In 2007 SABAM enjoyed a brief victory when a decision went their way, but when the mandated Audible Magic fingerprinting system did not perform to expectations, Scarlet was unable to comply with the court order. That order was subsequently reversed and the case went to the Brussels Court of Appeal and then to the European Court Of Justice for a definitive decision.

That ruling is now in and it’s bad news for SABAM but great news for Scarlet, its customers, and privacy advocates everywhere.

The Court ruled that issuing an order mandating the use of a filtering system where all subscriber communications are routinely monitored for infringements, not only on currently protected works but also those in the future, would be disproportionate and fraught with difficulty.

Scarlet would be required to install an expensive and complex computer system, which would run contrary to an EU Directive stating that measures to protect copyright may not be unnecessarily complicated or costly, the Court notes.

The implementation of such a filter would also be contrary to the requirement that an appropriate balance be found between the protection of intellectual property rights and the entrepreneurial freedom Scarlet is entitled to enjoy.

For privacy advocates the rights of Scarlet’s subscribers are of paramount importance in the case, and the Court did not disappoint in protecting them. The ruling clearly states that a proactive filter would violate their fundamental rights, “….namely their right to protection of personal information and their freedom to receive and impart information.”

Perhaps most fundamentally, though, the censoring system proposed by SABAM simply would not work.

The Court states that the filter would restrict freedom of information since it would be incapable of adequately distinguishing between legal and illegal content. The filter would be ineffective when trying to deal with geographic variations on exceptions to copyright, fair use, works residing in the public domain or indeed their creators simply authorizing distribution.

The unacceptable end result: blocking perfectly legal communications in error.

The ruling from the European Court of Justice arrives at many of the same conclusions first drawn by Advocate General Cruz Villalón, and then Prof. Cedric Manara in his paper investigating the potential negative consequences of proactive filtering.

Source: European Court: ISPs Can’t Spy on Pirating Customers

In this respect Belgian group Sabam is one of the most aggressive of its kind. Earlier this year it was revealed that they even collect money for artists that don’t exist.

Today Sabam is making the headlines again, and this time they want to see money from Internet providers (pdf). The music group is claiming 3.4 percent of Internet subscriber fees as compensation for the rampant piracy that they enable through their networks.

Sabam base their claim on a provision in the Copyright Act of 1994, which states that authors should be paid for any “public broadcast” of a song. According to Sabam, downloads and streams on the Internet are such public broadcasts, and they are therefore entitled to proper compensation. This 3.4 percent share is the same amount as the copyright fees on cable television.

But even in the event they begin to receive payments, Sabam stresses that any compensation would by no means legalize piracy. The license fee is only meant to legitimize the ISPs part in transferring these unauthorized files.

The Belgian Internet providers, who are also involved in a longstanding legal battle with Sabam over a network-broad piracy filter, believe the demands of the music rights group make little sense.

“It’s their interpretation of the law, but that is not legally justified,” Belgacom spokesman Jan Margot told De Standaard in a response.

IT lawyer Matthias Dobbelaere agrees that Sabam’s interpretation might be a bit far-fetched: “I don’t think such a broad interpretation of copyright law will hold up,” he noted.

The decision of the music rights group to claim a share of subscriber fees comes after they were unable to reach a workable solution in direct talks with ISPs. The ISPs say they would rather focus on offering legal alternatives than quibble over piracy, a point also noted by Minister of Economy Vincent Van Quickenborne.

“The timing is unfortunate, just as Belgacom and others come to the market with a range of legal streaming services,” a spokesman for the Minister said, adding that his department would look into the legal issues.

Aside from the question of whether the law provides for such an Internet licensing fee, the 3.4 percent figure seems unfair as only a minority of the Internet users transfer unauthorized music.

The plan would mainly hurt legitimate consumers who will have to pay more for their Internet access. Perhaps even much more, as the movie, book, software, gaming, photography and other industries will also claim their share of the booty.

Source: Music Rights Group Bills Internet Providers For Piracy ‘Licence’

The case involves the Belgian music rights group SABAM and Internet service provider Scarlet. The pair have been locking horns for some time, with the former demanding that the latter install filtering devices on its network to monitor customer communications and stop them if they attempt to send or receive copyrighted music.

In 2007 SABAM initially won their case, but the mandated Audible Magic fingerprinting system did not perform which meant that Scarlet could not comply with the court order. The court reversed its decision and the case went to the Brussels Court of Appeal. The case is now awaiting a ruling from the European Court Of Justice.

In advance of the ECJ decision, intellectual property expert Prof. Cedric Manara has published an enlightening paper that investigates the potential consequences of implementing such a draconian filtering system.

In his paper Manara argues that such a system would be illegal, since communications of all Scarlet subscribers would have to be spied on in order to work out what information they are sending or receiving. Furthermore, this spying would have to be carried out by a private anti-piracy company, one which would have to be given authority to check all customer traffic for apparent wrong-doing.

“Indeed, to be able to seek out all infringements of copyright, one would have to screen every electronic communication,” writes Manara, adding that SABAM is seeking to shift the costs of doing so to intermediaries, an act he describes as “disproportionate”.

Manara notes that the legal concerns are numerous. Article 15 of the Electronic Commerce Directive states that providers may not be subject to “a general obligation to monitor the information which they transmit or store, nor a general obligation actively to seek facts or circumstances indicating illegal activity.” Simply put, providers are already forbidden by law to install a filtering system of the nature demanded by SABAM.

One of the most serious drawbacks of this kind of filtering is the effect it can have on legitimate activity. SABAM’s list of musical ‘fingerprints’ is non-negotiable and would block the transfer of any material matching them, potentially affecting legitimate parties.

“With such a measure aimed at filtering and blocking everything listed in the collective management society comprehensive way possible, one can imagine a video whose creator or producer wishes to put online; it would be blocked as soon as it was recognized by the access provider leading also to unsolvable conflicts of interest between the artists and producers themselves, both having distinct rights over the same works,” writes Manara.

And what happens when Internet subscribers or indeed copyright holders want to put some of their legally purchased or indeed personally created music into “the cloud”? The filtering system is nowhere near ‘smart’ enough to work out the legality of that and would simply block the transaction. “Fair Use” does not exist in the world of copyright filtering.

“Thus it can be seen that the proposed measure may lead to paradoxical results with respect to copyright, forbidding certain actions in the name of the copyright holder himself or herself, or authorized person,” Manara adds.

As previously noted, the Audible Magic fingerprinting system has already failed to perform, which creates what Manara describes as a “double jeopardy” situation for service providers.

An order which requires an ISP, in this case Scarlet, to block infringements or face punishment would be unfair, not least because it would be forced to operate a technical solution developed and selected by third parties. Not only would the ISP have to pay for it, but would also be found liable when it inevitably failed to perform 100% of the time.

“To make [the ISP] liable for the fact that an effective system does not exist goes against the principle of lex cogit ad non impossibilia,” writes Manara. In other words, the law does not contemplate the impossible.

But the problems don’t stop there. The notion that an ISP is a “mere conduit” of information is torn apart if a court orders the provider to start spying on and interfering with subscriber traffic.

Furthermore, as previously pointed out by Advocate General Cruz Villalón in his advice on the case, the effect of a filtering order would extend outside Scarlet’s customer base to subscribers of other ISPs, since Scarlet customers may very well be communicating with them on the Internet.

“Should they be warned that these blockings have taken place, and how? Do they have recourse against their contractual counterpart, the latter having proceeded to block because of a legal order?” the paper questions.

“The contemplated measures are so general that they would conflict with many other legal rules, let alone endanger some fundamental rights,” says Manara, adding in conclusion that they are excessive and, most importantly, will not be effective.

Block the Filtering! A Critical Approach to the SABAM Cases can be downloaded here (pdf)

Source: European Court Set To Rule On Crucial Internet Filtering Case

SABAM hoped that through aggressive legal action, funded by its paymasters in the international music industry, that it could force Scarlet to install filtering devices in its network to monitor customer communications and stop them if they attempt to send or receive copyrighted music.

In 2007 they succeeded, with the Brussels Court ruling that Scarlet should install the industry-approved Audible Magic music fingerprinting system. The ISP objected, saying that by spying on its customers it would be acting illegally. Adding insult to injury, Audible Magic did not perform meaning that Scarlet could not comply with the court order to stop all infringement with the tools it had been given.

The court reversed its decision and the case went to the Brussels Court of Appeal which immediately handed it over to the European Court Of Justice. The outcome would be crucial, since it would indicate whether ISPs could be held responsible for subscriber behavior and be forced to block or introduce filters.

In the last 24 hours, an advocate general of the European Court of Justice has handed down his advice in the case.

Advocate General Cruz Villalón said that “the installation of that filtering and blocking system is a restriction on the right to respect for the privacy of communications and the right to protection of personal data, both of which are rights protected under the Charter of Fundamental Rights.

“By the same token, the deployment of such a system would restrict freedom of information, which is also protected by the Charter of Fundamental Rights.”

Villalón said that the rights within the Charter can be restricted, “on condition, inter alia, that any such restriction is ‘in accordance with the law’” and if it were “adopted on a national legal basis which was accessible, clear and predictable.”

Villalón also expressed concern that decisions made by the filter would be made without judicial oversight.

The court order would apply “…in abstracto and as a preventive measure, which means that a finding would not first have been made that there had been an actual infringement of an intellectual property right or even that an imminent infringement was likely.”

Furthermore, Villalón said that a pro-filtering ruling would not only affect Scarlet users in Belgium but those contracted to other ISPs in different countries, since Scarlet customers may very well be communicating with them on the Internet

Taking the above into consideration, Advocate General Cruz Villalón ruled that the installation of this kind of blocking and filtering systems would amount to a restriction on the right to privacy and the right to protection of personal data, both of which are rights protected under the Charter of Fundamental Rights.

“By the same token,” adds Villalón, “the deployment of such a system would restrict freedom of information, which is also protected by the Charter of Fundamental Rights.”

The European Court of Justice are not obliged to act on the advice given by Advocate General Villalón but his opinion will add significant weighting to the decision process.

Court of Justice Release (.pdf)

Source: ISP Cannot Be Forced To Block Copyright Infringing Files

They target schools and kids’ community centers, charge charities for the singing of Christmas carols without a license, and even crash weddings if they have to.

While these copyright collectors are very strict in forcing their rules onto others, they often fail to live up to their own standards. This attitude was brilliantly exposed by the Belgian TV-show Basta who exposed local music royalty collecting agency SABAM for charging people to pay non-existent artists.

This week SABAM made the headlines once again, this time claiming money from truck drivers who listen to music in their cabs. Since a truck’s cab is a place of work the drivers are obliged to pay royalty fees, they argue. Those are simply the rules according to the copyright police, but not everyone agrees.

“It’s utter nonsense,” said Maggie De Block, member of the Belgian Parliament in a response to the claim. “The truck drivers don’t need the radio so much for playing music, but for their safety. So it is illogical that they should pay for it.”

Minister Vincent Van Quickenborne is not backing the theory of the copyright police either. He said that listening to radio is essential for truckers and noted that above all, a truck’s cab is an intimate space.

Angered by the responses from these politicians, SABAM said that they have the right to claim money from anyone who listens to music while working. The copyright collectors refer to an agreement they have with Minister Van Quickenborne which allows them to charge anyone, anytime. Whether they are in an office or a truck cab makes no difference, they say.

The safety argument doesn’t impress SABAM either, as they claim truck drivers still profit from listening to ‘free’ music when the radio is on.

Although SABAM might be right while following the letter of the law, the above example and numerous others where small businesses or non-profits have been hunted down in the past do not help them to maintain a good public image. We also wonder if the artists are very happy with such a strict copyright regime.

But then again, someone has to pay for the luxurious furniture at the SABAM offices, and the generous salaries these copyright crusaders enjoy. Piggybacking on the creations of musicians is big business after all.

Source: Copyright Police Want Truck Drivers To Have Licensed Cab Music

This type of behavior recently caught the eye of Basta, an investigative and satirical TV show in Belgium. They had received complaints about SABAM, the Belgian association of authors, composers and publishers, so they decided to have a closer look. The results were both hilarious and extremely worrying.

The Basta show begins with the team driving along in a car. They had picked up a hitchhiker who was listening, along with the rest of the car’s occupants, to the radio. Worried that they might owe SABAM some money, Basta phones them and asks. SABAM explained that if there were less than 5 people present that could be counted as part of a family circle. No charge.

Next a pair from the Basta crew are sitting on a train and one their cellphones starts ringing – with pop music as the ringtone. Oh oh, this could mean trouble. With 9 people in the same carriage SABAM could be very interested in this. Another panicked call to SABAM reveals that in this instance, since the ringtone was already paid for, no royalties need to be paid. Another very lucky escape.

But these are just a couple of outrageous situations, even by SABAM standards. Other, more common situations had been raising concern among the public and Basta viewers. One email to the show described how SABAM showed up at a dorm party and demanded 30 euros. Another outlined a situation where a business owner was sued because a TV playing in his private kitchen could be heard by the public in his shop.

So Basta decided to have a little fun with SABAM, to see how far the rabbit hole went.

First they created a very nice flyer advertising a party called “Where is Everyone?” displaying a tagline of “DON’T BE THERE!” along with a date for this great event. After setting up a single disco light in their chosen location and hiding in the trunk of a car to monitor the venue, then came the wait. Would the SABAM music police turn up for money? Of course they would.

Disappointed at the apparent emptiness of the party, SABAM’s inspector got back in his car and drove away but he was clearly worried that some money might be getting away, so he returned a short while later and called the number on the flyer, which of course belongs to one of the Basta crew. The call was of no help so no wiser as to what is going on, he tore the event poster from the wall and left.

After dark he came back yet again, this time looking at an empty room with a single disco light strobing in silence. Confused and asking himself “Where is everyone?” he left for the final time.

But the Basta team hadn’t finished yet. On its website SABAM has a price list which shows how much it charges for venues of different sizes. The lowest price range is for rooms measuring from 1 to 100 square meters. So, after carefully measuring out an area of 0.99 square meters – conveniently underneath several balconies so more people could attend in the vertical space – they notified SABAM of the event.

The inspector turned up and after identifying the organizer of the party, started to discuss how much they would have to pay for their 0.99 square meter party. The answer, of course, should be nothing, but the SABAM inspector insisted that they know “very well” that 1-100 square meters actually means 0-100 square meters.

At this point the SABAM guy pulled out his invoice and charged a fee of 82 euros. “I’ve worked at SABAM for 26 years and i’ve never seen this before,” he said. But Basta still wanted to get to the bottom of another accusation – that SABAM take money from the public for artists that they don’t represent.

Making a telephone call to SABAM from a public toilet, a Basta team member looked at the manufacturer of a hand dryer and explained that Kimberly Clark would be performing at an upcoming event. That would cost 134 euros minimum said SABAM.

Next the playlist. What if Kimberly Clark sang songs not covered by SABAM? Titles such as ‘Hot Breeze’, ‘Show Me Your Hands’, ‘I Wanna Blow You Dry’, ‘I’m Not a Singer I Am a Machine’ and the ever-timeless, ‘We Fooled You’, for example.

Five days later the answer came from SABAM. All of the songs were “100% protected” and so Basta must pay 127.07 euros.

Concerned that this might be a one-off mistake, the Basta team tried again, this time taking brand names of products from the supermarket including Suzi Wan, the name of a Chinese food wok kit, Mister Cocktail and the Party Mix, which is a hybrid of a drink and some party food, and Ken Wood, the food mixer.

They got bills from SABAM for these ‘artists’ totalling more than 540 euros.

Clearly, since SABAM are collecting money for these ‘artists’, they should get the money they are entitled to. So with their wok kit, food mixer, drink and party food in a box, Basta headed off to SABAM headquarters to sign them up for payments. Of course, these products weren’t allowed to be artists.

So why on earth are SABAM taking money on their behalf? Answer: Because SABAM don’t check when they collect money from people, they just take it. SABAM repaid the 540 euros.

While the Basta team have deliberately portrayed SABAM’s business as a complete farce, which appears to have been particularly easy, by the end of the TV show (which is in Dutch by the way, but don’t let that put you off now you know the outline, it’s hilarious) one can’t help feeling pretty angry. While SABAM staff are simply doing their job, the system is ridiculously one-sided and is often backed up by legal action.

We often hear horror stories about these collection societies, now you can see one operating first hand. The TV show can be found here, enjoy.

Source: Music Royalty Society Collects Money For Fake Artists, Bathroom Equipment and Food

Through legal action the music industry outfit hopes to force the Internet provider to install a filtering mechanism on its network, so it can block the transfers of copyrighted works on file-sharing networks. In 2007, SABAM scored a victory as the court ruled that the ISP should stop illegal file-sharing using Audible Magic, a system that was recommended by the music industry.

This verdict was controversial for several reasons. Firstly, the ISP believed that it would be breaking the law when it started spying on its customers. Managing director Gert Post commented at the time: “This measure is nothing else than playing Big Brother on the Internet. If we don’t challenge it today, we leave the door open to permanent, and invisible and illegal, checks of personal data.”

Privacy was not the most urgent problem though, as implementing the filtering system also proved quite problematic. It turned out that the recommended ‘Audible Magic’ simply didn’t work and neither did any of the alternative filtering systems. The ISP could not comply with the verdict even if it wanted to.

A lawyer for SABAM later admitted that they had misled the court over the effectiveness of Audible Magic, which prompted the judge in the case to reverse the ruling. The ISP could continue without having to take measures against illicit file-sharers until the appeal was heard.

Last week the Brussels Court of Appeal started on the case. But, instead of looking into the content of the dispute, it was referred to The European Court Of Justice which will look into some of the fundamental questions posed in the case.

In Europe, this is a landmark case that will define whether or not ISPs are responsible for copyright infringements committed by customers. In recent years the entertainment industry has continuously lobbied for copyright filters and the views of the European Court Of Justice will be pivotal in this regard.

Source: European Court Of Justice Reviews P2P Filtering Case

With all this dedication one would expect that such groups would handle the money they collect with care. However, according to a report from the attorney general, in the case of the Belgian copyright group SABAM the opposite is true.

In the report published today after a three year investigation, it was concluded that SABAM has been keeping money from artists. The attorney general further noted that SABAM was poorly organized, demonstrated a lack of internal control, and was unclear about how the royalties they collect should be divided between the various artists and composers.

It was further found that significant amounts of money were not paid at all, and were kept on the bankroll of SABAM. Aside from the administrative mess, SABAM has also misled artists by misrepresenting certain costs on their yearly balance.

As a consequence of these findings, five of SABAM’s top managers will be prosecuted. The five are accused of abuse of trust and forgery of documents. In addition, SABAM will have to compensate the artists for their losses. How much money SABAM held from the artists wasn’t made public, but it is a significant amount according to the report.

This is not the first time SABAM has made the headlines. In one of their most prominent legal cases against the Belgian ISP Scarlett, the court ruled that the ISP has to stop all piracy on its network or pay a 2,500 Euros fine per day.

The case against Scarlett is currently under appeal, but if SABAM wins again, we will be very interested to hear of their plans for any damages awarded to them. We seriously doubt that the artists they claim to represent will get their rightful share.

Source: Copyright Group Prosecuted For Failing to Pay Artists

A year later, Scarlet’s lawyers were back in court. The court previously ordered that Scarlet has to pay compensation of 2,500 Euros for every day they failed to stop file-sharers sharing files, but the company’s lawyers argued it was impossible to comply, since the anti-piracy system ‘Audible Magic’ they were told to use by the court (on the advice of the music industry and SABAM), simply did not work.

Now, having heard a lawyer for SABAM admit that they had misled the court over the effectiveness of Audible Magic, the judge in the case has reversed the ruling. The final ruling in the case is due in October 2009 at the court of appeal in Brussels, so until then, the judge decided that Scarlet are no longer subject to the 2,500 Euros per day fine, which had already reached around 750,000 Euros.

This year, several music industry lobby groups have spoken out in favor of content filters. They argue that ISPs have the responsibility to prevent their customers from accessing copyrighted works, and thus act as a virtual police force. Earlier this year, IFPI took the Irish ISP Eircom to court for this reason. In addition, IFPI asked the European Parliament to adopt legislation that would make such filters mandatory, and to block entire websites including The Pirate Bay.

Luckily, the European Parliament decided that anti-piracy filters were not appropriate. In addition, it later ruled that other anti-piracy measures, such as “three-strikes” laws are too strict as well, as such policies restrict the rights and freedoms of Internet users. In the light of these recent developments, and because it is simply impossible for any ISP to filter transfers of copyrighted works on their network, Scarlet has a good chance to win their appeal next year.

Source: Anti-Piracy Lobby Loses Against “Non-Filtering” ISP

Scarlet said right from the start that it believed that if it complied with the court order it would be breaking the law. The ISP claimed that Belgian law forbids it from spying on its customers so it lodged an appeal against the ruling, with managing director Gert Post saying: “This measure is nothing else than playing Big Brother on the Internet. If we don’t challenge it today, we leave the door open to permanent, and invisible and illegal, checks of personal data.”

Now, over a year later, Scarlet’s lawyers argued in court that the company simply cannot stop the flow of illicit files, which is a serious situation since the ISP has to pay compensation of 2,500 Euros for each day it fails to do so. According to a report, Scarlet has tried different techniques to try to comply with the ruling but has had no success.

First of all, Scarlet slowed down P2P traffic with the help of some Cisco technology. All this led to was complaints from the customers, and it did nothing to stop the availability of the illicit files. A lawyer for Scarlet, Christoph Preter said: “We have actually received complaints that P2P traffic was slower, but it remained possible. It is only a deterrent measure.”

The ISP quite rightly refused to block all P2P traffic, since it said it would be blocking legitimate traffic too. However, copyright group SABAM said this was not a valid excuse. “The argument put forward by Scarlet,” said SABAM’s lawyer, “is not about the impossibility of blocking, but about the consequences.” SABAM clearly doesn’t care who is affected, as long as it gets its way, stating that Scarlet simply hasn’t tried hard enough to comply with the court.

The second solution, the filtering of illicit files, was a solution put forward last year by SABAM itself. On the advice of an appointed P2P ‘expert’, the court ruled that Scarlet must use the content filtering technology offered by Audible Magic. However, Scarlet tried this system and it didn’t work when scanning for files on their network. During last year’s court case it was claimed that Audible Magic had experience with filtering in the US with Verizon and in Asia with another ISP. However, Scarlet made inquiries with Verizon about the partnership but was told that no such deal exists and Audible Magic refused to reveal who the Asian ISP is.

“We have misled the court,” said SABAM’s lawyer. “But SABAM followed the expert in the choice of Audible Magic, so we were acting in good faith.”

A ruling in the case is not expected until 2010.

Source: ISP: It’s Impossible For Us to Stop Illegal P2P