Soon the European Court of Justice will have to decide whether an Internet service provider can be forced by a music rights group to proactively filter all of its traffic - both inbound and outbound - for copyright infringements. As detailed in a new paper by intellectual property expert Cedric Manara, the notion is fraught with difficulties and the potential for collateral damage huge.

While most eyes are on the Internet-breaking potential of the proposed PROTECT IP and SOPA legislations in the United States, there is a huge decision pending for the European Court of Justice.

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)