Stricking a fair balance between the right to intellectual property and the freedom to conduct business, the right to protection of personal data and the right to receive or impart information.

The Court of Justice of the European Union (“CJEU”) precluded the imposition of an injunction by a national court which requires an Internet Service Provider (“ISP”) to install a filtering system with a view to preventing the illegal download of files which would constitute an infringement of intellectual property rights.

The said decision of the CJEU originated from a dispute between Scarlet Extended S.A., namely an ISP and SABAM, a Belgian management company representing authors, composers and editors and authorising the use by third parties of their musical works vested with intellectual property rights.

Briefly, SABAM established that users of Scarlet’s services were downloading works in SABAM’s repertoire from the internet by means of peer-to-peer software without authorization and without paying royalties.

Scarlet appealed to the Brussels Court of First Instance in Belgium, which decided that Scarlet had to bring those copyright infringements to an end by installing a filtering system that would make it impossible for its customers to send or receive in any way electronic files containing a musical work in SABAM’s repertoire.

Following Scarlet appealed to the Brussels Court of Appeal, arguing that the decision of the Court of First Instance of Brussels did not comply with the European law and more specifically the provisions of: a. the E-Commerce Directive EC/2000/31 ( for the reason that a general monitoring obligation of all information transmitted through its network is imposed to ISPs and b. the protection of personal data and electronic communication privacy, given the fact the collection and identification of user’s IP addresses involves the processing of personal data.

The Brussels Court of Appeal submitted to the European Court a question referred for a preliminary ruling to what extend the natural courts have the authority to impose to ISPs the obligation to operate onerous proactive systems for an indefinite period of time, in order to monitor all communications through their network and identify the users who share electronic files containing musical, cinematographic or audio-visual work without permission.

The CJEU concluded that a measure ordering an ISP to operate a general system for filtering electronic communications as a preventive measure leads to the undertaking of a general obligation on behalf of ISPs to monitor all information transmitted through their network in order to prevent future illegal file downloading.

In addition to the above the CJEU pointed out that the said injunction jeopardizes the right of Scarlet customers to protection of their personal data through a constant and systematic analysis of all their incoming and outcoming electronic communications, their right to receive or impart information, – both of which are protected under the Charter of Fundamental Rights of the EU-, as well as the freedom of IPS’s to conduct their business.

Edited by Maria Giannakaki