meeting in
Geneva is available at
http://www.wipo.int/eng/meetings/1999/osp/pdf/
osp_lia2.pdf. OKTAY, B. & WRENN, G., A Look Back at
the Notice and Take Down Provisions of the US Digital
Millennium Copyright Act One Year After Enactment (1999),
WIPO Document OSP/LIA/2. Return to Text
[22] - See extensively on the prior restraint doctrine
LEMLEY, M. & VOLOKH, E., Freedom of Speech and Injunctions
in Intellectual Property Cases (1998),
http://www.law.ucla.edu/faculty/volokh/copyinj.htm
(arguing that the prior restraint doctrine should be of equal
importance in cases of alleged copyright infringement).
Return to Text
[23] - See Articles 133 till 138 of the Spanish Act on
Intellectual Property. Return to Text
[24] - Article 1428 of the Spanish Procedural Code
contains the general rules regarding interlocutory
injunctions. Return to Text
[25] - JULIA-BARCELO, R., On-Line Intermediary
Liability Issues: Comparing EU And US Legal Frameworks,
European Intellectual Property Review, Vol. 21, Issue 4, p.
1-18. Return to Text
[26] - Article 16 reads as follows: "Member
States and the Commission shall encourage: (a) the drawing-up
of codes of conduct at Community level, by trade, professional
and consumer associations or organisations, designed to
contribute to the proper implementation of Articles 5 to 15".
Return to Text
[27] - BORTLOFF, B. & HENDERSON, J., supra
note 8, p. 19-24. Return to
Text
[28] - Hugenholtz, for example, feels content should
only be taken down after a judicial decision, not pending one.
See HUGENHOLTZ, P.B.,
''Het
Internet: het auteursrecht voorbij?', (1998) 128
Handelingen NVJ, p. 230-231. Indeed, it would appear that
in some cases experience of similar special bodies is not
satisfactory. For example, in Australia a Broadcasting
Services Amendment Act was passed which empowers the
Australian Broadcasting Authority (ABA) to monitor for
offensive material on the Internet, and upon detection of
unlawful material, to issue notices to on-line intermediaries
who are then obliged to remove the material. In this case,
according to free speech groups, the law lacks objective
evaluation criteria leaving to the ABA with too wide
discretionary powers on content rating.
|
