French Supreme Court: Internet intermediaries must pay for blocking illegal streaming

On 6 July 2017, the French Supreme Court (Cour de cassation) confirmed a decision of the Paris court of appeal dated 15 March 2016 (RG No. 040/2016) which held that Internet intermediaries must bear the costs for implementing blocking measures against illegal streaming websites.

Legal background

Article L. 336-2 of the French intellectual property Code (“IPC”) allows rights holders to seek a Court order to have intermediaries (such as Internet Service Providers) implement measures to cease or prevent online copyright infringement. This article is the transposition into French law of Article 8(3) of the Information Society Directive (2001/29/EC). This provision has been used several times by rights holders in order to obtain blocking measures against major illegal streaming websites in France.

In the present case, several French professional Unions for copyright defence initiated proceedings against major intermediaries on the grounds of Article L. 336-2 IPC to obtain the blocking of several streaming websites including Allostreaming.

Case law background

The Paris court of first instance (decision dated 28 November 2013, RG No. 11/60013) decided that the costs of the blocking measures sought by the French Unions should not be borne by intermediaries. In its reasoning, the Paris court of first instance notably relied on the decision of the French Constitutional Council (in charge of examining compliance of a passed law with the French Constitution) dated 28 December 2000 (No. 2000-441 DC) which held that the law which obliged telecommunication operators to bear costs for implementing communication interception measures sought by public authorities for public safety purposes was contrary to the Constitution. The court also relied on the CJEU decision Sabam v. Netlog, C-360/10 dated 16 February 2012 which considered that an injunction ordering an hosting provider to implement a system filtering information in order to prevent files being made available which infringe copyright “would result in a serious infringement of the freedom of the hosting service provider to conduct its business (…).” (§46).

Such interpretation was, however, not followed by the Paris court of appeal which took the opposing position and relied on the CJEU decision Telekabel, C-314/12, dated 27 March 2014 in order to strike a balance between copyright and the freedom to conduct a business for intermediaries. According to the appeal court, unless intermediaries demonstrate unbearable sacrifices (which had not been demonstrated in the present case), they shall bear costs for implementing blocking measures.

Appeal against this court of appeal decision was filed before the French Supreme Court (which only examines whether the law has been correctly applied by the appeal court).

Supreme Court Decision

According to the French Supreme Court, Article L. 336-2 IPC and the French hosting provider law do not prevent costs which are strictly necessary for the preservation of the copyrights at stake, ordered on the ground of article L. 336-2 of the IPC, being borne by intermediaries even if such costs are likely to be significant. Indeed, such provisions shall be construed in light of Directives 2000/31 and 2001/29 which provide that, despite their lack of primary liability, intermediaries shall contribute to the fight against illegal content and more particularly against copyright infringement given that they are the best position to put an end to such infringement. The Supreme Court then considered that, given that these intermediaries participate in the defence of rights holders’ interests, which are of private nature, they cannot rely on the above-mentioned decision of the Constitutional Council, which related to a law on public safety matters. Finally, with respect to the balance between freedom to conduct business enjoyed by intermediaries and the protection of IP rights, the Supreme Court held that an injunction ordering an intermediary to implement blocking measures at its own cost does not violate the very substance of the freedom to conduct business insofar as said intermediaries remain free to determine the concrete measures to be implemented in order to achieve the result sought. This would however be different if the measures would result in unbearable sacrifices. These would need to be proven by the intermediaries (according to CJEU Tekekabel decision, §47). In the present case, the Supreme Court confirmed that:

• The Paris court of appeal correctly judged that it is only in the event where the blocking measure is disproportionate in terms of complexity, cost and duration to the extent that it may ultimately compromise the viability of the business model of intermediaries that the cost of the measure may be borne by right holders;
  
  
• By concretely balancing the interests at stake, the court of appeal took into account the fact that the professional Unions for copyright defence are already threatened by copyright infringement whereas intermediaries did not demonstrate that implementation of the ordered measures would result in unbearable sacrifices or would compromise their business viability. Hence, bearing the costs was strictly necessary for preserving the copyright at stake.
  
  
• So all in all, the Paris court of appeal decision was upheld by the French Supreme Court.