EU judges set Belgian court straight on filtering

The Treaty on the Functioning of the European Union - once the Treaty of Rome - provides that the Court of Justice of the European Union "shall have jurisdiction to give preliminary rulings concerning... the interpretation of the Treaties" (Article 267). It is interesting to bear this definition of its jurisdiction in mind when considering the decision handed down today in Case C-70/10, SABAM v Scarlet Extended SA, referred from the Belgian court.

It was in 2004 that SABAM, a music collecting society, obtained a decision from the Brussels Tribunal de première instance entitling it in principle to an injunction against Scarlet, an ISP, requiring it to prevent the mass pirating of works of its repertoire through peer-to-peer file-sharing. In 2007, following a report by a court-appointed expert and some procedural wrangling, a further judgement was handed down which required the ISP to implement a filtering mechanism based on (highly accurate) fingerprinting technology (the method specifically considered was that of Audible Magic). The Belgian courts approached the whole case with a mixture of insouciance and common sense which was almost bound to lead to a reference, and so it did... 

The defendant appealed to the Cour d'Appel de Bruxelles, which in January 2010 referred to the EU Court certain questions of interpretation under Article 267 of the Treaty, namely whether the relevant Directives and the European Convention on Human Rights permitted a Member State to authorise a court to issue an injunction requiring an ISP "to install, for all its customers, in abstracto and as a preventive measure, exclusively at the cost of that ISP and for an unlimited period, a system for filtering all electronic communications, both incoming and outgoing, passing via its services, in particular those involving the use of peer-to-peer software, in order to identify on its network the movement of electronic files containing a musical, cinematographic or audio-visual work in respect of which the applicant claims to hold rights, and subsequently to block the transfer of such files"; and if so, do the Directives require the national court "to apply the principle of proportionality"? 

Today the EU Court handed down a brief judgment giving its answer. The implications of its lapidary remarks will reverberate through national courts in the coming years.

The EU Court confirmed that a national court may order an ISP to take action to terminate infringements and also to prevent future infringements (confirming that the principle expressed in the recent Case C‑324/09, L'Oréal and others, applies to copyright cases as it does to trade marks). However, the implementation of a filtering system would amount to the general monitoring of Internet traffic, contrary to Article 15 of the Electronic Commerce Directive. Also, as previously decided in Case C‑275/06, Promusicae, the protection of intellectual property under Article 17 of the European Charter of Fundamental Rights was not absolute, but had to be balanced against other fundamental rights, such as the freedom of Scarlet "to carry on a business" (Article 16, Charter). The injunction would require the ISP "to install a complicated, costly, permanent computer system at its own expense", was not subject to any limitation in time and applied to works not yet in existence.

Yet further, the operation of the system would involve a systematic analysis of all content and the collection and identification of users’ IP addresses. The addresses were protected personal data because they allowed those users to be precisely identified. The system might also block lawful communications, contrary to the freedom to receive and impart information (Article 11, Charter).

The Court concluded 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." The law must be interpreted as precluding "an injunction made against an ISP which requires it to install the contested filtering system".

The Court does not share with the reader its analysis of data protection law or the reasons why compliance with a court order would involve any infringement of the privacy rights of users (a matter of Belgian law). It also spares the national court the tiresome business of deciding on the facts whether the filtering system would unduly block non-infringing communications by the ISP's customers. It is hard to imagine the Belgian court's informing the EU Court that in reaching conclusions on these matters it had exceeded its jurisdiction; but perhaps there is somewhere a Bruxellois equivalent of the UK's late, lamented Mr Justice Laddie.

Given the fact-specific nature of the questions, right holders will not feel completely downcast by the outcome. The relief obtained by SABAM was always a bit too good to be true. However,  the Court's comments on monitoring, data privacy and freedom of expression create obstacles for deploying against piracy the ISPs' traditional, if unpublicised, methods of controlling their subscribers' behaviour.

Sarkozy reaffirms commitment to the Graduated Response

Attending the Forum d'Avignon on 18 November 2011, President Sarkozy gave a remarkably detailed and impassioned defence of le droit d'auteur and the lois HADOPI. He identified the proprietary nature of copyright as the root of the independence and dignity of the artist: without respect for copyright there would be no more creativity. Culture was fundamental to the French response to the economic crisis: unlike other countries, the government was seeking to increase investment, not cut it. It was necessary to reconfigure the economic model of creativity from A to Z and he was committed to doing so.

The President repudiated the arguments with which, he said, he had first been met when proposing the idea of  preserving respect for copyright: he would lose the election if he pursued such an unpopular line; and the battle against piracy was already lost in any case. These arguments had been shown false by events: he was elected president; after only a few months since the implementation of HADOPI, the level of peer-to-peer piracy had dropped by 35%; and day-by-day more countries were adopting comparable arrangements - the US, New Zealand, South Korea (interestingly, he failed to mention the UK). As technology developed, he was ready to consider introducing a third HADOPI law, in particular to address the problem of illegal streaming, which no one could justify.

The following day, 19 November 2011, the Conseil d'Etat handed down four decisions rejecting complaints brought against the constitutionality of certain decrees implementing the lois HADOPI. The complainant in three of the cases was the ISP, French Data Network; in one, various Apple companies. The same day the Elysée duly announced that the President of the Republic took note with pleasure of these decisions and the apparent reduction in piracy following introduction of HADOPI. 

Pirates and ISPs must presumably be hoping for a victory by François Hollande in the May 2012 presidential elections. It is hard to imagine a stronger or more public commitment to the Graduated Response than that of M. Sarkozy over recent days.

Site Blocking - UK, Finland and the USA

Wednesday, 26 October 2011 was an interesting day for ISPs and the protection of content online. 

On that day, Mr Justice Arnold gave his supplementary judgment in the Newzbin2 case in London, granting an injunction to require British Telecom to use IP address re-routing and DPI-based URL blocking to prevent access to the Newzbin2 pirate facilitator site. BT would have to cover the rather limited cost of implementation (£5,000, plus £100 for each revision of the black-list).

On the same day, the District Court in Helsinki ordered ISP Elisa to block access to the notorious BitTorrent file-sharing site, the Piratebay. It appears that the court directed Elisa to use both URL and IP-number blocking from 18 November, on pain of a 100,000 euro fine. Elisa says it will appeal. (The Court of Appeal in Antwerp also granted a blocking order (DNS blocking only) against the two leading Belgian ISPs on 26 September 2011.)

And in the US, Rep. Lamar Smith introduced his Stopping Online Piracy Act (H.R. 3261) in the House. Like its counterpart in the Senate (the PROTECT IP Act (RS. 968), the Act would allow the US Attorney General to bring an action against the registrant of a domain name relating to a foreign pirate site or the owner or operator of that site for an injunction to prevent the infringing activity. If served with that order, an ISP would have to "take technically feasible and reasonable measures designed to prevent access by its subscribers located within the United States to the foreign infringing site". 

Similarly, search engines would have to take "technically feasible and reasonable measures... designed to prevent the foreign infringing site that is subject to the order, or a portion of such site specified in the order, from being served as a direct hypertext link". Online advertising agencies or online payment processors would have to cease providing services to such sites. Right holders will be able to bring such actions against payment processors and advertising agencies, but not against ISPs and search engines.

None of these measures implements the Graduated Response as such, which tends to support the view that right holders have decided that site-blocking is a more appropriate or more pressing legislative intervention. As previously mentioned, in the US right holders have been able to agree a voluntary GR scheme with the major ISPs, something that has hitherto proved impossible elsewhere. At the same time, the rise of non-peer to peer sources of piracy such as Rapidshare and Megaupload has perhaps given site-blocking greater relevance.

One direct link to the GR, however, is an interesting aside by Mr Justice Arnold in his judgment of 26 October. Following the recent (and dubious) fashion for informal attempts by non-parties to influence proceedings in English courts, various people (including ISP TalkTalk) sent communications to the judge following BT's defeat. One, an alleged BT subscriber, applied to be sought to be joined as a respondent in the proceedings. 

That applicant made various submissions, including that "a form of order that is more targeted at infringers should be adopted". He proposed "a system of warning notices to subscribers inspired by the Digital Economy Act 2010 and Ofcom's draft Initial Obligations Code." Arnold J said: "I doubt that an order in that form would comply with the United Kingdom's obligations under Article 8(3). In any event, BT has not suggested that such an order should be made in preference to the order sought by the Studios and I have already decided to make an order substantially in the form sought by the Studios." 

The judge's remark that a GR system would not rise to the level of the relief to which a right holder is entitled under Article 8(3) of the 2001 Directive is interesting. It suggests that even if ISPs cooperate in the much-delayed implementation of the UK's the Digital Economy Act, they will still find themselves hauled into court to block pirate sites. Perhaps this will be an incentive to them to craft a voluntary scheme in cooperation with right holders that represents a commercial settlement of all aspects of the content protection issue. However, UK ISPs had the opportunity to agree a system of Graduated Response back in 2007-8 when the Motion Picture Association reached out to them. Ultimately, they preferred conflict to compromise. TalkTalk's attempt to intervene (without intervening) in the Newzbin2 case suggests that that remains their preference.

HADOPI - Bon Anniversaire?

Today the Haute Autorité pour la Diffusion des oeuvres et la protection des droits sur Internet, universally known as Hadopi, published its first "Rapport d'Activité", detailing the activities of the agency over the last 18 months. An imposing 148 pages, the report describes the history, activities and legislative background of Hadopi, charged with the implementation in France of the Graduated Response, land of its birth. 

Hadopi began sending notifications to suspected infringers on 1 October 2010, so the Réponse Graduée is now 1 year old. The scale of Hadopi's activities is considerable. In the period 1 October 2010 to 30 June 2011, it was notified of 18,429,234 alleged infringements by right holders, an average of 71,613 per day. It made 1,023,079 requests to ISPs to identify subscribers, of which 911,970 were identified. The 11% of cases in which there was no identification is put down to various causes, such as duplications resulting from changed dynamic IP addresses. 470,935 "first notices" were sent out and 20,598 "second notices". It does not appear that any subscribers have yet been referred to the Public Prosecutor following a third detection.

The report provides data on the evolution of the notice-sending effort. Having begun in September 2010 with a few hundred identification requests to ISPs, from 18 October 2010 Hadopi sent some 2,000 requests a day to ISPs, stepping up to 4,500 a day on 20 January 2011. From 12 May 2011, the Authority was sending 11,500 identification requests per day. These figures are an indicator of the capacity of ISPs to handle volumes of requests.

Hadopi has carried out public surveys on its work. In late March 2011, 41% of Internet users who were at all aware of Hadopi's existence said that the agency's existence encouraged them to change their activities online. This was an increase of 16% on a similar survey carried out by Hadopi in late October/early November 2010. Of those admitting unlawful Internet use, 44% said that they were very much or somewhat encouraged to change their behaviour as a result of Hadopi. The Secretary General of Hadopi, Eric Walter, suggests that these results are consistent with industry figures showing a decline in peer-to-peer infringement, but whether this is because absolute levels of infringement are falling or rather that users are moving to other methods of infringement remains to be determined. The agency is developing its statistical and technical efforts to obtain more informative data and a quantitative assessment is promised for the agency's second report. 

Much more could be drawn from the report, for example as to the agency's programme of issuing "labels" of approval for legitimate content sites. The scale and detail of the French effort is remarkable, whatever one thinks of its value.

UK DEA creeps forward without site-blocking

Yesterday the UK Government published its response to the report of the Hargreaves Review of Intellectual Property and Growth. Though more persuasive than the report itself, the response essentially accepts the Google-inspired reforms proposed by Hargreaves. Without irony, the response prefaces its radical proposals by saying, "The Review identifies two particular difficulties in the IP field: a near-total lack of high-quality evidence on some issues and an overabundance of effective lobbying." Your lobbynomics, my evidence...

Apart from expressing a general disdain for enforcement, however, Hargreaves (and hence the response) had little to say about the Digital Economy Act, the basis for the impending UK Graduated Response. One point does emerge, however: following receipt of a hand-wringing study by OFCOM, the Government will not bring into force the site-blocking provisions of the DEA. Given the reputed opposition of the security services, this blogger always expected the section to remain a dead letter, and so it has proved. (One wonders whether they will seek to undermine the use of section 97A of the 1988 Act for the same purpose.) 

As a consolation, the Government indicates in its new IP Crime Strategy that the UK Intellectual Property Office will "draw together existing work and develop an action plan on tackling counterfeiting and criminal piracy online", including pirate web sites. Given the substantial failure of the 2004 IP Crime Strategy, blamed by some on the UK IPO's lack of enthusiasm, right holders may find this less than reassuring.

Most important for this blog was the paper also published yesterday by the Department of Culture, Media and Sport: Next steps for implementation of the Digital Economy Act. This contains the welcome news of a change of position on subscriber appeals. It is now intended that there will a returnable £20 fee for the making of an appeal against a notification letter. This should discourage vexatious appeals. 

Traditionally the friend of the content industries, DCMS adopts a more positive tone towards the concerns of the copyright sector. It states that OFCOM's initial obligations code (the implementation of the notification system) will be published "soon". DCMS hopes that the first notification letters will be sent to subscribers "by the end of 2012".

English High Court orders BT to block Newzbin2

Yesterday Mr Justice Arnold handed down his decision in Twentieth Century Fox Film Corp & ors v British Telecommunications plc [2011] EWHC 1981 (Ch), ordering the UK's incumbent ISP to block access to the pirate Newzbin2 site. Newzbin was a commercial web site that facilitates access to pirated films, music, games and books on Usenet. In a decision of 29 March 2010, the High Court had held that the site owner was infringing copyright by making pirated files available to the public from newsgroups, by authorising infringements by downloaders from Usenet and by engaging in a common design to infringe with the site's users (Twentieth Century Fox Film Corp & ors v Newzbin Limited [2010] EWHC 608 (Ch)). The site disappeared, only to pop up again hosted outside the UK as Newzbin2, allegedly under new management.

The MPA Studios accordingly sued BT under section 97A of the UK's Copyright, Designs and Patents Act 1988 for an order requiring the blocking of access by BT's subscribers to that site. Yesterday Arnold J gave the victory to the studios, effectively ordering BT to add Newzbin2 to the list of sites it blocks using its Cleanfeed service. Culture Minister Ed Vaizey tweeted his view that this would benefit the creative industries.

This decision must smooth the path to a voluntary site blocking regime in the UK - much to the Minister's relief.

ECJ decision on trade marks gives boost to GR

Yesterday the Court of Justice of the European Union handed down its decision in a reference from the UK High Court: L’Oréal & ors v eBay International AG and ors (Case C‑324/09). Although a trade mark case, it has great significance for the Graduated Response in Europe.

The trade mark owners objected to the sale of unlicensed products on eBay and eBay’s use of their marks as Google adwords. The Court answered 10 complex questions posed by Arnold J following his decision of 22 May 2009 ([2009] EWHC 1094 (Ch)), most of them relating to the nature of trade mark infringement online.

The final question related to Article 11 of the IP Enforcement Directive 2004/48/EC, which provides that: “Member States shall … ensure that rightholders are in a position to apply for an injunction against intermediaries whose services are used by a third party to infringe an intellectual property right, without prejudice to Article 8(3) of Directive 2001/29/EC." 

This provision extends to all holders of IP rights the injunctive remedy against intermediaries (such as ISPs) accorded to copyright holders under Article 8(3) of the 2001 Copyright Directive.

The Court of Justice held that Member States must provide for the grant of injunctions against intermediaries to prevent future infringement, not merely to terminate specific, existing infringements. The measures that an intermediary could be required to undertake could not amount to an obligation of general monitoring, which would be contrary to Article 15 of the Electronic Commerce Directive 2000/31/EC. However, it could involve suspending the user’s access:

141 … if the operator of the online marketplace does not decide, on its own initiative, to suspend the perpetrator of the infringement of intellectual property rights in order to prevent further infringements of that kind by the same seller in respect of the same trade marks, it may be ordered, by means of an injunction, to do so.

It is difficult to imagine that the Court would come to a different conclusion in relation to the equivalent provision in the Copyright Directive. The effect is to give a boost to EU right holders seeking to agree Graduated Response systems with ISPs. They can now say with credibility that if the ISPs will not agree to a voluntary system, they can effectively force them to operate such a system through the courts.

The fact that the UK seems to have failed to implement Article 11 of the IP Enforcement Directive is another matter (though from his judgment it does not seem as if Arnold J will let that stand in his way). The UK clearly did implement Article 8(3) of the Copyright Directive in section 97A of the Copyright, Designs and Patents Act 1988. Judgment in the pending action by the MPA studios against British Telecom for such an injunction was delayed in anticipation of this very decision of the Court of Justice.

Major US ISPs agree to Graduated Response

On 6 July 2011 the representatives of the US film industry (both majors and independents) and the US record industry reached agreement with the leading Internet service providers on the "Copyright Alert System", a voluntary Graduated Response scheme to tackle illegal file-sharing. The agreement envisages two educational messages or "alerts", followed by two messages which require acknowledgement by the subscriber. Following a fifth detected infringement, one or two "Mitigation Measures Copyright Alerts" will be sent, the last notifying the subscriber that, after a period of up to 2 weeks, technical measures will be applied to his Internet access account. The participating ISPs are AT&T, Verizon, Comcast, Cablevision and Time Warner Cable. The parties have set up a "Center for Copyright Information", which will administer the scheme.

The technical measures comprise reduction of transmission speeds, reduction to the lowest available broadband service, imposition of a landing page requiring contact with the ISP or the completion of some kind of copyright education process, "temporary restriction of the Subscriber's internet access for some reasonable period of time" - or an equivalent measure devised by the ISP.

The scheme is carefully conceived to avoid any suggestion that it will result in disconnection or the disclosure of subscriber names or addresses - though the latter will remain possible through discovery proceedings. The ISPs will provide anonymised lists of notice recipients on a monthly basis. Interestingly, the system provides for confidential scrutiny of the technical procedures used by right holders to generate notices and envisages the possibility of an independent review (against a refundable $35 fee) of the application of "mitigation measures" under conditions of anonymity for the subscriber. In other words, the agreement has been designed to prevent errors and injustices - and bad PR.

Clearly the agreement builds on the exhaustive UK dialogue with ISPs which ultimately led to the Digital Economy Act 2010. In turn, the elaborate provisions for independent review of alerts may inspire the design of the appeal procedure in other countries. As a voluntary scheme, the Copyright Alert System may enter into operation a little more smoothly than the DEA.

Hargreaves: the Gospel according to Google

Professor Ian Hargreaves did a good job for the Welsh Assembly Government with his 2010 report on the creative industries, "The Heart of Digital Wales". In it, he had cited without disapproval Lord Carter's "Digital Britain" agenda, which included "Strong policies to protect intellectual property from piracy".

Something must have happened in the meantime, as the Professor's "Review of Intellectual Property and Growth", published on 18 May 2011, says of online enforcement merely that the "strong online enforcement measures made possible by the Digital Economy Act should be carefully monitored so that the approach can be adjusted in the light of evidence." The sceptical tone of the Review on enforcement is clear. Obviously any "adjustment" of the Act would be in the direction of weakening it, as requested the more hysterical anti-copyright interests, such as TalkTalk (Review submission: "increased enforcement will discourage innovation and growth").

While the Review disparages creative industry statistics as "lobbynomics", the Professor has little time for the evidence his own Review commissioned, such as the PACEC report on licensing in the VoD sector (reporting industry opinion that, e.g., "copyright issues rather than limiting growth had helped to stimulate it"). The Review's executive summary claims that the evidence for damage caused to industry by piracy is conflicting and uncertain, asserting that "[e]stimates of the scale of illegal digital downloads in the UK ranges [sic] between 13 per cent and 65 per cent in two studies published last year." Yet it apppears from the Review's own account of these statistics that he is confusing the number of downloaders with the number of downloads. In fact, repeated surveys in the UK and Germany are remarkably consistent in their estimates of the prevalence of illegal downloading.

All this is worrying for the future implementation of the Graduated Response in the UK, for which the enthusiasm of the coalition Government already seems doubtful.

UK Digital Economy Act 2010 survives judicial review

Today judgment was handed down in the judicial review proceedings brought by ISPs BT and TalkTalk, seeking to strike down the UK's Digital Economy Act 2010. The hearing took place over four days, finishing on 28 March. The judge, Mr Justice Kenneth Parker, has shown admirable industry in completing his 71 page judgment, which is really a tour de force, so swiftly. 

The judge works his way through the claimants' various complaints, dismissing them in a largely convincing fashion. In relation to the draft Costs Order, which would impose on ISPs and right holders the costs of OFCOM and the proposed appeals body, the judge held that the proposed order was incompatible with Art. 12 of the Authorisation Directive. Otherwise the Act survived, the judge rejecting arguments that it was disproportionate and contravened the Electronic Commerce, Privacy and Electronic Communications and Authorisation Directives. It gratifying to see convincingly squashed the bogus arguments about data privacy that have for so long been trotted out by ISPs. 

TalkTalk's spokesman today claimed magnificently that they would "continue fighting to defend our customers' rights against this ill-judged legislation". If you read TalkTalk's submission to the Hargreaves IP Review, one could be forgiven for suspecting that their real concern is the price they have to pay for music.

Unless there is to be an appeal, the various stakeholders must return to the dull business of trying to thrash out workable arrangements to put into effect what the legislature overwhelmingly approved.

New Zealand passes robust Graduated Response legislation

Yesterday, 13 April 2011, the Copyright (Infringing File Sharing) Amendment Bill was approved by the New Zealand Parliament (video here), amending the 1994 Copyright Act. Although the Government was bitterly criticised by the Green Party during the debate, the main parties supported the Bill, resulting in 111 votes in favour and only 11 opposed. At Third Reading the Government introduced certain amendments, including the pushing back of commencement to 1 September 2011.

Under the amended Copyright Act, right holders will be entitled to require ISPs to notify subscribers of detected infringements. After 3 notices, the right holder will be able to bring the subscriber before the Copyright Tribunal, claiming payment of a penalty of up to $NZ 15,000. 

The Act also makes provision enabling the right holder to sue in the District Court for an order requiring the subscriber's ISP to suspend his Internet access for up to 6 months. However, the Government has to some extent deferred to activist and ISP opposition by agreeing to suspend implementation until the effectiveness of the Copyright Tribunal system has been established. The relevant provisions can be brought into effect by Order in Council.

As a result of review in Committee, the Act adopts a more limited definition of file-sharing than that originally proposed. It now applies only to cases where "material is uploaded via, or downloaded from, the Internet using an application or network that enables the simultaneous sharing of material between multiple users; and ... uploading and downloading may, but need not, occur at the same time." This would seem effectively to cover peer-to-peer infringement, but not the rapidly growing problem of cyberlockers, such as Rapidshare or Megaupload. These services, hugely used for piracy, are one-to-one user-server applications. As they do not enable sharing "between" multiple users, they seem to fall outside the definition.

This robust scheme seems likely to provide a testbed for GR under a common law system, as the UK's Digital Economy Act limps on towards an unknown destiny ...

Graduated Response à la belge

In January a Bill was presented in the Chamber of Representatives (Lower House) containing provisions to enhance copyright protection on the Internet, including a graduated response system. Bill 53/1120/01, sponsored by members of the French-speaking Liberal Party (Mouvement Réformateur).  If it passes, Belgium would become the third European country to pass GR legislation. However, the Bill has provoked a strong campaign by the so-called Net Users’ Rights Protection Association (NURPA). Anti-copyright blog EDRI claimed on 23 March 2011 that the Bill’s sponsors have agreed to suspend their proposal for an indefinite period.

The Bill proposes that ISPs would be required in their contracts with subscriber to state that creative works are protected by copyright, to warn of the negative cultural and economic effects of piracy and to describe the GR provisions of the Bill (Art. 5). The contract would also advise the subscriber as to the need for securing his Internet access against intrusion and point the subscriber to a web site, to be set up under the Bill by a newly-formed Council for the Protection of Copyright on the Internet, listing sources of licensed content. The Bill appears to impose extended collective licensing for the communication to the public of works online, on the model of cable retransmission right (Art. 8).

The key provision on GR is Art. 14, which prohibits subscribers from using their Internet access for the purposes of up- and downloading of protected works or services without licence. It is envisaged that investigative officers authorised by the State will detect infringements and require disclosure of name and address details from service providers. On the first infringement, the officer sends a warning letter to the subscriber. In case of a second infringement within 6 months, the officer sends a second letter offering the subscriber the opportunity to pay a fine to conclude the case (Art. 17). The subscriber can appeal to the Minister – so this is an administrative, rather than a judicial process.

In the event of a third infringement within 2 years, the officer reports the matter to the Public Prosecutor, who may take such action as he thinks fit. The court may impose a fine of 100 to 1,000 Euros, and, depending on the circumstances of the case, can impose a limitation on the subscriber’s Internet access. It appears that what is contemplated is that the ISP would be required to reduce the subscriber’s bandwidth to a level that would render file-sharing difficult. If the subscriber moves to another ISP, the new ISP must respect the limitation imposed. If there is yet another infringement within a period of 3 years, the maximum fine is doubled and Internet access may be suspended altogether (but leaving intact any telephony or television services). Failure by an ISP to respect the terms of a limitation or suspension of access may be visited with a fine of up to 2,000 euros.

The Council for the Protection of Copyright on the Internet would seem essentially to be an advisory body, receiving reports of cases and providing advice to Government – a much lighter structure than the French Haute Autorité.

Even if the blog reports are right, it is hard to imagine that we have heard the last of the Réponse graduée à la belge…

Italy deliberates on online content protection

Today the deadline expires for responses to a consultation by the Autorità per le Garanzie nelle Comunicazioni (AGCOM) on the protection of copyright online. Issued on 17 December 2010, the consultation paper sets out AGCOM’s proposals to address online piracy. The paper describes a notice and takedown procedure which would give pirate sites 48 hours to take down infringing material which, in default of takedown, would be followed by an investigation and possible decision by AGCOM.

AGCOM also proposes that where sites are wholly devoted to pirate content or are situated abroad, then in extreme cases it could initiate adversarial proceedings leading to the blocking of the site by ISPs. Although the paper makes reference to the abortive discussions in the UK in 2008 pursuant to the “Memorandum of Understanding” (arguably an ironic title, as it turned out), it does not mention its similarly unsuccessful equivalent in Italy, the “P@tto di Sanremo” of March 2005. Under the Sanremo Pact, Italian ISPs and right holders agreed various actions to prevent online piracy and promote online content. The Pact contemplated the taking of measures by ISPs against Internet piracy and the establishment of contractual terms for the termination or suspension of subscribers for breach of copyright.

The consultation paper does not mention the Graduated Response, which would seem off the agenda in Italy. By way of alternative solution, AGCOM proposes extended collective licensing. The scheme would allow consumers to subscribe to an Internet access account with a licence attached permitting downloading. According to AGCOM, contracts should permit the sharing of such content (“i contratti dovrebbero garantire l’autorizzazione per determinati utilizzi online di opere protette, quali la riproduzione o la messa al disposizione del pubblico nel quadro di attività di file sharing.”)

One assumes that AGCOM has received a fair number of submissions explaining that a licence for public communication in Italy would effectively be a global licence.

The Cost of Cybercrime

Today the UK Government and information technologists Detica published a report on "The Cost of Cybercrime". The Report puts the annual cost to the UK economy of different sorts of Cybercrime at £27bn.

The largest component is IP theft, which is said to cost £9.2 billion per year. While it is good to see an attempt to raise awareness of the damage caused by illegal activity online, the figures in this brief document do raise some questions. In particular, when it splits out the losses from IP theft to different industries, the Report seems to indicate that losses to "Media" are negligible and those for "General retailers" are nil. Earlier research by IPSOS-MORI and others has indicated that losses to the audiovisual sector alone are in the £100s of millions: http://www.ukfilmcouncil.org.uk/copyrighttheft.

It is not clear whether the Report takes into account the contribution to UK GDP from Cybercrime. After all, a proportion of ISP profits come from broadband access subscribers whose Internet use is principally for infringement. Given that we have pretty clear data on the use of the Internet for infringement, it would not be too difficult to estimate the contribution to ISP profits from infringers.