Fieldfisher

Coping with copyright

Question

Who is responsible for preventing online copyright infringement?

Answer

File-sharing websites, on which users upload copyrighted content such as music, films and TV programmes, without the copyright owner's consent, for mass distribution and use by others, have become increasingly widespread in recent years. Yet the practice is, undoubtedly, illegal and causes huge financial losses for the entertainment industry. Rights holders, the courts and Parliament alike are currently trying to create an enforceable legal system which can offer adequate protection and keep up with technological advances.

A person infringes copyright by doing any of a number of specified acts (listed in Section 16 of the Copyright, Designs and Patents Act 1988 (the CPDA)) without the consent or licence of the copyright owner. These acts include copying a copyright work, issuing copies of the work to the public and communicating the work to the public. Communication to the public includes making a work available by electronic transmission.

There are at least three parties against whom proceedings can be brought, as follows.

Website users

Although suing individuals for copyright infringement is the most obvious legal solution, it is unfortunately the least practical. It would be unrealistic, slow and expensive for rights holders to pursue every infringer and, given the number of people engaged in online infringement, it is difficult for them to bring enough cases to make an impact. This said, in the last decade or so, several thousand cases have been brought in the United States, against a seemingly random selection of users, although perhaps the continued spread of digital piracy is evidence in itself of the limits of this approach. A very small number of successful prosecutions have been brought in the United Kingdom, such as Topware Interactive v Barwinska (2008) which related to the distribution of a video game and, in April 2011, the criminal conviction of Anne Muir in Scotland for illegally sharing music online.

Responsibilities of website users are likely to be affected by the Digital Economy Act 2010 (the DEA). However, the introduction of this legislation has been plagued by delays. BT and TalkTalk brought a largely unsuccessful judicial review of the DEA, which they will be appealing this month, inevitably causing further delays. When the DEA is eventually implemented, repeat infringers will find themselves receiving warning letters and then facing possible action under the provisions of the legislation.

Website operators

It can be more effective for rights holders to bring proceedings against the operators of a website than against individual website users, as an entire website being removed clearly has a greater impact than simply one user being barred.

Authorising another person to do a restricted (and infringing) act without the licence of the copyright owner is illegal under Section 16(2) of the CDPA. The Newzbin 1 Case (Twentieth Century Fox Film Corporation and others v Newzbin Limited (2010)) was one of the first UK cases to consider this in an internet context. The High Court ruled that the Newzbin file-sharing website had infringed the copyright of Twentieth Century Fox and granted an injunction to prevent further infringement.

It should be noted, however, that much in the Newzbin 1 Case turned on its particular facts, including the nature of the technology involved and the site operators' knowledge that much of the material was protected by copyright. Additionally, bringing proceedings against website operators involves significant evidential and practical difficulties, and it can be almost impossible to prevent a website which is removed from simply being re-launched, perhaps in a different guise.

Indeed, soon after the disappearance of the Newzbin site, the site operators went into voluntary liquidation and the site reappeared, using Swedish servers and on a website registered in Singapore. With the new operators unknown and out of reach, the studios therefore turned their attention to the internet service provider and brought proceedings against BT instead.

Internet service providers

For the reasons outlined above, the current focus, in both litigation and legislation, is on placing obligations on internet service providers (ISPs) to monitor and prevent copyright infringement.

Section 97A of the CPDA allows the court to grant an injunction against a service provider, where that service provider has actual knowledge of someone using their service to infringe copyright.

Article 15(1) of the Ecommerce Directive 2000 provides that member states must not impose a general obligation on ISPs to monitor the information which they transmit or store, nor a general obligation to actively seek facts indicating illegal activity, if they are only acting as mere conduits, caches or hosts of information (and provided that they comply with various requirements).

Guidance on the scope of ISPs' monitoring obligations has been provided in the case of L'Oreal v eBay (2009) which was a referral to the CJEU following proceedings brought by L'Oreal arising from concern about the sale of counterfeit L'Oreal products on eBay. The CJEU concluded that there should be no hosting defence for intermediaries who play an active role (ie, promoting offers) or for intermediaries who play a passive role but are aware of facts or circumstances which would have alerted diligent economic operators to the illegality and fail to act expeditiously to remove or disable access to the infringing content.

It is therefore clear that, albeit to a limited extent, ISPs run the risk of being held to have constructive knowledge of unlawful activity. However, an important point to note is that the hosting exemption in the Ecommerce Directive only shields intermediaries from liability for damages claims and does not prevent rights holders from seeking injunctions against intermediaries. In fact, member states are expressly required to ensure that such injunctive relief is available.

The United Kingdom's first successful site-blocking injunction against an ISP was granted in the Newzbin 2 Case  (Twentieth Century Fox Film Corporation and Others v British Telecommunications (2011)), which resulted from the reappearance of the Newzbin website which had been removed in Newzbin 1.

Newzbin 2 was a fairly unique case, in that the website had already been proven (in Newzbin 1) to be infringing copyright. Additionally, almost all the content on the website was infringing and BT was only required to extend its existing systems rather than having to adopt new technology. When granting the injunction, the court specified the precise blocking technology which would be used, in order to avoid imposing too general an obligation (in conflict with the Ecommerce Directive Article 15(1) exemption).

A more recent ruling of the CJEU considered the scope of an injunction against a Belgian ISP (Scarlet Extended SA v Société Belge des Auteurs Compositeurs et Editeurs (2010)). It ruled that any injunctions must be proportionate and not unduly costly, and concluded that the scope of the injunction in question was so wide as to breach European law.

Certainly, obtaining an injunction against an ISP is not straightforward. Much depends on the scope of the injunction that the rights holders are seeking, the sort of blocking/filtering that the ISP would be forced to undertake, the cost and ease of implementation and whether the injunction would interfere with users' enjoyment of legitimate content.

Recognising this, it was originally intended that the DEA would include provisions for site blocking, thus negating the need for rights holders to pursue such an expensive and lengthy legal process. However, it has been widely acknowledged that the site-blocking provisions of the DEA were poorly drafted and unworkable. The Culture Secretary Jeremy Hunt has instead resorted to asking that search engines and ISPs take reasonable steps to impede access to sites which contain infringing content.

Conclusion

As explained above, online piracy is difficult to prevent. Nevertheless, new developments in this area are constantly occurring. A recent ruling in a US case (Elsevier Ltd & Others v Chitika Inc & Others) has even suggested that advertising networks could potentially be held liable for the infringing activities of websites on which they advertise, particularly if the networks have knowledge of the infringing activities, as the advertising income could be considered contributory infringement.

Only one conclusion can be reached with any certainty - watch this space!

Rebecca Fisher is a second-year trainee in the technology and outsourcing practice of Field Fisher Waterhouse LLP.

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Recent comments

Anonymous | 24/01/2012 20:15 PM

Does the author have any evidence for the suggestion that piracy causes 'huge financial losses for the entertainment industry'? If it's based on the number of illegal downloads multiplied by the price of each then her assertion is fallacious. This is because it assumes that each person who illegally downloaded the item would have purchased it legally if they couldn't (because of legal enforcement) have downloaded it illegally. The author gives absolutely no evidence for this and whilst it is likely that some would have paid for it the likelihood is that many wouldn't have done so.

Paul Gordon | 06/02/2012 17:43 PM

A very interesting article, thank you.