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…