Are existing laws, existing education and existing understanding of consumer behaviour insufficient to deal with ‘piracy’?

Recently a UK Government advisory body – the Strategic Advisory Board for Intellectual Property (SABIP) – has bucked the trend by calling for an urgent investigation into consumers’ attitudes and behaviour in relation to offline copyright infringement. It says that too much focus has been placed on looking into online peer-to-peer file-sharing. SABIP is concerned that physical copying by swapping hard drives and memory sticks has been overlooked and may pose a greater threat of piracy than online copying. Although SABIP believes that there is a lot of offline copying taking place in this way, it says that further research is needed to establish the extent of it. Initial SABIP research (conducted by BOP Consulting) shows that consumers are more interested in price, quality and availability of material than whether it is legal or illegal. The natural implication seems to be that if legal material happens to be better quality than unlawful copies, that will influence consumers to buy legally. That is food for thought, particularly in light of the following survey of legal purchasers – who break the law.

73% of 2000 people surveyed by Consumer Focus in the UK admitted to being confused by what they were legally permitted to copy or record. Most of the consumers did not know that it was illegal to copy something that they have legitimately paid for (such as a CD) over onto another medium (such as a computer) for their own personal use. Consumer Focus accused the current copyright laws of being outdated and not reflecting what consumers reasonably believe to be the case when using music just for themselves to listen to. Indeed, it seems clear that many people who are not illegal peer-to-peer file-sharers are still clearly breaking the UK’s copyright laws, despite not realising it. The congruence between the law and what people believe to be the law seems to be in a bit of a mess.

Turning to online protection, in the UK, initial steps to enforce the law seem to have failed. The first prosecution in the UK of a person charged with illegal peer-to-peer file-sharing ended with a not guilty verdict. A man ran an unauthorised music-sharing web site called Oink from his home in the North East. The site allowed members to share files. From its launch in 2004 until police closed it down in 2007, over 20 million music files were shared. Users had to make a donation to the site so that they could invite friends to become members too. The site operator made a considerable amount of money – some £10,000 a month, in donations. However, the site operator was found not guilty of the offence of conspiracy to defraud by Teesside Crown Court.

In Australia, a court ruled that an Internet Service Provider (ISP) was not liable for the unauthorised peer-to-peer file-sharing habits of users to whom that ISP merely provided access. Roadshow Films claimed that iiNet (an ISP) had authorised copyright infringement by its users, but the Australian Federal Court disagreed. The judge said that the fact that copyright infringement was occurring on a wide scale across the ISP’s network did not mean that the ISP had authorised the wrong-doing as it was not compelled to stop the infringements. Mere knowledge that infringement was taking place was not enough. As with English law, Australian copyright law forbids the doing or authorisation of the doing of anything which infringes someone else’s copyright. The two legal systems have common roots, and the decision may therefore be persuasive (although not binding) on similar English court cases.

Over the past few months, the UK government has turned to a different approach with its Digital Economy Bill. When passed, the Digital Economy Bill will see file-sharers being identified, warned and ultimately stopped from having full Internet access. There is some recent uncertainty whether the Government has shifted its position in the Digital Economy Bill and adopted a more lenient line in respect of illegal peer-to-peer file-sharers. Instead of cutting off persistent file-sharers from the Internet, the Government now says that their accounts will be temporarily suspended – although it is unclear what this means. It is not clear if this is a change or not. According to Jim Killock, of the Open Rights Group – a body against the proposed legislation – nothing has really changed. He says that temporary account suspension still means that families will be stopped from using the Internet.

As to cost – the Government has announced that rights-holders will have to pay 75% of the cost of dealing with Internet pirates under the proposed Digital Economy Bill and ISPs will be required to foot the balance of 25% of the cost – although the entertainment industry had hoped for a 50/50 split.

However, the law may say (or be about to say) one thing but the technical ability to identify file-sharers is far from fool-proof. Indeed it would seem to be a pre-requisite to any enforcement under the Digital Economy Bill that file-sharers are identifiable. Recently, Virgin Media announced that it is planning to trial new software called CView which will analyse file-sharing by its customers. However, Privacy International – a privacy rights watchdog – has taken issue with the ISP’s actions and has asked the European Commission to report on the legality of the proposed software use. Privacy International claims that the trial would breach the Regulation of Investigatory Powers Act, under which it is a criminal offence to intercept communications without consent unless certain exemptions apply. However, Virgin Media counters that it is not actually identifying individual users. Instead, it is conducting the trial to see how much of the traffic through its service is illegal file-sharing. It wants to find out what it can do to reduce illegal file-sharing and the trial will give it useful information to help to achieve that. Virgin Media has admitted that it would be possible technically to use the deep packet inspection software to identify Internet protocol addresses (from which individual users could be identified) but has announced that this is not currently its plan.

Importantly, Virgin Media claims that CView will not help with the proposed Digital Economy Bill precisely because it says that CView does not actually identify anyone.

It seems that the ability to identify file-sharers as file-sharers beyond a reasonable doubt (the criminal standard of proof) or even on a balance of probabilities (the civil standard of proof) remains in doubt at present. That must surely put the utility of the proposed Digital Economy Bill in doubt too.

Ways to deal with file-sharing seem to be in state of flux. It is not just files that are being shared – the problem is being shared as well – between those responsible for the legal aspects, the technical aspects and the educational aspects of this modern problem. And, of course, by those losing money as a result.

This blog entry was written by Mark Weston, who is a partner at Matthew Arnold and Baldwin LLP. There he heads the Commercial/IP/IT team. He joined in 2004 after many years in the Magic Circle law firms. Although Mark’s team deals with non-contentious and contentious matters, Mark’s own practice has primarily evolved focus on non-contentious matters in all areas of commercial law, information technology law, intellectual property law and Internet and on-line commerce law.

Music & Copyright is a fortnightly research service published by Informa Telecoms & Media.

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