The European Court of Justice issued a judgment in Scarlet v. SADAM (C‑70/10) deciding an injunction requiring general content filtering by an ISP for possible copyright infringing materials contravened EU directives.
The proceeding involved SADAM, a copyright management company acting on behalf of authors and composers of musical works and Scarlet an ISP. In case brought before the Belgium courts, SADAM asked the court to require the ISP to add content monitoring for copyright infringing materials and to block the transmission of infringing materials over P2P networks by the ISP’s subscribers. This issue was referred to the ECJ to ensure compliance with EU law.
The ECJ rejected the planned monitoring on the basis it was costly to the ISP and infringed the privacy of the ISP’s customers, by concluding:
 Consequently, it must be held that, in adopting the injunction requiring the ISP to install the contested filtering system, the national court concerned would not be respecting the requirement that a fair balance be struck between the right to intellectual property, on the one hand, and the freedom to conduct business, the right to protection of personal data and the freedom to receive or impart information, on the other.
 In the light of the foregoing, the answer to the questions submitted is that Directives 2000/31, 2001/29, 2004/48, 95/46 and 2002/58, read together and construed in the light of the requirements stemming from the protection of the applicable fundamental rights, must be interpreted as precluding an injunction made against an ISP which requires it to install the contested filtering system.
(via Boing Boing)