Internet legal developments to look out for in 2016

A preview of some of the UK internet legal developments that we can expect in 2016, [updated with actual developments to 17 September 2016]. Some topics are perennial (see 2015 and 2014), some are new.

EU copyright reform In December 2015 the European Commission published, as part of its Digital Single Market initiative, a proposal for a Regulation on cross-border portability of online content services. In parallel it published a ‘political preview’ of proposals to amend copyright law, for which more detailed legislative proposals and policy initiatives will be worked up during 2016. This process will incorporate the pending review of the Satellite and Cable Broadcasting Directive, which has ventilated the possibility of extending the country of origin copyright rule for TV and radio programmes from satellite to the internet. Other areas of likely interest include copyright exceptions, enforcement (probably against a broader variety of intermediaries) and news aggregation services. [On 14 September 2016 the Commission published proposals for a Directive on Copyright in the Digital Single Market, regarded as internet-unfriendly overall, and a Regulation extending the country of origin provisions of the Satellite and Cable Broadcasting Directive to broadcasters' ancillary online transmissions.] 

Online consumer contracts In another strand of the Digital Single Market initiative the Commission in December 2015 published proposals for two Directives on online consumer contracts, one applicable to digital content and the other to goods. Member States would be prohibited from enacting either higher or lower levels of consumer protection than specified in the Directives.

Copyright and linking Three more linking cases are on their way to the CJEU, all from Dutch courts: C-160/15 GS Media (a reference from the Dutch Supreme Court concerning a link to an infringing copy of a photograph), C-527/15 Filmspeler (a site blocking case referred by the Central Netherlands District Court; the target site is alleged to have provided a downloadable media player with an add-on containing refreshable lists of links to infringing material; cf Popcorn Time) and C-610/15 Pirate Bay (a site blocking case with linking aspects, referred by the Dutch Supreme Court). [The CJEU issued its judgment in GS Media on 8 September 2016.]

Copyright and temporary copies The C-527/15 Filmspeler reference asks the CJEU whether the transient copies that a user makes when viewing an infringing movie can be excepted from infringement under the EU Copyright Directive’s temporary copies exception. The questions specifically address lawful use and the three step test (which were not covered in the Meltwater/PRCA ‘right to browse’ case).

Site blocking orders The Dutch Supreme Court has referred a site blocking question to the CJEU in C-610/15 Pirate Bay. Meanwhile in the UK the ISPs’ appeal to the Court of Appeal in Cartier v BSkyB (three judgments here, here and here) is pending. This was the first UK trade mark site blocking case and is the first site blocking case since Newzbin 2 to be contested by the ISPs. [The Court of Appeal issued its Cartier judgment on 6 July 2016, upholding the jurisdiction to grant a site blocking injunction in a trade mark case.]

Intermediary liability The mere conduit and injunction provisions of the Electronic Commerce Directive are the subject of a German reference to the CJEU in Case 484/14 McFadden. It concerns injunctions against providers of open wi-fi networks to prevent copyright infringement by users.  [The judgment was issued on 15 September 2016.]  The European Commission has been conducting a public survey on the “regulatory environment for platforms, online intermediaries, data and cloud computing and the collaborative economy” including the intermediary liability provisions of the Electronic Commerce Directive. The survey closes on 6 January 2016. There is crossover with the Commission Communication "Towards a modern, more European copyright framework" issued on 9 December 2015.

The Investigatory Powers Bill Following the Anderson, ISC and RUSI reviews the draft Investigatory Powers Bill has been published and is undergoing formal pre-legislative scrutiny by a Joint Parliamentary Committee. The Committee is expected to report by 11 February 2016. The House of Commons Science and Technology Committee, the Joint Parliamentary Committee on Human Rights and the Intelligence and Security Committee of Parliament are also considering the draft Bill. The Bill itself is expected to be introduced in Parliament in March 2016. [The progress of the Bill can be tracked here.]

Questions arising out of David Davis and Tom Watson MPs’ legal challenge to the data retention provisions of DRIPA have been referred to the CJEU by the Court of Appeal. A reference from the Swedish courts (C-203/15 Tele2 Sverige) is also pending. [The Advocate General's Opinion issued on 19 July 2016. The judgment is expected in Autumn 2016.]

Interception and surveillance complaints to the European Court of Human Rights  include a case taken by Big Brother Watch, the Open Rights Group, English PEN and Dr Constanze Kurz and one by the Bureau of Investigative Journalism. Amnesty International, Liberty, Privacy International and others have lodged a complaint following the decision of the Investigatory Powers Tribunal on bulk interception and receipt of US PRISM and UPSTREAM interception product. 

Investigatory Powers Tribunal challenges brought by Privacy International and seven ISPs around the world to equipment interference and by Privacy International to use of bulk personal datasets are pending. The latter includes a challenge to the use of national security directions under S.94 Telecommunications Act 1984. 

Mindmap of legal challenges (interactive PDF with links to key documents):

AVMS Directive Review The European Commission is reviewing the Audiovisual Media Services Directive. This raises once again the appropriateness (or not) of extending TV-like regulation to the internet.  [The proposal adopted on 25 May 2016 includes some extensions to on-demand providers and internet platforms.]

EIDAS Regulation The replacement for the Electronic Signatures Directive comes into force on 1 July 2016. As well as electronic signatures it covers ‘electronic identification schemes’ and ‘electronic trust services’.

Data Protection Political agreement on the new General Data Protection Regulation was reached at the end of 2015. The Regulation should be formally ratified early in 2016 and come into force in 2018 [Confirmed] . Google’s appeal in Vidal-Hall is pending before the UK Supreme Court [but is reported to have been subsequently withdrawn]. Permission to appeal was granted on all points other than whether the claim was a tort.

Net neutrality Revisions to EU telecoms legislation will impose net neutrality rules from 30 April 2016.

[Updated 3 January 2016 to include net neutrality; and 2 February 2016 to include CJEU hearing date in Davis/Watson case. Surveillance litigation mindmap updated 8 August 2016. Further updates 17 September 2016.]

Everyman learns about internet jurisdiction

Everyman has just read the questions referred to the EU Court of Justice in C-441/13 Pez Hejduk. [And has now added some Pinckney updates, following the CJEU decision on 3 October 2013.].

Everyman: I see the ECJ has been sent another internet jurisdiction case.

Scholarly Lawyer: Keep ’em coming.

E: Well on my count they’ve had 9 internet jurisdiction referrals in 6 years: Pinckney; Martinez/eDate Advertising; Wintersteiger; L’Oreal v eBay; Sportradar; Pammer/Hotel Alpenhof, Blomqvist, and now this one.  What’s going on?

SL: Lots of tricky stuff, in actual fact.  But let's get straight that they’re not all jurisdiction cases.  You have to understand four different things: territoriality, jurisdiction, applicable law and the Electronic Commerce Directive.

E: They are all about cross-border internet liability, yes?

SL: Yes.

E: So why four different labels?

SL: So first we have territoriality.  Between you and me, no-one understands this apart from IP lawyers.  But it’s important.  Take copyright. Each country’s copyright law applies only within its borders.   To infringe UK copyright, you have to do an act within the UK.  If you do the same thing in France, that would infringe French copyright.  Or maybe not:  UK and French copyright are not the same.  

E: But what’s the problem?  Surely it’s obvious where a copy is located.

SL: Yes, although copyright can apply to transient copies and on the internet those spring up everywhere.  But anyway copyright isn’t just about copying.  You can infringe copyright in a load of different ways. 

E: Can we keep this simple?

SL: So if you put an infringing copy on your UK website, that’s not just copying but also making available to the public – a separate type of copyright infringement. But your website can be read anywhere in the world.  Does that mean you are infringing by making available to the public only under UK copyright, or under the copyright laws of every country in the world, or maybe just some of them? They’ve been having fun at the ECJ with that question.

E: So, what’s the answer? 

SL: Basically, targeting.  For database right…

E: Weren’t we discussing copyright?

SL: Have patience.  For database right the ECJ said in Sportradar that, country of the server apart, making available to the public occurs in the countries to which you target your website.  They said much the same for use of a trade mark in L’Oreal v eBay. 

E: Dare I ask about copyright?

SL: For copyright, they said in Titus Donner that targeting applies to the distribution right (that’s a third way of infringing copyright).  Actually no one has asked them about making available and copyright yet, though your Mr Justice Arnold has held that targeting applies.    

E: So targeting applies to everything then?

SL: Not so fast.  You might think so, but that would be too simple.  Clearly it doesn’t apply to copyright infringement by copying, since that is down to where the copy is made.  Also, the ECJ can only opine on rights that are harmonised across Europe.  That cuts out a chunk of criminal law, not to mention personality rights such as privacy and defamation.

E: So those are down to national laws?

SL: Correct.  Your national courts decide whether the right is territorial under your national law; and if so they apply their own test for the location of the act.  For example your English defamation courts have gone off in a completely different direction from targeting. According to them (and the Australian and New Zealand courts), a defamatory statement on a website is published wherever in the world it can be read and comprehended.  That's a mere accessibility rule, and bad news for the internet.

E: OK, we’ve done substantive law.  Let’s move on to jurisdiction.

SL: Yes, let’s. I’m sure you know the basic rule under the Brussels I Regulation.  You have to sue an EU defendant in the Member State of its domicile.  But there are many exceptions, including the particularly slippery Article 5(3).  That says that for a tort claim you have the option of suing a defendant in the location of the harmful event.  In an early pollution case the ECJ said that that includes the place where the damage is suffered. 

E: That makes sense if you’ve got toxic chemicals flowing down the Rhine – it only brings a handful of extra countries into the frame.  But if you apply that doctrine to the internet, doesn’t the whole world come into play? And within the EU wouldn’t that completely undermine the basic rule?

SL: Article 5(3) causes a lot of trouble.  Because it’s an exception Article 5(3) can’t be allowed to undermine the basic rule.  But you’re right, it’s very easy to argue that on the internet the damage is suffered wherever the effects of the website are felt.  The ECJ is also supposed to provide a high level of protection to IP rights; which could mean allowing rightsholders to sue in any country in which the IP right is infringed.

E: That makes sense, doesn’t it?  Otherwise every court will be clogged up applying the IP laws of foreign countries.

SL: Up to a point, but at the jurisdiction stage it’s only an allegation of infringement.  If a plaintiff only has to make an unsupported allegation to get jurisdiction in the country in which it wants to bring proceedings, then the basic defendant's domicile jurisdiction rule disappears.

E: So should the national court consider the strength of the allegation before taking jurisdiction?  

SL: Good question.  But that’s for each national court’s procedure.  Some countries maintain a clear distinction between jurisdiction and the substantive right; and others, such as England, will look at whether there is a good arguable case of substantive infringement when they consider jurisdiction.  And that brings into play the territoriality of the substantive right.  It’s all very difficult.  [Pinckney update: The CJEU seems to be coming perilously close to saying that jurisdiction and the substantive right must be kept completely separate (para 41 and 42) - even though in Shevill the CJEU said that the standard by which to test jurisdiction is for the national court.  We may start to wonder if the English approach is consistent with EU law.  The UK government made no submissions in Pinckney.]

E: But if, say, a targeting test were part of Article 5(3), then territoriality wouldn’t feature so much.  And all the national courts could apply a uniform jurisdiction rule.

SL: Well spotted.

E: But the ECJ hasn’t said that yet, has it?  In fact its Article 5(3) decisions seem to be all over the place.  Not only do they set different tests for off line defamation (Shevill), online defamation and privacy (eDate/Martinez) and online trade marks (Wintersteiger), but none of them has adopted targeting. 

SL: Wait for Pinckney. [Pinckney update: Well, the CJEU seems very happy with the idea that the meaning of Article 5(3) can vary according to the substantive right (para 32)].

E: That’s the one where the Advocate General has said the ECJ should declare the reference inadmissible? [Pinckney update: The CJEU declared the reference admissible.]

SL: That aside, it’s a copyright case.  The AG has suggested that if the ECJ declares it admissible then Article 5(3) should be aligned more closely with territoriality.  So the AG says that for communication to the public in copyright, the place of damage should be subject to a targeting test. [Pinckney update: Oh dear.  The CJEU has gone in the opposite direction and said in terms (para 42) that Article 5(3) does not require targeting.  Mere accessibility appears to be sufficient (paras 44, 47, operative part).] 

E: That’s all very well, but what on earth does it mean to target a country?  Isn’t that a very uncertain test?

SL: Shazam!  I produce a decision they made earlier: Pammer/Hotel Alpenhof.  It was nothing to do with IP rights or even tort, but the ECJ explained exactly what it means to direct activities at a Member State.  And they have referred to it each time they introduce a new targeting test.  So every time they apply the targeting test in a new area you can look up Pammer/Hotel Alpenhof to find out what it means.

E: That’s quite enough of jurisdiction.  Where does applicable law fit into all this?  Surely if a territorial right is engaged, then it must follow that that territory’s law applies?

SL: Well you’re right – in fact you might think there is no room for a choice of law rule at all.  But not all claims are about territorial rights.  And anyway we have the Rome II Regulation (plus the Rome I Regulation for contractual claims), which lays down choice of law rules for all sorts of non-contractual claims, including some that are territorial. 

E: Don’t tell me that Rome II gives a different answer.

SL: Fortunately, no.  For infringement of IP rights the applicable law is that of the country for which protection is claimed.  When you think about it, that’s really territoriality in different words.

E: So it seems simple enough.  A court has to apply the Rome I or II rules and then, assuming it has jurisdiction, decide the case on the basis of the applicable substantive law.

SL: Not exactly.  Now we have to factor in the ElectronicCommerce Directive.

E:  We’ve done substantive law, we’ve done applicable law and we’ve done jurisdiction.  How can there be room for anything else?

SL:  There’s always room for the internal market rules of the European Union.  These embody the principle of free movement of goods and services which underpins the EU. 

E: Go on.

SL: The Electronic Commerce Directive applied the internal market rules to online services.  The Directive says that one Member State cannot restrict online services incoming from another Member State. 

E: Which it would do by applying its own national law?

SL: Yes, or any other law that the receiving Member State’s court has decided is applicable.  In eDate/Martinez the ECJ said that if the applicable law is stricter than that of the foreign Member State from which the online service is being provided, the court must disapply it.

E: My head’s spinning. You’re telling me that having gone through the whole procedure of establishing jurisdiction and determining that its country’s law is applicable, the court then has to disapply that law again if it is stricter than the law of the defendant’s own country?

SL: If the defendant’s country is in the EU or EEA, exactly so. Except, that is, for IP as it's one of the fields excluded in the Annex.  Fun, isn’t it?

 [Pinckney update added 3 October 2013. Blomqvist added, 6 October 2013.]