Stefan Widmark

Stefan Widmark

Sara Backman

Sara Backman

The Supreme Court has asked the European Court of Justice (ECJ) for a preliminary ruling in a case concerning an order to provide information pursuant to the Swedish Copyright Act. The request concerns whether the EU Data Retention Directive (2006/24/EC) prevents an internet service provider (ISP) from being ordered to reveal to a rights holder the identity of a subscriber suspected of infringing IP rights.

Background
The request for a preliminary ruling was made by the Supreme Court in a copyright litigation case between five audiobook publishers, and Perfect Communication AB, an ISP. Before the case reached the Supreme Court, the audiobook companies had requested the district court to order Perfect Communication to reveal information regarding the name and address of the registered user of a certain IP address, who was suspected of infringing copyrights in a large number of popular audiobooks. The district court granted the request, whereupon Perfect Communication appealed to the Svea Court of Appeal. The appeal court reversed the district court’s judgment and denied the audiobook companies’ request for an order to provide information on the grounds that the audiobook companies had failed to show probable cause for copyright infringement.

The audiobook companies appealed to the Supreme Court, which granted leave to appeal on 25th January 2010. On 25th August 2010 the Supreme Court requested a preliminary ruling from the ECJ on two questions:

  • Whether the Data Retention Directive prevents the application of a national rule based on the EU IP Rights Enforcement Directive (2004/48/EC), which provides that an ISP in a civil case can be ordered to provide a copyright owner or a rights holder with information on which subscriber holds a specific IP address assigned by the ISP, from which address the infringement is alleged to have taken place. 
  • Whether the answer to the first question is affected by the fact that the state has not yet implemented the Data Retention Directive, although the deadline for implementation has passed.

The prerequisites for the questions are that the applicant has shown probable cause for the infringement of certain copyrights and the measure is proportional.

Applicable Swedish and EU law 
Based on Article 53(c), Section 2(4) of the Copyright Act, an order to provide information can be issued against an ISP if infringement has been carried out using the internet service provided by the ISP. When a court issues such an order, the duty of confidentiality that is otherwise placed on the ISP is put aside. This provision was implemented in the Copyright Act based on Article 8 of the IP Rights Enforcement Directive.

The IP Rights Enforcement Directive does not oblige member states to implement regulations prescribing that subscriber data regarding a certain IP address can be disclosed to a rights holder. However, Swedish IP rights legislation, including the Copyright Act, has been amended to include a possibility for rights holders to request a court to order an ISP to disclose such information if the applicant can show probable cause for infringement and the disclosure is proportional.

According to the Data Retention Directive, which is designed to harmonise member states’ legislation regarding the obligation for an ISP to store certain data for the purpose of ensuring that the data is available for the investigation of serious crimes, member states shall take action to ensure that stored data is made available only to the relevant authority. According to Article 11 of the Data Retention Directive, the limitation set forth in Article 15.1 of the EU Privacy and Electronic Communications Directive (2002/58/EC), according to which member states may limit the confidentiality that is otherwise applied to personal data, does not apply to data that is stored according to the Data Retention Directive (ie, data stored in order to ensure that it is available for investigations of serious crimes). Article 11 of the Data Retention Directive is limited to the directive’s scope of application and its purpose.

Disputed issues
In the proceedings between the audiobook companies and Perfect Communication, the parties disagreed as to whether the information order provision in the Copyright Act violates the Data Retention Directive. Both the district court and the appeal court agreed with the audiobook companies that the information order provision in the Copyright Act does not violate the Data Retention Directive. The courts’ reasoning included that:

  • The order to provide information would apply to data outside the scope of application of the Data Retention Directive.
  • The purposes of the IP Rights Enforcement Directive and the Data Retention Directive are different.
  • Neither the ECJ nor the Swedish legislator has made any statement or indication that there is a conflict between the IP Rights Enforcement Directive and the Data Retention Directive.

However, Perfect Communication argued that:

  • The Swedish legislator had not considered the Data Retention Directive.
  • The Swedish legislation violates EU law.
  • EU law has priority.

Possible impact on other cases
As the ECJ usually takes at least one year to issue a preliminary ruling, it may be that other similar information order cases will not progress in the Swedish courts until the ECJ has rendered its decision and the Supreme Court had issued its judgment in this case. This may be the case, as the Supreme Court’s ruling will set a precedent in regard to whether and when information orders can be issued.

For further information please contact:

Stefan Widmark
Mannheimer Swartling
www.kastelladvokatbyra.se
Email: stefan.widmark@kastelladvokatbyra.se
Tel: +46 8 459 1240