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The French Laws « Hadopi #1 & 2 »

October 10, 2012

Anne-Sylvie Vassenaix-Paxton
Partner
2




                             Introduction

 Internet piracy was on the rise in France
    Estimated impact of piracy on the entertainment sector as a whole in 2007 (report by
    the French National Assembly):
         €1.2 billion
               • €605m € for the video production
               • €369m for the music industry
               • €147m for the book industry
         loss of approximately 5,000 jobs
               • 2,400 lost jobs for the video production industry
               • 1,600 lost for the music industry
               • 750 lost for the book industry

   Massive illegal downloading over peer-to-peer sharing networks
        Napster, MegaUpload, etc.
3




                                Introduction

 Legal framework before Hadopi laws was strong but mostly
  ineffective

 Criminal penalties incurred for copyright infringement
  (article L. 335-2 of the French Intellectual Property Code (IPC))


           €300,000 fine

           3 years imprisonment


 Criminal proceedings and associated penalties were disproportionate when applied to
  mass illegal downloading
4




                          Introduction

 Legislative background to Hadopi laws
    two objectives

        To put an end to the illegal peer-to-peer sharing of creative works over the
         Internet
        To encourage the development of legal content available for download

    September 2007
         Launch of a consultation process between (i) professionals in the music, film
          and media industries and (ii) Internet Service Providers (ISP)
         Drafting of the « Olivennes report »
    The outcome
         The “Elysee Agreement” (November 23, 2007)
         List of measures for the development and protection of creative works and
          cultural programmes on the new networks
5




I. Hadopi #1 or the « law promoting the distribution and
protection of creative works on the Internet »

   A controversial bill partly censored by the Constitutional
    Council (Conseil constitutionnel)

     Inspired by the Olivennes report

     Creation of a new independent administrative body

        “The High Authority for the Dissemination of Works and the Protection of Rights
        on the Internet” (Haute Autorité pour la Diffusion des Oeuvres et la Protection
        des Droits sur Internet (HADOPI))

         Intended to deal with the protection of online works of arts
         Has the power to recommend legislative and/or regulatory changes
         May be consulted by the government when drafting bills and/or decrees
          involving the protection of literary and artistic works
6




I. Hadopi #1 or the « law promoting the distribution and
protection of creative works on the Internet »

   New anti-piracy scheme

      “The progressive response” or “three strikes and you’re out”

      Progressive warning procedure for Internet users who have engaged in illegal
       online file-sharing

               (i) 1st strike: e-mail message to the Internet user

               (ii) 2nd strike: registered letter with return receipt requested sent to the
                                Internet user

               (iii) 3rd strike: suspension of Internet access for a 3 to 12 months
                                 period

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Presentation on hadopi laws

  • 1. The French Laws « Hadopi #1 & 2 » October 10, 2012 Anne-Sylvie Vassenaix-Paxton Partner
  • 2. 2 Introduction  Internet piracy was on the rise in France Estimated impact of piracy on the entertainment sector as a whole in 2007 (report by the French National Assembly):  €1.2 billion • €605m € for the video production • €369m for the music industry • €147m for the book industry  loss of approximately 5,000 jobs • 2,400 lost jobs for the video production industry • 1,600 lost for the music industry • 750 lost for the book industry  Massive illegal downloading over peer-to-peer sharing networks Napster, MegaUpload, etc.
  • 3. 3 Introduction  Legal framework before Hadopi laws was strong but mostly ineffective  Criminal penalties incurred for copyright infringement (article L. 335-2 of the French Intellectual Property Code (IPC))  €300,000 fine  3 years imprisonment  Criminal proceedings and associated penalties were disproportionate when applied to mass illegal downloading
  • 4. 4 Introduction  Legislative background to Hadopi laws  two objectives  To put an end to the illegal peer-to-peer sharing of creative works over the Internet  To encourage the development of legal content available for download  September 2007  Launch of a consultation process between (i) professionals in the music, film and media industries and (ii) Internet Service Providers (ISP)  Drafting of the « Olivennes report »  The outcome  The “Elysee Agreement” (November 23, 2007)  List of measures for the development and protection of creative works and cultural programmes on the new networks
  • 5. 5 I. Hadopi #1 or the « law promoting the distribution and protection of creative works on the Internet »  A controversial bill partly censored by the Constitutional Council (Conseil constitutionnel)  Inspired by the Olivennes report  Creation of a new independent administrative body “The High Authority for the Dissemination of Works and the Protection of Rights on the Internet” (Haute Autorité pour la Diffusion des Oeuvres et la Protection des Droits sur Internet (HADOPI))  Intended to deal with the protection of online works of arts  Has the power to recommend legislative and/or regulatory changes  May be consulted by the government when drafting bills and/or decrees involving the protection of literary and artistic works
  • 6. 6 I. Hadopi #1 or the « law promoting the distribution and protection of creative works on the Internet »  New anti-piracy scheme  “The progressive response” or “three strikes and you’re out”  Progressive warning procedure for Internet users who have engaged in illegal online file-sharing (i) 1st strike: e-mail message to the Internet user (ii) 2nd strike: registered letter with return receipt requested sent to the Internet user (iii) 3rd strike: suspension of Internet access for a 3 to 12 months period
  • 7. 7 I. Hadopi #1 or the « law promoting the distribution and protection of creative works on the Internet »  Annulment by the French Constitutional Council of the repressive provisions of the “progressive response” (decision of June 10, 2009) (i) Disproportionate infringement of the freedom of expression and communication (Article 11 of the French Human Rights Declaration) • Only a judicial authority can suspend Internet access, not an administrative body as freedom of speech implies access to online communication services • Need to distinguish the warning phase (HADOPI) and the sanctions (Criminal Courts) (ii) Infringement of the presumption of innocence • Burden of proof should not lie on the Internet subscriber who should not be required to demonstrate that he is not responsible for the alleged piracy (iii) Infringement of Internet subscribers’ privacy rights • Warnings issued on the basis of personal data collected and processed by sworn agents (representing copyright holders). The transmission of personal data to HADOPI is an unwarranted infringement of Internet subscribers’ privacy rights
  • 8. 8 I. Hadopi #1 or the « law promoting the distribution and protection of creative works on the Internet »  The main measures of the amended version of the Hadopi #1 law  Law of educational value (enacted June 12, 2009)  Objectives given to the HADOPI authority (articles L. 331-12 et seq. IPC) (i) the « encouragement of the development of the legal offer on the Internet » (ii) the « protection of works to which a copyright or related right is attached against any infringement » (iii) the « regulation of the uses of the technical measures of protection and information »  Implement the preliminary phase of the so-called “progressive response” (warnings)
  • 9. 9 I. Hadopi #1 or the « law promoting the distribution and protection of creative works on the Internet »  The warning phase • Investigations by the HAPODI through sworn and accredited agents responsible for:  collecting from ISPs the identity, postal address, e-mail address and phone numbers of the Internet subscriber  and distribution of rights societies  industry defence bodies • HADOPI’s sworn and accredited agents are appointed by:  industry rights defense organizations  rights distribution societies  National Cinema Center (Centre national de la Cinématographie) • The Authority, through its Rights Protection Committee (RPC), composed of three magistrates, examines the facts and, if appropriate, warns the Internet subscribers
  • 10. 10 I. Hadopi #1 or the « law promoting the distribution and protection of creative works on the Internet » • Warnings procedure (article L. 331-25 of the IPC)  First warning o by email  Second warning o by email and by registered letter with return receipt requested in case of repeated acts constituting a breach, 6 months after sending the first warning • Warnings’ content (identical for both warnings) Information relating to:  The Internet’s subscriber’s duty to monitor his Internet access, to ensure that it is not used for any copyright infringement (article L.336-3 of the IPC)  the existence of securitization measures to prevent a breach of this duty  the penalties incurred  the legal offer of online cultural content
  • 11. 11 I. Hadopi #1 or the « law promoting the distribution and protection of creative works on the Internet »  Involvement of the Courts (article L. 336-2 of the IPC)  Competent jurisdiction The Court of First Instance (“Tribunal de Grande Instance”)  Power To order any measures likely to prevent or terminate any copyright infringement  Request can be made by: i. rightholders ii. rights collection and distribution societies iii. industry defense bodies
  • 12. 12 I. Hadopi #1 or the « law promoting the distribution and protection of creative works on the Internet »  Conditions of referral to the HADOPI (article R. 331-35 of the IPC; decree dated March 5, 2010) • List of bodies which can make referrals to the RPC via their sworn agents (L. 331-24 IPC):  Industry defense bodies  rights collection and distribution societies  the Centre national de la cinématographie • An individual rights holder cannot make a claim directly to the HADOPI • The RPC may also act based on the basis of information provided by the Prosecutor’s Office • To be admissible, referrals made to the RPC must provide information on the acts likely to constitute a breach (date and time of the acts), the IP address of the Internet subscriber concerned, etc.
  • 13. 13 I. Hadopi #1 or the « law promoting the distribution and protection of creative works on the Internet » • Referral should be accompanied by:  a “sworn declaration that the author of the referral has standing to act in the name of the holder of the rights over the protected work or materials concerned“ (article R. 331-35 of the IPC) • Referrals cannot be made based on acts dating back more than 6 months • Upon receipt of the referral, the RPC will acknowledge receipt by electronic mail  If the referral is not processed within 2 months from that, the HADOPI is required to delete the personal data provided with the referral
  • 14. 14 I. Hadopi #1 or the « law promoting the distribution and protection of creative works on the Internet »  New obligations for ISPs • Duty to inform Internet subscribers (in their subscription contract):  of their duty to monitor their internet access  of the measures that can be taken by the RPC  of the civil and criminal sanctions incurred in case of copyright infringement  of the existence of security means to prevent a breach of their duty to monitor • Duty to communicate contact information of alleged infringers (names, postal adresses, e-mail addresses, etc.) (decree of July 26, 2010)  to members of the RPC  in case of alleged copyright infringement
  • 15. 15 I. Hadopi #1 or the « law promoting the distribution and protection of creative works on the Internet »  Promotion of legal content available for download over the Internet • Creation of a legal framework for online editors • Creation of a « Music Card » (Decree of October 25, 2010)  card specially dedicated to young people aged between 12 and 25  can purchase 50 euros worth of music for half price by choosing from a list of platforms and online services associated with the project  government subsidized card • Shortening of media release windows After a theatrical release, a movie should be available:  on Video (DVD / video on demand): 4 months later  On pay TV: 10 months later  On free television: 22 months later
  • 16. 16 II. Hadopi #2 or « the law for the criminal protection of artistic and literary works on the Internet »  Enactement of a new statute (Hadopi II) (October 28, 2009)  As a result of and in response to the decision of the Conseil constitutionnel Implementation of the repressive provisions of the « graduated response » mechanism (i.e suspension of internet access)  Delegation of the sanctionning power to a judicial authority rather than an administrative body  Balance between education and repression  Preventive and repressive measures adapted to the specific handling of a massive phenomenon of unlawful downloading over the Internet
  • 17. 17 II. Hadopi #2 or « the law for the protection of artistic and literary works on the internet under criminal law»  New additional penality: suspension of internet access  Article L. 335-7 of IPC Copyright infringement is punishable by a « suspension of access to a public communication service for a maximum period of one year »  May be imposed only by Criminal Courts taking into account: i. the circumstances and the seriousness of the offenses ii. the personality of the perpetrator, his professional activity and his socio- economic situation  Possibility in some cases to impose the additional penalty as the main penalty  Internet subscribers must continue to pay their subscription to the ISP during the suspension period
  • 18. 18 II. Hadopi #2 or « the criminal law for the protection of artistic and literary works on the Internet » 1. Tortious cases (Article L. 335-7-1 of the IPC) • In addition to the penalties already incurred for copyright infringement:  €300,000 fine  3 years imprisonment  Suspension of Internet access for up to 1 year • Criminal Courts Courts have significant leeway in assessing the tortuous act which has been committed and the quantum of damages
  • 19. 19 II. Hadopi #2 or « the criminal law for the protection of artistic and literary works on the Internet » 2. Misdemeanour cases (Article L. 335-7 of the IPC; Article R. 335-5 of the IPC) • New 5th class misdemeanour (contravention de 5ème classe):  €1,500 fine  suspension of Internet access for up to 1 month • Punishement for characterized negligence in connection with illegal dowloading • Penalty associated to the duty to monitor Internet access :  the person holding the access to public online communication services finds himself “without legitimate cause” in one of the following two situations: (i) “has failed to put in place means of securing such access” or (ii) “has failed to use diligence in implementing these means”. • Passive behaviour of the Internet user who has not himself committed an act of unlawful dowloading
  • 20. 20 II. Hadopi #2 or « the criminal law for the protection of artistic and literary works on the internet »  Procedures leading to the penalty being imposed • New judicial police functions of the RPC (Article L. 331-21-1 of IPC)  to identify the facts likely to constitute a copyright infringement  to obtain observations of the alleged infringers in writing or at a hearing (but no coercive power to summon) • Transmission to the Prosecutor’s Office of the files • Additional investigations by the Prosecutor’s Office possible but the Prosecutor’s Office is encouraged to decide whether to prosecute on the sole basis of the elements provided by the RPC
  • 21. 21 II. Hadopi #2 or « the criminal law for the protection of artistic and literary works on the Internet » 1) Suspension on a misdemeanour basis  Warnings sent but despite such warnings, the offender has not installed means to secure his Internet access  PRC members will decide if the facts contained in the file constitute the offense of characterized negligence, in which case they will refer the file to the Prosecutor’s Office  If the Prosecutor’s Office prosecutes the Internet subscriber, the Police Court (“Tribunal de Police”) will be responsible for determining whether the offense has indeed been committed
  • 22. 22 II. Hadopi #2 or « the criminal law for the protection of artistic and literary works on the Internet » 2) Suspension on a tortious basis • Introduction of simplified and quicker proceedings  ensuring the speed of the criminal response • Prominent role of the evidence collected by the RPC • The Court cannot impose a prison sentence in this type of simplified proceedings Maximum penalty: € 300,000 fine and suspension of Internet access for a period of 1 year
  • 23. 23 II. Hadopi #2 or « the criminal law for the protection of artistic and literary works on the Internet » i. Copyright offense may be heard by a « tribunal correctionnel » sitting in a single- judge formation  Before: only collegiate formation  Article 398-1 of the French Criminal Procedure Code (CPC)  Decision on the basis of the evidence produced by the Prosecutor’s Office, without the defendant appearing in court
  • 24. 24 II. Hadopi #2 or « the criminal law for the protection of artistic and literary works on the Internet » ii. Copyright offense can be prosecuted under the ex-parte summary judgment procedure (« ordonnance pénale »)  Article 495-1 (2) of the CPC: “The President shall adjudicate without prior debate through a criminal order in summary judgment imposing dismissal or a fine as well as, if applicable, one or more additional penalties”  No due hearing of the defendant  Becomes res judicata if the defendant, on whom the order has been notified, does not oppose it within a period of 45 days
  • 25. 25 II. Hadopi #2 or « the law for the protection of artistic and literary works on the internet under criminal law»  Implementation of the Internet access suspension penalty and control thereof by the HADOPI • Prominent role of the RPC  Informed and a recipient of all enforceable decisions including an Internet access suspension penalty (Articles R. 331-44 and R. 331-45 of the IPC)  Responsible for implementing such penalties and ensuring due compliance • RPC will inform the “person whose activity it is to provide access to public online communication services of the suspension penalty imposed against its subscriber” (Article R. 331-46of the IPC) • In turn, the ISP will inform the RPC of the “date when the suspension period began” (Article R. 331-46 of the IPC)
  • 26. 26 II. Hadopi #2 or « the criminal law for the protection of artistic and literary works on the Internet » • Failure to comply for the ISP with the suspension decision  Punishable by a €5,000 fine • Non-compliance with the injunction not to take out a new Internet subscription i. Tortious basis  Punishable by a €30,000 fine and 2 years imprisonment (Article 434-1 of the French Criminal Code) ii. Misdemeanour basis  Punishable by a €3, 750 fine (Article L. 335-7-1 of the IPC)
  • 27. 27 Conclusion • Studies show a clear downward trend in illegal peer-to-peer downloads  Drop of approximately 43% in the illegal sharing of works on peer-to-peer networks in France over the year 2011(study by Peer Media Technologies) • No indication that there has been a massive transfer to streaming technologies • Too early to assess the impact of MegaUpload shutdown in January 2012 • At the same time, a wide range of legal content offers has been made available • Dissuasive effect of the progressive response process:  95% of those having received a first-time notice do not need to be sent a second notice for illegal behaviour on peer-to-peer networks  71% of peer-to-peer users surveyed indicate that they would stop downloading ilegal content if they received a warning from the HADOPI
  • 28. 28 Conclusion • After 18 months in operationg, the HADOPI has:  Sent 1,150,000 e-mails as first warnings  Sent 105,000 registered letters as second warnings  Submitted 340 cases to the PRC  Transferred 14 files to the Prosecutor’s Office for prosecution. • In September 2012, for the first time, a Criminal Court ordered an Internet user to pas as a deferred sentence a € 150 fine for not securing his Internet access • One of the future tasks for the HADOPI is to  Set forth measures for better copyright protection in light of an increasing number of “streaming” sites or direct downloading