Introduction• Internet and copyright :
opportunity & challenge• Scope of online piracy – Access to unauthorized music services : 28% of internet users globally (source IFPI Report 2012) – Global Impact of Online Piracy: • Between 30 and 75 billion dollars: global value of digital piracy (source BASCAP Report 2011)• Inadequacy of Court actions to thwart Online Piracy – From 2005-2008, RIAA launched more than 30,000 actions against internet users – Many Courts actions against unauthorized platforms (Napster, Grokster, Kazaa, etc.) – Limited impact on online piracy• Response of lawmakers in Europe and in the U.S. – a series of hastily written, uncoordinated and extremely unpopular regulations.• Outline of the present study – Presentation and critics of the reforms recently introduced and/or discussed in Europe and in the U.S. to crack down on online piracy – Alternative to legislative reforms : harmonization, enforcement and business-driven solutions
I. Outline and critics of
the main reforms recently introduced and/or discussed in Europe and in the U.S.A. Legislative reforms in Europe and in the U.S.: two approaches to online piracy 1. Cracking down on Internet Intermediaries a) SOPA (U.S. bill) b) OPEN (U.S. bill) c) ACTA (International Treaty) d) LeySinde (Spanish Law) e) AGCOM (Italian draft bill) f) Irish SOPA? (Irish reform of copyright law) 2. Cracking down on Internet users a) HADOPI (French law) b) DEA (UK law) B. Why they might not be the best way to tackle online infringement 1. Methodological issues 2. Substantial issues
1. Reforms/ draft reforms cracking
down on Internet intermediaries a) SOPA (U.S. bills)• Two main provisions – Section 102: Power given to U.S. Attorney General to order internet intermediaries (ISP, search engine, payment processor or advertising networks) to severe their relationship with “Rogue websites” (foreign websites dedicated to infringement) – Section 103: right holders can require payment or advert providers to severe their relationship with “foreign rogue websites”, but have to bring Court action in case of non compliance or in case a counter-notification is filed by the targeted (“rogue”) site• Scope of the regulation: cutting off access, links and funds to “foreign rogue sites”• Incentive to comply: exemptions of liability for complying intermediaries• Critics: – legislative process (lack of transparency, public involvement, etc.), – negative impact on internet security (provisions relating to DNS blocking/redirection – stifling effect on innovation and investments in the Internet industry (cost and liability) – chilling effect on free speech and fundamental rights (due process, etc.)• “Suspension” of the bill: after widespread public outcry, “until a compromise on the legislation will be reached”.
b) OPEN (U.S. Bill)• Online
Protection and Enforcement of Digital Trade (OPEN) : U.S. bill introduced before the House : January 18, 2012.• Scope: similar to SOPA: drying up funds for foreign “rogue” website• How it works?: International Trade Commission (ITC) (rather than U.S. A.G.) can require a payment processor or advertising network to severe their relationship with websites “dedicated to infringing activity” and “willfully promoting online infringement”.• Creation of an “OPEN” website: to include public suggestions keepthewebopen.com• Critics : – Efficiency? – Costs – Common issues with SOPA (due process, etc.)
c) ACTA (multinational Treaty)• Anti-Counterfeiting
Trade Agreement (ACTA) : multinational agreement signed: – on October 1st 2011, by the U.S. (and other countries e.g. Australia, Canada, Japan, etc. ) – on January 2012, by the the EU Council and 22 of its member states• Scope: establishing international standards for the enforcement of IP rights.• Main provisions on IP (section 5) : member states shall include in their legislations: – effective remedies against online piracy(including prohibitory and preventive injunctions against intermediaries) – effective remedies against the circumvention of effective TPM used by right holders to protect their rights (Technology protective measures) – specific procedures for the identification of direct infringers (notably through their ISP).• Restatement of broad principles (mainly applied in Europe and in the United States)
c) ACTA (Multinational Treaty)• Many
criticisms: – negotiation process (lack of transparency, lobby-driven regulations), – “vagueness” – alleged “chilling effect” on innovation and fundamental rights – overbroad protection of Technological Protection Measures (TPM)• However, the most controversial provisions - ISP filtering and graduated response - apparently included in versions of ACTA, were abandoned in the official version of the agreement• Agreement referred to the European Parliament by the European Commission, further to public outcry: E.P. will assess compatibility of the treaty with EU fundamental rights (freedom of expression, data protection, etc.).
d)Ley Sinde(Spanish Law)• Spanish “LeySinde”
(Sinde Law) : adopted on December 30, 2011• Immediately dubbed “SPANISH SOPA”• Main provisions: create a new governmental commission (Intellectual Property Commission) vested with the power to: – Assess the admissibility and compliance with law of right holder’s infringement complaints – hear the defense of the targeted website within a three days time limit – take a resolution (e.g. removal of disputed content or blocking of infringing website). – The ISP then has 24 hours to comply with such resolution – In case the ISP fail to comply with the resolution within said deadline, the right holder has to apply for an “expedite judicial procedure” which shall issue a decision within 5 days – According to the law, the whole procedure should be completed within 10 days.• Many criticisms from citizens, free speech and consumer associations: – Chilling effect on Free speech and innovation – Violation of users’ and internet intermediaries’ fundamental rights (free speech, due process, right to conduct their business, etc.)• The law was challenged before the Spanish Supreme Court by an Internet users’ association (notably provision relating to non-judicial shutting down of a website) and is currently under constitutional review.
e) AGCOM bills (Italian draft
bills)• AGCOM: Italian Administrative Authority in charge of the regulation of Communications• Original proposal (draft of December 2010) (AGCOM 1) - right holders victims of copyright infringement were supposed to send a complaint to ISPs hosting infringing content (identification of disputed content + request of removal) - In case of non compliance within 48 hours, AGCOM was supposed to be granted the power to order the withdrawal of such content or information. - Many criticisms: re. lack of judicial review, due process guarantees, etc.• Amendment of July 2011 (AGCOM 2) - subject this administrative procedure to the prior implementation of a classical notice and take down procedure – becomes an option to Court proceedings.• Critics – chilling effects on Internet user’s fundamental rights (free speech, due process, etc.) – chilling effect on ISPs’ freedom to conduct their businesses. – Even more concerning, it turned out that AGCOM had no power to legislate with respect to copyright ! – Project likely to be abandoned!
e) Reform of Irish Copyright
law, an Irish SOPA?• Recent reform of Irish copyright law, also dubbed “Irish SOPA”• Adopted on Feb. 29, 2012• In reality mere modification of Irish copyright law to comply with Enforcement (2004.48/EC) and Copyright (2001/29/EC) Directives (art. 11 and 8(3) resp.)• Introduce in Irish law the possibility to apply for an injunction against intermediaries whose services are used by a third party to infringe copyright or related right.
2. Cracking down on users
a) HADOPI (French law)• French HADOPI or Creation and Internet law: entered in force in October 2009 (after a second version of the bill was validated by the Constitutional Counsel.)• Main Provision: introduces in France a new government agency called Haute Autorité pour la Diffusion des œuvres et la Protection des droits sur Internet(H.A.D.O.P.I.) in charge of the application of a “three strikes” procedure or “graduated response”.• How it works? – Right holders identify violation of their rights and IP addresses associated to these violations and forward them to HADOPI – HADOPI ask ISP to identify the infringing users (through their IP addresses) – HADOPI sends the infringing user a first warning email (indicating time of the offense) – If the offense is repeated within six months, second email and a certified letter – If third offense within same period: transmission of the file to a judicial Court for possible sanctions (including suspension of the user’s Internet access with consecutive black listing of the ISP subscriber)• Does it work? – According to HADOPI, great success : only 60 people, out of 470,000 recipients of 2 warning letters would have committed a third infringement requiring transmission of the file to the Court
a) HADOPI (French law)• Strong
criticisms (ISPs, consumers, free speech associations…) – technically flawed • risk of mistakes in the collection/ identification IP addresses, • easy way to bypass the law (encryption technologies, etc.) – Chilling effect on users’ fundamental rights • free speech • privacy, • due process – Costs, notably for ISPs (cost 2011, $2,5 M) & French Government (Budget 2011 HADOPI $13 M) – Disproportionate Sanction (suspension of internet access) • contrary to fundamental rights (access to information, freedom of expression, social inclusion, etc.) • disproportionate to the offense – Law very unpopular and controversial results • cf. Video http://www.ca-va-couper.fr/
b) D.E.A. (UK law)• Digital
Economy Act: adopted on April 8, 2010,• Scope : implementation by ISPs of a system of graduated sanction against users engaging in copyright infringement.• How it works? – Copyright holder send a “Copyright Infringement Report” (C.I.R.) identifying act of infringement with associated IP address – ISP send a notification to the subscriber identified in the C.I.R.. – + maintain a database of individual subscribers who have been the subject of a C.I.R. – Copyright holder can then require ISP to provide a Copyright Infringement List (C.I.L.) of all IP addresses subject to a certain number of C.I.R. – Copyright holder can finally require the ISP, by mean of a Court Order, to identify the subscriber listed in the C.I.L. and launch copyright infringement litigations against them.• OFCOM Code: Most operational details are to be set in a code to be drafted and implemented by OFCOM• Since January 2012, the Secretary of State should have the possibility to order an ISP to take against those subscribers, “technical measures” to tackle online infringement (theoretically including suspension of Internet access)• But these procedures are to be included in a definitive version of the OFCOM code and voted by the UK Parliament.
b) D.E.A. (UK law)• Strong
Criticisms from ISP, privacy and consumer-rights associations: – chilling effect on innovation and free speech – Costs involved for service providers• A Judicial review required by main ISPs was however recently dismissed by UK High Court (confirmed on Appeal) (cf. Justice Parker Decision)• However, law remains: – extremely unpopular – Still not applied in practice (implementation of OFCOM’s code already postponed twice.)
B.Why these drafts/recent reforms might
not be the best way to tackle online infringement?1. Methodological problem: Technology is fast, law is slow, especially at a global level2. Substantial problems: Shifting the burden on one of the stakeholders, threatens the balance reached by U.S. and E.U. Lawmakers at an international level (WIPO WCT, DMCA, e-commerce Directive) and the global consistency of the system – Shifting the burden on Internet Intermediaries : • deterrent effect on innovation and new investment in the technology industry – Shifting the burden on users : • chilling effects on users’ fundamental rights (privacy and free speech)3. However, Status quo is not satisfactory either: • Copyright protection : vital economic incentive for copyright creation • Legal uncertainty: detrimental to all users
II. Alternative solutions to legislative
reforms• Current legal framework : a consistent set of legal remedies but – Diverging interpretations of this framework by different Courts in Europe and in the U.S. – Enforcement issues – Legitimate (and convenient) alternative to online piracy are still underdeveloped• Three alternative solutions to legal reforms to tackle online piracy A. A consistent interpretation of the law in a global environment B. Streamlined enforcement procedures C. Expansion of the legitimate offer for digital content
A. A consistent interpretation of
copyright law in the digital environment – U.S. and E.U. copyright law: a consistent framework offering efficient remedies to copyright holders victims of infringement • Notice and take down system • Injunctive procedures against direct infringers and platforms used for infringing • Liability of intermediaries involved in infringing activity because of their knowledge, inducement or control over this activity (contributory or vicarious liability, “civil liability”, DMCA and e-commerce safe harbor). – Problem: this framework has been interpreted differently in Europe and in the U.S. • Example of UGC websites – Veohand Youtube(in first instance) held non liable for copyright infringement in the U.S. (UMG Recordings v. Veoh, CD Cal 2009 and 9th circuit 2011, Viacom v. Youtube, SDNY 2010, partially reversed by 2nd Circuit 2012) – But Italia On Line , Yahoo and Google (Video) were found liable in Italy and France for the same activity (video sharing platform) because they “ripped benefit” over the distribution of copyrighted content (cf. Google v. BAC Films, CA Paris Jan. 2011, RTI v. IOL, Milan Jan. 2011, RTI v. Yahoo, Sept. 2011) • Example of peer-to-peer website – Napster, Grokster and Limewireheld liable for copyright infringement committed by their users in the U.S. (Napster, 9th cir. 2011, Grockster, S. Ct 2005, Limewire (SDNY, 2011) – But Kazaa, Rapidshare and Elrincondeljesus, held non liable for similar activities in Holland (S. Ct 2003), Germany (Dusseldorf, 2010) and Spain (Barcelona 2009) (no control/ substantial non infringing use)
A. A consistent interpretation of
copyright law in the digital environment– How could we reach more consistency in the interpretation of the law? • Harmonized & streamlined notice & take down systems • Broader access to injunctive relieves in the US • Strict and harmonized interpretation of the ISP safe harbor requirements: • Knowledge : actual or constructive (“sufficient awareness”) • Control : different from knowledge (see 2nd circuit decision in Viacom v. Youtube) • Benefit : safe harbor : not conceived for platforms building their business models on copyright infringement • Appropriate response after knowledge: taking into account current technical landscape (filtering, etc.)– More consistent interpretation of the law, a first step to: • More efficient remedies for right holders • More legal alternatives on the market (foster fair competition) • More legal security for all the other stakeholders
B. Facilitating enforcement• One of
the main hurdle preventing right holders from taking actions against users: enforcement issues• Necessity to create streamlined enforcement procedure• Different solutions in this regard, e.g. – Small claim track for low value or very straight-forward IP claims (See e.g. Prof. Hargreaves Proposal). – Streamlined administrative procedure (e.g. Lemley’s proposal) – Alternative Dispute Resolutions Online (e.g. eBay dispute resolution, etc.)
C. Expanding the legitimate market
for digital content 1. Facilitating clearing and licensing processes for copyrighted content1. Streamlined licensing processes• Main hurdle to distribution of legal content: clearing and licensing process: – Identification (no international report) – Authorization (still on a domestic basis) – Deals (bargaining power, market closed to new entrants, inconsistency of the terms)• Different proposals in this regard: – International registry of copyright (e.g. the Global Repertoire Database , The Linked Content Coalition) – Creation of a single digital market where rights could be sold and acquired easily • E.g. E.U. project of digital single market for copyrighted content in Europe • Parallel projects in UK and Ireland (Digital Copyright Exchange) – Harmonized and machine-readable copyright symbol (e.g. EPC’s “big idea” for the E.U. Digital Agenda, Creative Commons projects, – Technical solutions : Inclusion of copyright information in the right holder API
C. Expanding the legitimate market
for digital content 2. Fostering innovative business models & partnerships• Today, digital sales : 33% of the music market (globally) / more than 50% in the U.S. (source IFPI 2012 Music Report)• Market with a huge potential (tablets, etc.)• Emergence of new business models including – Micropayment/ pay on demand model (e.g. Apple’s iTune) – “Freemium” models (e.g. New York Times, Spotify ): combining free and subscription base services) – Donations and/or community development models: (e.g. Wikipedia), – Bundled offers (e.g. partnership facebook - spotify, Deezer – Orange) – subscription model (all you can eat or metered) – Pay what you want model (e.g. Radiohead with their In Rainbows album)• Positive response from the market – Number of paying subscribers to music services has increased by 65% in 2011 (from 8,4 to 13,4 M) – iTunes opened in 28 new markets in 2011 – Spotify: 2,5 millions subscribers/ Deezer: 1,5 million (fostered by partnership referred above)• Conclusions : Rather than through widely unaccepted regulations, online piracy could be curbed more efficiently by fostering the development of the legitimate market for digital content, notably through – harmonized interpretation of our current legal framework, – more efficient enforcement solutions and – a legal environment more favorable to the development of legitimate channels of distribution for online content.