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20/09/2011

Copyright in the digital age: Internet Service Providers as surrogate policemen?
Tom Ohta

The importance of ensuring adequate protection for intellectual property rights (IPRs) has been highlighted in recent high-profile reviews conducted at both national[1]and European levels.[2]One particular area of concern is copyright protection in a digital environment where electronic copies of works can be made and distributed almost instantaneously from virtually anywhere in the world, usually for no cost and without leaving any physical trace of the infringement. The development of technologies such as Peer-to-Peer (P2P) file-sharing which enables rapid dissemination of large files such as films poses significant challenges to rightholders seeking to protect and enforce their rights. As well as government recognition of the need to adapt the legislative and regulatory framework to the digital age by introducing  measures such as the Digital Economy Act 2010, recent decisions by both national and European courts reflect a growing judicial trend of imposing greater responsibility upon intermediaries, in particular, the Internet Service Providers (ISPs).
 
This article considers whether legislative changes and recent judicial decisions in dealing with online “piracy” have now resulted in rightholders having greater means for protecting and enforcing their rights in the digital environment.
 
Whilst not all P2P file-sharing is illegal, it is undoubtedly used to facilitate copyright infringement on a massive scale. The most popular P2P file-sharing protocol, BitTorrent, is claimed to have 100 million active users worldwide who make 400,000 daily downloads on average.[3]Rightholders have thus sought to shut down P2P file-sharing sites with some success[4], although many P2P sites continue to operate with millions of users worldwide.[5]However, even where rightholders succeed in establishing a website’s liability for copyright infringement, they can face difficulties in enforcing a judgment and therefore an effective remedy as the claimants found out in 20th Century Fox v Newzbin.[6]In this case, the claimant’s failure to obtain an effective remedy resulted in a second action targeting the ISPs as an alternative means of enforcing its rights and a subsequent landmark decision from the High Court (20C Fox v BT[7]) compelling the UK’s largest ISP (BT) to enforce its ‘Cleanfeed’ website-blocking technology to prevent subscribers accessing the Newzbin website. This was the first instance of an English court granting such an order under s.97A of the Copyright Designs and Patents Act 1988 (“CDPA”).
 
The decision in 20C Fox v BT reflects a judicial acknowledgement of the difficulties faced by rightholders in taking direct action against websites and marks a positive development by establishing that whilst ISPs are not liable for infringing acts carried out by their subscribers, they can, nonetheless, be compelled to take technical measures, such as blocking access to a specific website, to prevent acts of infringement. The significance of the decision is augmented by the Government’s recent decision in August 2011 not to enact regulations on site-blocking provisions which had been envisaged under the Digital Economy Act 2010 (the “DEA”).[8]Accordingly, since rightholders currently have no ability to obtain site-blocking injunctions under the DEA, the only option is to bring an application under s.97A CDPA.
 
Rightholders who consider taking similar action will however need to consider a number of factors that may affect their likelihood of succeeding in obtaining such a remedy from the court.
 
Firstly, rightholders will need to show that the website in question is infringing its rights e.g. by authorising or procuring infringement of copyright by the end-users or through unauthorised communication of the copyright work to the public. This is a question of fact in each case and applicants will need to adduce substantive supporting evidence.
 
Secondly, it should be considered what proportion of the works being made available by the target website is owned or controlled by the rightholder making the s.97A application. It is likely to increase the rightholder’s prospect of success in obtaining a site-blocking order if this proportion is high.[9]This is because a site-blocking order may deny access to any part of a website, including access to content in which the claimant holds no rights. Where the rightholder’s works only form a small proportion of the entire works contained within the website, the court may consider it disproportionate to grant a site-blocking injunction that prevents access to the entire site. 
 
Thirdly, it is necessary to ascertain what technical measure is most appropriate in the circumstances to prevent copyright infringement. It may be that a site-blocking injunction is inappropriate where faced, for example, with P2P file-sharing on private networks that can be facilitated through any number of websites. In such situations, it is likely that a more sophisticated technical solution is required such as filtering systems that can detect the unauthorised transfer of copyright works using P2P file-sharing software. Whether the technical measure sought in the s.97A application is capable of reducing the likelihood of future infringement will be a question of fact in each case.
 
Fourthly, the scope of the order sought under s.97A should not adversely affect fundamental rights, such as the protection of personal data, privacy of electronic communications and the freedom of expression. The CJEU is currently considering a preliminary reference from the Court of Appeal in Brussels on whether it is legitimate to grant an order against an ISP compelling it to introduce a P2P filtering system that is purely preventive, exclusively at the cost of the ISP and for an unlimited period.[10]The CJEU’s decision is expected later this year or early next year and will hopefully provide national courts with guidance on the scope of injunctions under s.97A CDPA in P2P file-sharing cases.

Finally, proportionality is an important consideration. For example, what are the likely cost implications for the ISP? Ideally, rightholders would seek to rely on existing technologies already implemented by ISPs in the order sought under s.97A. This could provide persuasive grounds for arguing that it is technically feasible for the ISP to apply an existing technical solution against a new target and that doing so should only result in modest costs. These were relevant considerations in the High Court’s decision to grant the order against the ISP in 20C Fox v BT. However, where rightholders seek to obtain an order compelling an ISP to implement new technical measures, it will need to show why this is justified.[11]Again, the issue of cost is likely to be relevant in the court’s determination of the matter as it has a bearing on proportionality. It remains to be seen whether applicants who successfully obtain orders against ISPs under s.97A CDPA will generally be held responsible for paying the legal costs incurred by the ISP.[12]The outcome of the costs hearing in 20C Fox v BT listed for October 2011 is therefore keenly awaited.
 
In conclusion, it is clear that copyright infringement will continue to be “a stubborn fact of the digital landscape”.[13] However, in tackling the problem, rightholders can take some comfort in the knowledge that the challenges posed by the digital environment to the adequate protection of IPRs are being seriously considered at an international level. The European Commission has recently announced a review of the IPR Enforcement Directive[14] in 2012 with the aim of creating a legislative framework that is more effective in combating IPR infringement facilitated via the internet by fostering cooperation with intermediaries such as ISPs.[15] As shown in 20C Fox v BT and L'Oréal v eBay[16], the English and European courts are already beginning to place more responsibility upon ISPs where they know that their services are being used for infringing acts. When assessing the future role of ISPs, both legislators and courts face the difficult task of carefully balancing the various fundamental rights which are engaged, such as the rights to private life, protection of personal data, freedom of expression and information and to an effective remedy. Whilst longer term developments take shape at a legislative level, it will be interesting to see how rightholders use s.97A CDPA applications as a means of indirectly protecting their rights in this challenging and rapidly moving digital environment.


[1]
In November 2010 the Prime Minister announced an independent review of how the Intellectual Property framework supports growth and innovation. Chaired by Professor Ian Hargreaves and assisted by a panel of experts, the review, entitled, “Digital Opportunity: A review of Intellectual Property and Growth” reported to the Government in May 2011.
 
[2]European Commission communication entitled, A Single Market for Intellectual Property Rights: Boosting creativity and innovation to provide economic growth, high quality jobs and first class products and services in Europe. COM(2011) 287 final.
[4]Napster, Limewire and Supernova are some examples. However, many end-users seeking illegal downloads have migrated to other sites that fill the void – the so-called ‘Hydra effect’

[5]
The Pirate Bay is one notable BitTorrent site with over 5 million users worldwide, described by the Los Angeles Times as “one of the world's largest facilitators of illegal downloading”. D. Sarno, “The Internet sure loves its outlaws” – Los Angeles Times (29 April 2007)

[6]
20th Century Fox v Newzbin Ltd [2010] EWHC 608

[7]
Twentieth Century Fox Film Corporation & Others v British Telecommunications PLC [2011] EWHC 1981 (Ch)

[8]
This was in light of an Ofcom report  which found that the mechanism for securing a blocking injunction under the DEA was inadequate and too slow when compared to the procedure already available under s.97A CDPA. See “Site Blocking” to reduce online copyright infringement: A review of sections 17 and 18 of the Digital Economy Act” Ofcom (27 May 2011)

[9]
In 20C Fox v BT, over 70% of the content on the website related to TV and film, a large proportion of which were owned or controlled by the six claimants.

[10]
Case C-70/10 Scarlet Extended SA v SABAM

[11]
It is interesting to note that whilst many ISPs in other jurisdictions already apply certain technical measures against P2P file-sharing, such as limiting the bandwidth used by BitTorrent traffic, none of the major UK ISPs currently prevent or filter downloading of BitTorrent-specific files that can result in widespread copyright infringement. In part, this is perhaps down to the fact that BitTorrent is also used for legal file-sharing and a blanket prohibition of BitTorrent traffic is a blunt tool that discriminates against legitimate users.

[12]
This is how costs are assessed in ‘Norwich Pharmacal’ applications against ISPs to divulge information about individuals behind IP addresses associated with infringing activity.

[13]
As recognised by Professor Hargreaves in his independent review, Digital Opportunity: A Review of Intellectual Property and Growth (May 2011), p.76, para 8.23

[14]
2004/84/EC

[15]
A Single Market for Intellectual Property Rights Boosting creativity and innovation to provide economic growth, high quality jobs and first class products and services in Europe” COM(2011) 287 final, Paragraph 3.5.3 at p. 19.

[16]
Case C-324/09


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