A founding mantra of the internet age is that online service providers – search engines, video hosts, blog platform operators – should not be liable for copyright-infringing content hosted by them until they are told about it.
The companies become liable if they are told about infringing material and do not act quickly to remove it, but their exemption until that point is what makes possible many of the services we take for granted.
A search engine, for example, cannot practically operate if it has to check what lies at the end of every link it serves. Video hosting site YouTube says that 24 hours' worth of footage are uploaded to it every minute, which makes monitoring almost impossible.
In Europe and the US the relevant laws say that providers with 'actual knowledge' of infringement must take material down. They also say, in effect, that those with constructive knowledge must do the same. But this is a more complicated concept.
And it is differing interpretations of this concept of constructive knowledge that lies at the heart of the growing gulf between the US and the EU.
Constructive knowledge exists when there are "facts or circumstances from which the illegal activity or information is apparent", according to the EU's E-Commerce Directive. The US law, the Digital Millennium Copyright Act (DMCA), says almost exactly the same, but courts there have clarified its practical meaning in a way that is yet to happen in the EU.
When TV giant Viacom sued Google, claiming that it should have known that so many unauthorised copies of its programmes appeared on Google-owned YouTube, it said that Google had constructive knowledge of the infringements.
Judge Louis Stanton threw out Viacom's case (30-page / 1.15MB PDF), but not before he went right back to records from US Congress and read what politicians meant when they wrote the constructive knowledge law. He said that he found that politicians had meant the term to refer to "knowledge of specific and identifiable infringements of particular individual items".
"Mere knowledge of prevalence of such activity in general is not enough," said Judge Stanton in his ruling. "General knowledge that infringement is 'ubiquitous' does not impose a duty on the service provider to monitor or search its service for infringements."
He was able to point to four other US judgments that clearly supported his view: Perfect 10 v CCBill, UMG Recordings v Veoh Networks, Corbis v Amazon and Tiffany v eBay.
European courts have not yet given hosts here such well-defined protection. In fact, constructive knowledge has not been much tested in the courts. One case caused short-lived upset, though.
In 2007, a French court ruled that a web host, Dailymotion, was liable for a user's upload because it was aware of facts and circumstances which suggested that infringing content was posted on its site, and therefore a complaint from the copyright owner was not necessary.
Fortunately for hosts, that ruling was overturned in 2009 when the appeal court said Dailymotion did not have the required knowledge of the infringing content.
Hosts in Europe are under threat, though, from other attempts to weaken their exemptions from liability for content they did not create. In 2007, again in France, Google was sued by Zadig Films, a documentary maker. The court agreed with Google that it was not responsible for initial uploads of Zadig material, which it took down quickly when informed about them.
The court did say, though, that Google was responsible for a failure to prevent repeat uploads of the material, even when not given specific notice of each instance.
Germany has a legal principle that could also erode the exemption from liability of web hosts – that of störerhaftung (meaning the liability of a "disturber" or "interferer"). It has been used in cases against online auction sites in Germany to prevent sales of fakes.
It may now be behind a Hamburg court's ruling that there "are some good reasons to think that YouTube indeed has some duty to take care of detecting illegal uploads". German collecting society GEMA had sought a preliminary injunction against YouTube in respect of 75 compositions, according to a court statement (2-page / 49KB PDF). It didn't get one, but a trial will consider YouTube's duties.
The E-Commerce Directive seems clear when it absolves hosts of material they are not responsible for.
It also gives hosts an explicit exemption from the general responsibility to monitor the use of their services for infringements.
That, too, seems to be under attack. In 2007 a Belgian court told ISP Scarlet to filter out copyright-infringing material after an authors' rights group SABAM said that it had some responsibility for its customers use of the ISP to engage in unauthorised file sharing.
More recently, politicians in Italy drafted a law that appeared to impose editorial responsibility on hosts like YouTube. Critics warned (2-page / 225KB PDF) that, if passed, the law would make it almost impossible to run such services. The law was amended before being passed in March this year, but its impact on intermediaries looks unclear at best. (The law is not connected to the curious convictions by an Italian court of Google executives in February.)
What does all this really mean for hosts and service providers operating in Europe? Well, what it certainly highlights is that they have none of the clarity that Judge Louis Stanton's Google and Viacom ruling gives to their position in US law.
It is not true to say that hosts' rights have been completely eroded. What these various cases mean, in the absence of a precedent-setting ruling on constructive knowledge, is that there is doubt about exactly what hosts' rights are.
And where there is doubt and uncertainty, there should be caution. It is impractical for ISPs, search engines, hosts and other service providers to monitor all use of their services, but without a clear signal from the courts on what their liabilities are, such companies will have to be more vigilant about the use of their services in Europe than in the US.
By Struan Robertson, editor of OUT-LAW.COM. The views expressed are Struan's and do not necessarily represent those of Pinsent Masons. You can follow Struan at Twitter.com/struan99.