Oscar Swartz :: Texplorer

Pirate Bay vs. Denmark: Sweden reconfirms EU law

In two postings (a heavier legal one and a summary) I have claimed that Denmark breaks EU law when they make network operators directly responsible for copyright infringement through just transporting data. This clearly nullifies Article 5.1 in the Infosoc Directive, the purpose of which is to absolve network operators from such liabilities and guarantee that telecoms and ISPs can act as neutral carriers of data between third parties. (To my Swedish readers: I will blog in Swedish again, but these postings are in English since I am on an international mission in this specific question).

I cited the Swedish government when they very specifically claimed that a Danish implementation would break EU law. Their opinion was signed on March 10, 2005.

This opinion has been confirmed on Sep 3, 2007 by Cecilia Renfors, a Swedish judge and special governmental investigator who had the assignment to propose new legislation to combat unauthorized file-sharing. She produced a 379 page report, downloadable in Swedish as a PDF, called (translated) Music and film on the Internet - threat or opportunity

Source: Regeringen.se

Her main mission was indeed to nail the network operators since former Minister of Justice Thomas Bodström and she saw this as a smoother way to combat file-sharing than going after the file-sharers themselves. Broadband providers are, as we know, regularly called "thieves" by the recording companies in Ifpi and RIAA.

Renfors investigated how she legally could force broadband providers to cut the lines for their own subscribers in line with Article 8.3 in the Infosoc Directive (that Denmark refers to in order to justify its rulings).

In order to propose how this could be legally done in Sweden she looked at Norway, Finland, Denmark, UK and Germany. Denmark was the only country that considers network operators committing copyright infringement from just transporting unlicensed information.

Renfors discussed this and of course came to the conclusion that it would be much easier to achieve what she wished if she could do what Denmark is doing. But would that be possible? On p. 349-350 she answers this with an affirmative NO! She cannot propose such legislation.

She refers to the former opinion by the Swedish government and reconfirms that a Danish model would NOT be compatible with Article 5.1 in the Infosoc Directive. She also repeats the opinion that the Danish way actually nullifies the whole purpose of that Article.

I am not used to cite Renfors in positive ways, since I certainly do not approve of her suggested procedures through which an ISP could be forced to cut the lines of their own subscribers. But the argument for that proposal is not that the ISP commits copyright infringement.

Additionally, Renfors never suggested blocking web sites outside the ISPs own network. Denmark does this. Such proposals would most likely break a number of Swedish laws (and Danish?), including the constitution which prohibits state censorship. It seems to me that the ability for Denmark to block access to sites outside an ISP's own network is directly related to their (unlawful) claim that a network operator commits copyright infringement in their routers.

This is clearly an occasion when copyright will undermine freedom of speech, information and communication if the carrier does no challenge the Danish law in the EC Court of Justice.

I will point to one case and leave it to the reader to think more:

There is a movement against electronic voting machines in many countries because ultimately what comes out from the "black box" depends on the software in it, making it virtually impossible to know if elections are manipulated. In the U.S. internal documents from Diebold Election Systems, a producer of these machines, found its way out on the Internet. Flaws in the design were discussed. College students started publishing the documents on their web sites and were immediately served "Cease and Desist" letters from Diebold's law firm, claiming copyright infringement with threats of lawsuits and damages. To stop facts and information from spreading. Eventually the process was unstoppable. The more legal threats, the more the documents replicated. They started appearing on file-sharing networks like Freenet och Torrent sites.

You can read the New York Times story about Diebold in an article called File Sharing Pits Copyright Against Free Speech or Chapter 7 in professor Yochai Benkler's book The Wealth of Networks: How Social Production Transforms Markets and Freedom. (The book is freely downloadable, but we who like it and need it will find it very worthwile to buy the printed book of course. My picture of Benkler at a Stanford conference is found here).

Would it not have been easier for Diebold to send its cease and desist letters to ISPs to make them shut down access to certain web sites, torrent sites and so forth? Yes! And this is of course the whole purpose of the Danish (illegal) actions: To pepper ISPs with all these rulings so that anyone who wants to block someone from reading or seeing something eventually just have to use a lawyer who sends a letter to the ISP. Since the ISP knows that a judge would order them to do it anyway. Pirate Bay was the second instance and after the third and fourth and fifth the message would be clear. Obey lawyers!

But this danger is also the reason that EU prohibits copyright legislation or interpretation like the Danish. It is utterly important that Tele2 now appeals that court order and claims that it violates Article 5.1 in that EU Directive. The court then has to freeze the decision while it refers the case to the EC Court, the Court of Justice of The European Communities, in Luxemburg. Tele2 has talked about not wishing to take a stand between two parties, Ifpi and The Pirate Bay.

That is a completely wrong line of reasoning. I prove it in a very powerful way in an article that I wrote after we in Sweden managed to combat the Danish pest from spreading over Öresund. The background is that a Swedish ISP announced that they would "voluntarily" follow the Danish court order from September 2006 and block Russian downloading site AllofMP3.com. A campaign among site owners to block access from customers of that wishy-washy Telecom/ISP ensued. Led by The Pirate Bay! As a result of this activism from The Pirate Bay, from The Pirate Bureau, from bloggers, from me and of course from a rebellion among their own customers the ISP was forced to back down and replace its Chairman of the Board of Directors. Read it, please! (English!) It almost makes me teary-eyed, sob sob ... Tele2 now HAS TO TAKE A STAND for its own business model. And the future. Act up!

Pirate Bay vs. Denmark to EU Court: Summary

Yesterday I made this very long and deep analysis of Denmark's legal rulings where ISPs have been forced to shut down either their own subscribers or block access to certain sites (music downloading site AllofMP3.com in Russia and The Pirate Bay in Sweden).

The question is of ultimate importance: Denmark has abolished freedom of communications through its rulings. Fortunately they are in violation of EU law and Peter Sunde of The Pirate Bay announced yesterday that he has received advice from the Swedish government on how to drag the Danish state to the The Court of Justice of the European Communities in Luxemburg.

Below the picture follows a non-technical summary of the argument I explored in detail earlier.

Challenging Denmark: Peter Sunde of The Pirate Bay

The Supreme Court of Denmark has negated the whole purpose of an article in an EU Directive. The purpose of that article is to make it possible for network operators (like ISPs) to act as neutral carriers of data.

We are talking about Article 5.1 in DIRECTIVE 2001/29/EC OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 22 May 2001 on the harmonisation of certain aspects of copyright and related rights in the information society, the so called Infosoc Directive.

EU realized that their tougher copyright legislation could have disastrous effects: Someone could start claiming that the machines that network operators use to transport and direct data (routers, switches) are actually "copying" information. Quite a crazy thought, since on the Internet information is broken down into packages and blended into one common stream of data. It stretches imagination to claim that a router performs "copying" when the top core routers of big telecoms have a capacity to handle at least 100 million information packages per second (with a standard size of 1500 bytes each) and that all the packages of a "work of art" never reside at the same time in a router.

Anyway, in Article 5.1 the directive makes it mandatory for all EU member states to allow such "copying" by network operators.

Denmark's Supreme Court has now, illegaly, introduced a restriction on this right.

They claim: Only traffic that derives from duly authorized (licensed) originals may pass routers, e.g. a music file that has been put out on a web site by a record company. But not if you happen to find that music file in another way. Or a picture or whatever information. Denmark claims that the network operator (ISP) commits copyright infringement in the router if it "lets" you e.g. watch a music video on YouTube that someone has put up there without a proper permission. (So far it has been the user who put it up there or maybe YouTube that hosts the material that would commit copyright infringement). But the court says to the network operator: The only way you can protect yourself from committing a crime and be liable for damages is to

1. cut the lines from customers that transmit non-licensed information
   
2. block access to sites that your customers use and that make it easier for them to receive and send unlicensed information
   

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In The Pirate Bay case the blocking is even stranger: Note that NO UNLICENSED information is even transmitted between users and The Pirate Bay in any direction. There is no "illegal" copying taking place when communicating with The Pirate Bay's servers even by the erroneous Danish definition. File-sharing takes place peer-to-peer. Please recall that The Pirate Bay does NOT host any music or video files. It is a site where you, indirectly, can exchange information with other Internet users about what you and they store on your and their own hard drives. The court understands this. But still blocks The Pirate Bay because that is seen as a good way to stop the ISP from avoiding to incriminate itself from (unknowingly) perform "pirate copying" via later potential later peer-to-peer traffic that might be the result of someone accessing The Pirate Bay site.

This is of course lunacy. But the court does not seem to understand what they have done: Abolished Internet as we know it. They have outlawed Internet and substituted it with something like radio or TV but via cable, where the technical operator is only allowed to have "licensed information" pass through the network and even have to block indirect ways for people to inform themselves and search for information, such as the Pirate Bay.

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The strategy - to close the net - has been devised by a very powerful Danish lawyer, Johan Schlüter, who works for the recording industry lobby. Johan Schlüter was one of the vilest persons I have heard in my life when he spoke in Stockholm last spring. The press was not invited but I sneaked in and reported in my monthly column for Computer Sweden, an IDG paper.

I will write more about Schlüter's thoughts later. But I can reveal that his vision of the Internet is basically a one-way street with pipelines into the homes of couch potatoes who receive only licensed information from the entertainment industry via broadband. Only payment data from their connected credit cards flow in the other direction via narrowband. He is adamant that he will achieve this vision via legalistic fire-bombing of network operators.

I wonder the following:

Why have the Danish telecoms allowed this to happen?
Why does it take 20-something IT boys from the Kingdom of Sweden to challenge this in the EC Court?
Why does it take an activist writer like me to analyze the situation?

Denmark! Hello! Anyone there?? Hello Copenhagen! You arrange Europe's hippest gathering of IT visionaries at your yearly Reboot conference! I loved it when I was there in 2006. Peter Sunde on the picture above was there also. On the stage. Talking to all those IT hipsters that gathered in Denmark. He held a little speech on the main stage because one day earlier The Pirate Bay had been raided in Sweden by 62 police men in 10 locations. Three days later he and his friends had restored the site. The Pirate Bay was up and running. And it grew enormously as a consequence of the raid. These guys have the guts that it takes to combat the assault on the new digital world that lawyers like Johan Schlüter make. It is time to wake up to save yourselves from the darkness of abolished freedom of communications! Act up!
[I reported from Reboot and Peter Sunde's appearance here - in Swedish].

The ISPs "may" challenge the court ordered blocking of Pirate Bay? "May"??

If they don't, Denmark will not have anything like the Internet in a few years. But maybe the Danish telecoms will have to rely on the boys from The Pirate Bay to save Denmark from Schlüter's dark vision?

As I say in my former posting: Blocking may (unfortunately!) still be performed, because of Article 8.3 in the directive. But the courts would have to use completely different arguments than in the current judgements. And I believe that it would be more difficult to block under such circumstances. It would also become a more openly political question. Now it is strictly technical: The router performs illegal copying. Nothing to discuss, really.

I am happy to see that network guru Patrik Fälström, who is both an IT advisor to the Swedish government, a key member of many international committees on internet standards and a senior tech wiz at Cisco, immediately grasped the importance of this issue.

Denmark and Pirate Bay: Take it to the European Court of Justice

I have written twice about Danish rulings that have forced ISPs to block access to certain web sites at the demand of IFPI Denmark, the recording industry organization. In October 2006 Danish ISP Tele2 was ordered to block the controversial Russian music downloading site AllofMP3.com. (Warning to all my cool pirates out there: This is sort of heavy legal stuff but potentially very important. UPDATE: I posted a summary and popular version of this tehcnical analysis. UPDATE 2: Read my most popular account of the whole issue where I also found that the Swedish government once again said that the Danish way would break EU law).

I read the court ruling quite carefully and reacted on my blog (in Swedish) with a gut reaction: This cannot be true! I was something of an internet pioneer and started Sweden's (maybe) first independent ISP in 1994. Now I am a writer, consultant, activist, analyst. I argued from a technical and network communications' point of view: If that legal interpretation is correct, then it would be impossible to run an ISP. If we apply that ruling consistently, all ISPs are massive law-breakers and we may as well close down the Internet. Hence, I argued, there must be something wrong with it.

I did not, however, make deeper research into the legal background.

Now I have. And I will claim that the interpretation of law in Denmark is not compatible with the Infosoc Directive, 2001/29/EG [PDF], that formed the basis of the copyright law that the Danish courts apply (Lov om Ophavsret). I invite law professors and scholars and anyone who wish to discuss this here on my blog or all over the net. Link this article! This is important. It is about the future of the whole Telecom and ISP industry because IFPI will now pressure other countries to apply it.

A few days ago a new ruling was issued in Denmark, where Tele2 was ordered to block access to The Pirate Bay, the Swedish file-sharing site of global fame and eternal glory, featured in Vanity Fair, Wired, Wall Street Journal, BBC and other places. This was big news, see e.g. the Reuters story. I commented in Swedish yesterday and was shocked to see that the court referred to the former case and repeated their mistaken reasoning. So I dug deeper into the legal issues and noted that the Swedish government has explicitly rejected the Danish interpretation as incompatible with the Infosoc Directive.

After that I have received communications from Denmark and also a reference to the Supreme Court case in Denmark that established the "case law" concerning this issue. Here are all three cases for download. In Danish of course:

• IFPI vs. TDC [PDF]: Supreme Court, U2006.1474H, Feb 10, 2006
• IFPI vs. Tele2 (AllofMP3) [PDF], Oct 25, 2006
• IFPI vs. DMT2/Tele2 (Pirate Bay) [PDF], Feb 5, 2008

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So let us look at the Supreme Court judgment where this "case law" was established:

Internet Service Provider TDC had ADSL subscribers who used their connections to put up FTP servers at home and distributed music without permission from copyright holders. It was established that these subscribers performed copyright infringement. The question was: Could the ISP be forced to shut them down?

IFPI points out that according to Infosoc Directive Article 8.3:
"Member States shall ensure that rightholders are in a position to apply for an injunction against intermediaries whose services are used by a third party to infringe a copyright or related right".

Sure, so the question is now: How and under what circumstances?

Well, there is a point (59) in the preamble that gives a little more information:

"In the digital environment, in particular, the services of intermediaries may increasingly be used by third parties for infringing activities. In many cases such intermediaries are best placed to bring such infringing activities to an end. Therefore, without prejudice to any other sanctions and remedies available, rightholders should have the possibility of applying for an injunction against an intermediary who carries a third party's infringement of a protected work or other subject-matter in a network. This possibility should be available even where the acts carried out by the intermediary are exempted under Article 5. The conditions and modalities relating to such injunctions should be left to the national law of the Member States".

OK, so there is leeway for each nation to regulate this. But can they do just anything? Certainly not. I now claim that the way that the Danish Supreme Court is implementing these injunctions is clearly breaking EU law as expressed in the Directive itself. And it does so in a blatant and shocking way which, if correct, would amount to the same as closing the net down. The EU legislators understood this risk so they put in a protection against such closure. It occurrs in the referred to Article 5.

But let us look at how the Danish courts have reasoned:

1) Copyright infringing traffic had been established, that travelled in TDC's network.
2) This traffic passed through TDC's routers
3) (Very) temporary copies were produced in these routers
4) Hence TDC itself was committing copyright infringement
5) In order to protect itself from committing a crime they had to block users/servers

My gut feeling from having started and run an ISP from 1994 to 2004 (Bahnhof) tells me: This cannot be correct. Internet traffic would be virtually impossible if routers of the carriers are regarded as committing copyright infringement as soon as unlicensed content passes between two parties on the Internet. Every node on the Internet would be liable for massive copyright infringement and we might as well close the whole thing down.

And I am right.

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The Infosoc Directive explicitly allows such "copying" in Article 5, (which is expressed as an exception to and a limitation of the rights holders' exclusive rights):

"Article 5
Exceptions and limitations
1. Temporary acts of reproduction referred to in Article 2,
which are transient or incidental [and] an integral and essential
part of a technological process and whose sole purpose is to
enable:
(a) a transmission in a network between third parties by an
intermediary, or
(b) a lawful use
of a work or other subject-matter to be made, and which have
no independent economic significance, shall be exempted from
the reproduction right provided for in Article 2."

This is non-negotiable. Every member state must accept it. Point 1 (a) says that "copying" in a router is always allowed. Now, the question is what that little "or" means when the article talks about "lawful use". The Danish court (mistaken) has a very different opinion from the Swedish government (correct). From the Danish case:

"TDC's transimssion af værkerne indebærer midlertidlig eksemplarfremstilling af den karakter, som er omhandlet i lovens § 11 a. TDC kan imidlertid - som erkændt - ikke påberåde sig tilladeligheden efter denne bestemmelse, idet denne forudsætter, at eksemplarfremstillingen sker på grundlag af et lovligt forlæg, jf. lovens § 11, stk 3. TDC's transmission indebærer derfor, at TDC objektivt krænker de ophavsrettigheder, som administreres af de indkærede ...".

Well, the court says that TDC does commit copyright infringement through transporting the data and "producing copies" in their routers since the "originals" are unauthorized. They refer to the Danish implementation of article 5.1 (= § 11 in the Danish Copyright Law)

That interpretation is plain wrong. There is nothing about "authorized originals" in Article 5.1. It seems the Danes are confused by point (b): "lawful use", and claim that this means "copies from authorized originals" (which is wrong but it does not matter for the argument here).

But think for one moment about it in purely logical terms: If 5.1 makes an exception for only "lawful use" under those other circumstances, there would be no need whatsoever for (a). Everything would be covered by (b) and (a) would be completely redundant information. Point (a) is an exception to (b). The whole point of (a) is to make Internet possible. The point is to allow routers to "make copies" of whatever information that passes through them.

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This is confirmed by the Swedish Justice Department and Government when Sweden implemented the Infosoc Directive. These questions are discussed in great detail in the legislative proposal, which forms part of legal interpretation. It can be downloaded here in Swedish from the official government site: It is the top of the two PDFs there.

On page 94 they write (translated) about Article 5.1 (a) and (b):

"Hence the article differentiates between transmission of a work in a network (article 5.1.a) and the end-users utilization of a work (5.1.b)".. They go on to explain that 5.1.b. has to do with temporary copies at the end-users computer, such as web caches.

The Swedish legal proposal/backgrund tells us on p. 97 regarding 5.1:

"A few interested parties, e.g. the Swedish Antipiracy Bureau, have demanded that only such copies that are derived from an authorized original should be covered by the exception. To implement further conditions in Swedish law for temporary acts of reproduction would not be compatible with article 5.1. In addition, a requirement for an autorized original would entirely counteract the purpose of the article to make possible transmissions in a network between third parties as well as web-browsing. Hence, there can be no justififcation for demanding authorized originals in order to allow temporary acts of reproduction".

(As you can see there is no requirement for "authorized originals" for 5.1.b either, even if that is irrelevant for the Danish case, so my point about the "or" might not even have to be invoked. But what is "lawful use" doing in that point? Well it is defined in point (33) in the preamble and it is not what the Danes believe but not really relevant for the argument here).

So I really and honestly claim that the Danish Supreme Court is wrong and will be struck down in The Court of Justice of the European Communities, Curia (De Europæiske Fællesskabers Domstol). The Danish court has served a political, not a legal judgment. They have passively served the interest of a few record companies and taken a stand against all telecom and internet providers and internet users. Because their interpretation has one single implication: Close the Internet!

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So what about Infosoc Directive Article 8 and point (59) where they talk about national leeway to make injunctions against intermediaries? Yes, according to the Directive such injunctions could and should be made possible under national law, although the intermediary does not commit copyright infringement through transporting the material via its network.

Now, there is a huge difference between saying:

(a) All information that passes a router constitutes copyright infringement if that information comes from an unauthorized copy. Therefore, in order to protect yourself from committing copyright infringement you have to block all these users on your own network or all these sites somewhere else on the Internet. (Danish cases)

(b) You do not commit copyright infringement simply through letting this information pass your router, since there is an explicit exception for that. But you have to block certain users or sites anyway since this is the best way to stop these others from committing copyright infringement. (Correct interpretation)

The former case is absolutely incompatible with the Internet. We could as well close the shop and go back to watching TV. Which may be the whole point of course.

As a free communications activist I do not support the latter case either. But it is very clear that it would be much harder to shut down communictaions in the second case. I have nothing to say about a national regulation that makes (b) possible, what it would entail, what evidence that infringement claims should be based on, how massive the infringements would have to be, if these infringing sources can be situated on other networks or whether they must be on your own and so forth. That is up to others to debate.

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I have now shown why the Danish cases are not compatible with EU law and look forward to discussion everywhere. In media all over Europe. The Danish cases are dangerous and must be fought. The Danish state must be reprimanded and brought to justice. If they prevail we will neither have free speech, nor Internet anymore.

One final complaint. I must criticize the Telecom/Internet industry for being wimps. Your core business idea is challenged here: To transport data from A to B without being liable. And a court makes a blatantly mistaken judgment that risks all of Internet as we know it. And you just accept it.

Yes, I am a burning activits for freedom of communications. But isn't it odd that a writer/blogger have to dig deep into these issues and spend days researching them? I am not exactly making money from it unfortunately and need support to go on fighting for free communications, telecoms and ISPs, hint hint ...

P.S. There is an English translation of the AllofMP3 ruling by the Pro Piracy Lobby here. They apply the same reasoning as in the Supreme Court case although there are other differences of course. AllofMP3 was a site outside Tele2's own network. The TDC (Supreme Court) case had to do with users on its own network. But the basic claim that the routers perform copyright infringement is the same.

The Danish blocking of Pirate Bay was big news in the world since Reuters picked up the story. And of course all the Technology sites covered it, like The Register, and TorrentFreak,