Copyright Enforcement in the Digital Era and the Role of Internet Intermediaries LL.M.

2011

Laura Carthy
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SUMMARY OF METHODOLOGIES USED AND MAJOR FINDINGS

I was motivated to complete this thesis having a deep interest in the Intellectual Property and Technology Law areas. This is due to my undergraduate qualification in Information and Communication Technology which I obtained here in Trinity College in the School of Computer Science and Statistics. Researching this thesis has allowed me to synergise both my technology and legal knowledge and to gain a broad and in-depth understanding of digital piracy, both from a technical and from a legal perspective. Particularly as I have grown up in the Internet age and am an avid consumer of digital culture, I find digital copyright and the plethora of issues that it throws up, enthralling. I watched with interest as the EMI v UPC case unfolded in the autumn of 2010 and felt that the ramifications of this case warranted an in depth analysis.

In March 2011, in furtherance of my research, I commenced a legal internship with the Internet Service Providers Association of Ireland. This is the representative industry association for Internet intermediaries in Ireland. As part of my role here I have followed the issue of digital copyright very closely both at a national and European level. It has given me indispensible industry insight into the on-going reviews and recent developments in this area, and has enabled a much broader understanding of the issues than one could possibly grasp in a purely academic position.

I attended the Annual Conference on European Copyright Law in Brussels in May, where I met such copyright experts as Mihly Ficsor, Alain Strowel, Jonathan Griffiths and Frank Macrez to name a few. I met and have since liaised with the lead counsel for the litigation team of Scarlet in the highly anticipated case of Scarlet v SABAM which is currently before the CJEU, Thomas de Meese. I observed with interest as each of these esteemed academics and practitioners presented on the most contemporary developments in Europe in the realm of copyright.

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In June I attended the ALAI (Association littraire et artistique international) annual conference entitled Expansion and Contraction of Copyright: Subject Matter, Scope and Remedies where I volunteered with the Irish Copyright Licensing Agency and the Copyright Association of Ireland. This highly informative conference included speakers such as Mr Justice John Cooke, Mr Justice Peter Charleton, solicitor Helen Sheehy, Professor Robert Clark and representatives from Google, WIPO, HADOPI and the European Commission. Specific presentations were delivered in relation to the enforcement of rights in the digital era honing in on the graduated response regime and the alternative solution of private agreements with Internet intermediaries. With my industry experience I could constructively analyse and critique the information which was imparted to me, in order to draw my own conclusions, which are evident in this paper. The Department of Enterprise, Jobs and Innovation announced on 9 th of May that it was to begin a public consultation for the review of the Copyright and Related Rights Act, 2000. The Copyright Review Committee held a public meeting here in Trinity College Dublin on the 4th of July which I attended and observed the contributions of all of the stakeholders present. I also attended an event run by the IIEA where senior copyright counsel for Google, Fred von Lohmann, delivered a powerful presentation entitled Protecting Innovation While Protecting Copyright. This detailed how copyright policy should be adapted for the digital age stressing the necessity to embrace the technological advances which we are currently experiencing all around us, with new business models and flexible laws which can be adapted to the online environment.

As I had anticipated when I chose this topic for my thesis, legislative reform resulting from the fallout of the UPC decision is now on the agenda in this jurisdiction. The Government presented draft wording for a Statutory Instrument in May in order to bring Ireland into line with its European counterparts in complying with the E-Commerce Directive. I have followed this suggested amendment very closely and liaised with industry representatives and copyright lawyers in relation to same. I have conducted extensive research on this entire area iii

of jurisprudence in order to present my analysis and my major findings have been as follows: The current legislative conditions are unsatisfactory in this jurisdiction in relation to digital piracy. The attempts of rightsholders to enforce their copyright against individual infringers through means currently available has proven burdensome and insufficient and they have thus turned their focus toward Internet intermediaries seeking a more active role on their part. Internet intermediaries have a defence of mere conduit under the ECommerce Directive. However European law provides that rightsholders should be in a position to obtain injunctions against intermediaries whose facilities are used by third parties to infringe copyright. Under the principles of EU law, any such injunction must be subject to certain safeguards. It must be proportionate and effective and have regard for the fundamental rights of third parties. A body of case law is developing in this area in Europe providing much-needed further guidance, particularly the opinion of the Advocate General in Scarlet v SABAM. The full judgment of the Court of Justice of the European Union in this case should be available in the autumn. European case law differentiates between hosting providers, access providers and index and search providers and the courts have treated each category very differently. Those intermediaries who play a neutral role will generally enjoy the protection of the mere conduit safe harbour, while the more active intermediary will not. A number of national measures have been enacted in some Member States, and indeed worldwide, to combat copyright infringement by means of a graduated response. It has been established, through a body of European jurisprudence, that such a scheme must be made on a statutory basis, with judicial oversight and procedural safeguards, and a private agreement between the parties will not suffice.

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 The current proposals from the Department of Enterprise, Jobs and Innovation of an amendment to the Copyright and Related Rights Act 2000 by way of Statutory Instrument is unsatisfactory. It is broadly worded and provides little guidance to the judiciary. It will not serve to alleviate the situation in Ireland and the manner in which the consultation has been carried out, separately to the broader review of the 2000 Act, is disappointing. Reform which may bring about a real solution to the problem is required and this would necessitate input from the Oireachtas and collaboration of all stakeholders involved.

ACKNOWLEDGEMENTS
I would like to extend many thanks to my supervisor, Mr Paul Coughlan, for his insightful comments and much appreciated guidance throughout the year. I would also like to thank my colleagues at ISPAI for offering their thoughts and observations, and most importantly for their banter, which has provided many a diversion, keeping me sane while completing this thesis. I am indebted to all of my friends and family members who have supported me in many and varied ways over the course of the past year.

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AUTHORS DECLARATION
I hereby declare that this project is completely representative of my efforts alone. Where use has been made of other peoples work, it has been fully acknowledged and referenced accordingly. This thesis has not been submitted as an exercise for a degree at this or any other University. I agree that the Library may lend or copy this thesis upon request.

Signature_________________________ Date_________________________

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CONTENTS
Summary of methodologies used and major findings Acknowledgements Authors declaration Contents Table of Cases Table of Legislation Chapter 1 Chapter 2 2.1 2.2 2.3 2.4 Chapter 3 3.1 3.2 Introduction European Framework Background Directive 2000/31/EC Directive 2001/29/EC Directive 2004/48/EC European Copyright Jurisprudence A Pattern Developing Introduction Indexing and Searching 3.2.1 Newzbin (UK) 3.2.2 The Pirate Bay (Sweden) 3.2.3 The Pirate Bay and Mininova (Netherlands) 3.2.4 RapidShare (Germany) Hosting Providers 3.3.1 Google Adwords 3.3.2 Google Video 3.3.3 LOral and Ebay Internet Access Providers 3.4.1 Telenor (Denmark) 3.4.2 Ziggo (Netherlands) 3.4.3 Belgacom and Scarlet (Belgium) 3.4.4 UPC (Austria) 3.4.5 UPC (Ireland) ii vi vii viii x xii 1

4 4 8 10

13 13 13 16 18 19 21 21 22 23 24 25 25 26 27 27

3.3

3.4

Chapter 4 4.1

Options Available for Intermediary Action and Striking a Balance What in theory can an ISP do and can it work? 29 4.1.1 DNS Blocking 29 viii

4.2

4.1.2 IP Blocking 4.1.3 Filtering 4.1.4 Graduated Response Striking a Balance Proportionality and Effectiveness Ireland A Chronology of Case Law Introduction Norwich Pharmacal Graduated Response The Pirate Bay Data Protection Implications UPC 5.6.1 Background 5.6.2 Attitude of UPC 5.6.3 Possible Solutions 5.6.4 Fundamental Right to Privacy 5.6.5 Authority of the Court 5.6.6 European Obligations

30 31 31 32

Chapter 5 5.1 5.2 5.3 5.4 5.5 5.6

35 35 36 37 38 43 43 43 44 45 45 49

Chapter 6 6.1 6.2 6.3 Chapter 7 7.1 7.2 Chapter 8 Bibliography

National Measures against Piracy on the Internet Introduction 52 UK Digital Economy Act 2010 52 France HADOPI 60 Ireland Consultation on Amendment to Copyright and Related Rights Act 2000 A Closer Look Conclusion

64 66 73 75

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TABLE OF CASES
AUSTRALIA Roadshow Films Pty Ltd v iiNet Ltd (No3) [2010] FCA 24 AUSTRIA Constantin Film Verleih GmbH and Wega Filmproduktionsgesellschaft mbH v UPC Telekabel Wien GmbH Unreported 17 May 2011 (HW(Vienna)). BELGIUM Belgian Anti-Piracy Federation v Belgacom Unreported 8 July 2010 (RvK (Antwerp)) SABAM v SA Tiscali [2007] ECDR 19 SABAM v Tiscali Unreported January 28, 2010 (App (B)) DENMARK Telenor (tidligere DMT2 A/S og Sonofon A/S) v IFPI Danmark 27 May 2010 (Hjesterets) FRANCE Decision no 2009-580 of June 10th 2009 of the French Constitutional Council Google Inc. v Compagnie des phares et balises 21 March 2011 (Cour dAppel de Paris) Google Inc. v Bac Films, the Factory 21 March 2011 (Cour dAppel de Paris) Google Inc. v Bac Films, the Factory, Canal + 21 March 2011 (Cour dAppel de Paris) Google Inc. v Les Films de la Croisade, Goatworks Films 21 March 2011 (Cour dAppel de Paris) GERMANY GEMA v Rapidshare AG Unreported 12 June 2009 (LG (Hamburg)) Rapidshare AG v Capelight Pictures Unreported 22 March 2010 (OLG (Dsseldorf)) IRELAND EMI Records (Ireland) Ltd & Ors v Eircom Ltd & Anor [2005] IEHC 233 EMI Records (Ireland) Limited v Eircom Plc [2009] IEHC 411 EMI Records & Ors v Eircom Ltd [2010] IEHC 108 EMI Records (Ireland) Ltd & Ors v UPC Communications Ireland Ltd [2010] IEHC 377

NETHERLANDS Brein v Mininova B.V. Unreported August 26, 2009 (DC (Utrecht)) Brein v Ziggo Unreported July 19, 2010 (RB (Den Haag)) SWEDEN Public Prosecutor v Neij Unreported April 17, 2009 (TR (Stockholm)) Neij v Public Prosecutor Unreported November 26, 2010 (HR (Stockholm)) UNITED KINGDOM British Telecommunications Plc & Anor, R (on the application of) v The Secretary of State for Business, Innovation and Skills [2011] EWHC 1021 Norwich Pharmacal Company and Ors v Commissioners of Customs and Excise [1973] UKHL 6 Twentieth Century Fox and others v NewzBin Limited [2010] EWHC 608 EUROPEAN COMMUNITY REPORTS Joined Cases C236/08 Google France SARL, Google Inc. v Louis Vuitton Malletier SA, C237/08 Google France SARL v Viaticum SA, Luteciel SARL, and C238/08 Google France SARL v Centre National de recherche en relations humaines (CNRRH) SARL, Pierre-Alexis Thonne, Bruno Raboin, Tiger SARL [2011] ECR (page number unavailable at time of writing) Case C-324/09 L'Oral SA, Lancme parfums et beaut & Cie SNC, Laboratoire Garnier & Cie, L'Oral (UK) Limited v eBay International AG, eBay Europe SARL, eBay (UK) Limited, Stephan Potts, Tracy Ratchford, Marie Ormsby, James Clarke, Joanna Clarke, Glen Fox, Rukhsana Bi [2011] ECR (page number unavailable at time of writing) Case C-324/09 L'Oral SA, Lancme parfums et beaut & Cie SNC, Laboratoire Garnier & Cie, L'Oral (UK) Limited v eBay International AG, eBay Europe SARL, eBay (UK) Limited, Stephan Potts, Tracy Ratchford, Marie Ormsby, James Clarke, Joanna Clarke, Glen Fox, Rukhsana Bi, [2011] ECR (page number unavailable at time of writing), Opinion of Advocate General Jskinen Case C-70/10 Scarlet Extended SA v Socit Belge des auteurs, compositeurs et diteurs (SABAM) Case C-70/10 Scarlet Extended SA v Socit Belge des auteurs, compositeurs et diteurs (SABAM), Opinion of Advocate General Cruz Villaln.

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TABLE OF LEGISLATION
EU LEGISLATION Directives Directive 95/46/EC of the European Parliament and of the Council of 24 October 1995 on the protection of individuals with regard to the processing of personal data and on the free movement of such data. Directive 2000/31/EC of the European Parliament and of the Council of 8 June 2000 on certain legal aspects of information society services, in particular electronic commerce, in the Internal Market Directive 2001/29/EC of the European Parliament and of the Council of 22 May 2001 on the harmonisation of certain aspects of copyright and related rights in the information society Directive 2002/20/EC of the European Parliament and of the Council of 7 March 2002 on the authorisation of electronic communications networks and services Directive 2002/58/EC of the European Parliament and of the Council concerning the processing of personal data and the protection of privacy in the electronic communications sector Directive 2004/48/EC of the European Parliament and of the Council of 29 April 2004 on the enforcement of intellectual property rights Directive 2009/140/EC of the European Parliament and of the Council of 25 November 2009 amending Directives 2002/21/EC on a common regulatory framework for electronic communications networks and services, 2002/19/EC on access to, and interconnection of, electronic communications networks and associated facilities, and 2002/20/EC on the authorisation of electronic communications networks and service

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NATIONAL LEGISLATION Ireland Primary Legislation Copyright and Related Rights Act, 2000 Data Protection Act 1988 Data Protection Amendment Act 2003 Secondary Legislation SI 68/2003 European Communities (Directive 2000/31/EC) Regulations 2003 SI 16/2004 European Communities (Copyright and Related Rights) Regulations 2004 United Kingdom Copyright Designs and Patents Act 1998 Digital Economy Act 2010 Sweden Act on Copyright in Literary and Artistic Works 1960 as amended Germany Law on Copyright and Neighboring Rights (Copyright Law) 1965 as amended France Act No. 92-597 of 1 July 1992 on the Code of Intellectual Property Law No. 2006-961 of 1 August 2006 on Copyright and Related Rights in the Information Society

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Chapter 1 1.1

Digital Copyright Infringement

Introduction

Internet service providers (ISPs) could probably not exist if the law did not protect them from liability for abuse committed by their users to some extent. How much protection should they be afforded though is one question that the judiciary and stakeholders alike are struggling to answer. In the world of digital piracy, it is difficult to strike a balance between the competing rights of the intellectual property rights holders, consumers and intermediaries alike. I use the term intermediaries because the wider dispute encompasses not only ISPs, in the sense that they provide access to the Internet, but includes companies providing other internet services, such as YouTube and Google. The core of the debate is how to reconcile the fundamental rights of Internet users such as freedom of expression and privacy, and exclusive rights such as copyright. Ideally, the wrongdoer alone would be at the receiving end of any hypothetical lawsuit, but this is difficult in reality because of the very nature of the Internet and how it operates. The cost of access to the courts to obtain the kinds of injunctions necessary for this has proven to be an obstacle to the rightsholders. When one compares the costs of obtaining these injunctions with the recompense obtained, this method of enforcement would appear futile. Frustrated, rightsholders have turned their attentions toward access providers. They seek injunctions against the service provider to block websites, filter traffic on their networks, or implement what is commonly referred to as a three strikes system resulting in the eventual disconnection of the Internet account of a repeat infringer. Feeling that their industry is under threat, rightsholders will seek to do everything possible to conquer the battle that is digital piracy. Traditionally ISPs have been cooperative in a passive-reactive fashion, but recent trends in some jurisdictions illustrate a shift in this approach to a more active methodology. This shift in trend however brings with it a risk of transforming intermediaries into a private extra-judicial copyright police. These more active methods may be the subject of private agreements between the rightsholders and 1

the ISPs. Nonetheless they ought to be subject to certain safeguards. Some schemes are created by well thought out legislation as is the case in the UK. In legislating for copyright infringement, the legislature must be aware of the risks of undermining the limited liability regime provided for in European law and must not be so heavy handed in its laws as to be disproportionately burdensome on the intermediaries. It is vital that costs of implementation and other factors are given serious consideration in order to maintain an environment where ISPs operating in Ireland can remain competitive, particularly as the economy struggles to regain stability. Even more importantly, a real regard must be had for the privacy of the individual Internet user. The drafters must simultaneously however have regard for the rights of the creators of original artistic and creative works. In what is one of the most eagerly anticipated cases in this area of interest currently before the Court of Justice of the European Union, the Advocate General published his long awaited opinion in April last. This undoubtedly came as a great relief to ISPs since it was concluded that a measure ordering an ISP to filter or block electronic communications in order to protect intellectual property rights in principle infringes fundamental rights. The industry awaits the final judgment with baited breath as the CJEU finally begins to fill in the gaps that have existed in providing guidance to national courts on such matters until now. The opinion of Advocate General Cruz Villaln places the legal concept of proportionality centre stage in the debate. Any kind of injunction sought by rightsholders against ISPs must satisfy a proportionality test before they will be granted. In this jurisdiction such a lack of guidance has been particularly evident. Furthermore, it has been highlighted that there exists a gap in our national copyright laws leaving us in a position where we are out of line with our European counterparts. Where European law requires a Member State to ensure that a rightsholder is in a position to seek an injunction against a third party who provides facilities which are used to infringe copyright, the Copyright and Related Rights Act, 2000 fails to do so according to Charleton J in his controversial judgment of EMI v UPC in October 2010. Subsequent persistent lobbying from rightsholders and particular political motivations have resulted in a proposed 2

legislative amendment by way of Statutory Instrument to the aforementioned Act. Regrettably the wording of this proposed amendment is extremely broad and provides little or no direction to the judges presiding over what will inevitably result in a watershed of litigation. Even more unfortunate is the fact that this consultation has been carried out concurrent to and separate from a broader consultation in relation to potential amendments to the current legislation to promote innovation in Ireland. Public policy however is beyond the scope of this thesis and one must focus on the law, as it stands now, and how it may stand upon the adoption of such a Statutory Instrument. This thesis examines the existing European and national framework in relation to copyright and copyright enforcement, with emphasis on the ways in which these have been adapted, albeit inadequately in some instances, to cope with the rapid digitisation of society. Amendments made or proposed to such legislation, particularly in regard to the Internet are also scrutinised. The motivation behind this thesis is primarily the recent events arising as a result of the on-going discord between record companies and the internet service providers in this jurisdiction. The relevant cases are analysed in detail, along with the various hurdles posed to the judiciary. Specific national measures which have been or are in the process of being implemented in France and the UK are examined and their respective advantages and shortcomings are identified. Importantly I will address the essential issue of the on-going consultation regarding the proposed Statutory Instrument and its implications for all of the stakeholders involved.

Chapter 2 2.1

European Framework

Background

The existing European framework which sets the scene for copyright enforcement and intermediary responsibility imparts two primary themes which resonate time and again in any debate or case involving illegal file sharing and copyright theft on the Internet. These are the premise of mere conduit or the safe harbour regime as it is sometimes referred, and the injunctions system which enunciates the possibility for rightsholders to obtain an order against an ISP for the prevention of any infringement which is occurring on their network. There are three Directives detailed in this chapter which build the structure within which an ISP operates today. 2.1 Directive 2000/31/EC

Directive 2000/31/EC is titled on certain legal aspects of information society services, in particular electronic commerce, in the Internal Market hereinafter referred to as the E-Commerce Directive or ECD.1 This provides for the limited liability regime of ISPs and bestows the necessary protections upon intermediaries enabling them to operate without the fear of potential liability for the actions of their customers. The framers of the ECD have struck a very tenuous balance in its provisions and any interference with these provisions could potentially increase the burdens for legitimate commerce, creating a negative impact on innovation, distorting competition and undermining consumers fundamental rights to privacy and free flow of information. The ECD makes a number of defences available to intermediaries who either provide the mere conduit through which copyrighted material is transmitted, host content or cache information. The first of these defences specifies the conditions which must be satisfied in order to preclude the imposition of liability on a mere conduit intermediary and is set out in article 12 as follows:
1

Directive 2000/31/EC of the European Parliament and of the Council of 8 June 2000 on certain legal aspects of information society services, in particular electronic commerce, in the Internal Market.

1. Where an information society service is provided that consists of the transmission in a communication network of information provided by a recipient of the service, or the provision of access to a communication network, Member States shall ensure that the service provider is not liable for the information transmitted, on condition that the provider: (a) does not initiate the transmission; (b) does not select the receiver of the transmission; and (c) does not select or modify the information contained in the transmission. 2. The acts of transmission and of provision of access referred to in paragraph 1 include the automatic, intermediate and transient storage of the information transmitted in so far as this takes place for the sole purpose of carrying out the transmission in the communication network, and provided that the information is not stored for any period longer than is reasonably necessary for the transmission. 3. This Article shall not affect the possibility for a court or administrative authority, in accordance with Member States' legal systems, of requiring the service provider to terminate or prevent an infringement. Article 13 sets out the caching defence as follows: 1. Where an information society service is provided that consists of the transmission in a communication network of information provided by a recipient of the service, Member States shall ensure that the service provider is not liable for the automatic, intermediate and temporary storage of that information, performed for the sole purpose of making more efficient the information's onward transmission to other recipients of the service upon their request, on condition that: (a) the provider does not modify the information; 5

(b) the provider complies with conditions on access to the information; (c) the provider complies with rules regarding the updating of the information, specified in a manner widely recognised and used by industry; (d) the provider does not interfere with the lawful use of technology, widely recognised and used by industry, to obtain data on the use of the information; and (e) the provider acts expeditiously to remove or to disable access to the information it has stored upon obtaining actual knowledge of the fact that the information at the initial source of the transmission has been removed from the network, or access to it has been disabled, or that a court or an administrative authority has ordered such removal or disablement. 2. This Article shall not affect the possibility for a court or administrative authority, in accordance with Member States' legal systems, of requiring the service provider to terminate or prevent an infringement. Article 14 provides for the defence of hosting: 1. Where an information society service is provided that consists of the storage of information provided by a recipient of the service, Member States shall ensure that the service provider is not liable for the information stored at the request of a recipient of the service, on condition that: (a) the provider does not have actual knowledge of illegal activity or information and, as regards claims for damages, is not aware of facts or circumstances from which the illegal activity or information is apparent; or

(b) the provider, upon obtaining such knowledge or awareness, acts expeditiously to remove or to disable access to the information. 2. Paragraph 1 shall not apply when the recipient of the service is acting under the authority or the control of the provider. 3. This Article shall not affect the possibility for a court or administrative authority, in accordance with Member States' legal systems, of requiring the service provider to terminate or prevent an infringement, nor does it affect the possibility for Member States of establishing procedures governing the removal or disabling of access to information. Article 15 expressly requires that an intermediary should not be required to implement any general monitoring measures: 1. Member States shall not impose a general obligation on providers, when providing the services covered by Articles 12, 13 and 14, to monitor the information which they transmit or store, nor a general obligation actively to seek facts or circumstances indicating illegal activity. 2. Member States may establish obligations for information society service providers promptly to inform the competent public authorities of alleged illegal activities undertaken or information provided by recipients of their service or obligations to communicate to the competent authorities, at their request, information enabling the identification of recipients of their service with whom they have storage agreements. The prohibition in article 15 of the ECD to impose general monitoring obligations on ISPs as well as the conditional liability regime in articles 12 to 14, are rooted in the Council of Europes Convention for the protection of human rights and fundamental freedoms.

2.2

Directive 2001/29/EC

Directive 2009/29/EC is titled on the harmonisation of certain aspects of copyright and related rights in the information society hereinafter referred to as the Copyright Directive.2 The motivations behind this Directive were to respond to the challenges provided by the Internet and to adapt the copyright framework to the digital environment. The Directive affords a mandatory exemption of transient or temporary copying for technological purposes which was inserted as a result of lobbying by large ISPs and telecommunications companies who were concerned by the prospect of liability and felt that the safe harbour provisions in the E-Commerce Directive were not sufficient. According to some commentators these provisions may not have been necessary to begin with, and ironically have come to place even more of a burden on service providers which would otherwise have been the case due to the implementation of a standalone injunctive right for rightsholders to secure injunctions against service providers. 3 Article 5(1) allows for temporary acts of reproduction which are fundamental to the functioning of the Internet and states as follows: 1. Temporary acts of reproduction referred to in Article 2, which are transient or incidental [and] an integral and essential part of a technological process and whose sole purpose is to enable: (a) a transmission in a network between third parties by an intermediary, or (b) a lawful use

Directive 2001/29/EC of the European Parliament and of the Council of 22 May 2001 on the harmonisation of certain aspects of copyright and related rights in the information society. 3 Trevor Cook and Lorna Brazell, The Copyright Directive: UK Implementation (Jordans, 2004), at 95.

of a work or other subject-matter to be made, and which have no independent economic significance, shall be exempted from the reproduction right provided for in Article 2. Recital 33 further explains this The exclusive right of reproduction should be subject to an exception to allow certain acts of temporary reproduction, which are transient or incidental reproductions, forming an integral and essential part of a technological process and carried out for the sole purpose of enabling either efficient transmission in a network between third parties by an intermediary, or a lawful use of a work or other subject-matter to be made. The acts of reproduction concerned should have no separate economic value on their own. To the extent that they meet these conditions, this exception should include acts which enable browsing as well as acts of caching to take place, including those which enable transmission systems to function efficiently, provided that the intermediary does not modify the information and does not interfere with the lawful use of technology, widely recognised and used by industry, to obtain data on the use of the information. A use should be considered lawful where it is authorised by the rightholder or not restricted by law. The Copyright Directive contains a number of provisions in relation to the possibility of injunctions against ISPs. This Directive was issued one year after the Copyright and Related Rights Act, 2000 came into force in this jurisdiction. It was believed that the Directive had been correctly transposed and that the wording of article 40(4) provided a possibility for the granting of injunctions, for example to block a website such as the Pirate Bay. This would prove not to be the case, as will be seen in the ensuing chapters. Recital 59 of the Copyright Directive states the following: In the digital environment, in particular, the services of intermediaries may increasingly be used by third parties for infringing activities. In many 9

cases such intermediaries are best placed to bring such infringing activities to an end. Therefore, without prejudice to any other sanctions and remedies available, rightholders should have the possibility of applying for an injunction against an intermediary who carries a third party's infringement of a protected work or other subject-matter in a network. This possibility should be available even where the acts carried out by the intermediary are exempted under Article 5. The conditions and modalities relating to such injunctions should be left to the national law of the Member States. 2.3 Directive 2004/48/EC

Directive 2004/48/EC is titled on the enforcement of intellectual property rights hereinafter referred to as IPRED.4 The European Commission recently published its report5 on the application this Directive, in preparation for its eventual amendment, in order to adapt it to the new challenges inherent in a modern Digital Society.6 The report states that the Directive was not drafted with the challenges posed by the increase in opportunity for infringement offered by the Internet in mind. IPRED created a framework for harmonised enforcement of intellectual property rights throughout Europe. The report sets out specific areas in relation to the digital environment which may be in need of clarification, particularly regarding the liability of intermediaries and the workability of injunctions. This is particularly concerning to ISPs due to the possibility of injunctions aimed at prohibiting the continuation of the infringement against intermediaries whose services are being used by a third party to commit such infringements, as provided for in articles 9 and 11 of the directive.
4

Directive 2004/48/EC of the European Parliament and of the Council of 29 April 2004 on the enforcement of intellectual property rights. 5 European Commission, Report from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions on the application of Directive 2004/48/EC of the European Parliament and the Council of 29 April 2004 on the enforcement of intellectual property rights available at http://eurlex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2010:0779:FIN:EN:PDF (visited 8 April 2011). 6 Ibid.

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Article 9(1) provides for interlocutory injunctions against those whose services are being used by a third party to infringe copyright: Member States shall ensure that the judicial authorities may, at the request of the applicant: (a) issue against the alleged infringer an interlocutory injunction intended to prevent any imminent infringement of an intellectual property right, or to forbid, on a provisional basis and subject, where appropriate, to a recurring penalty payment where provided for by national law, the continuation of the alleged infringements of that right, or to make such continuation subject to the lodging of guarantees intended to ensure the compensation of the rightholder; an interlocutory injunction may also be issued, under the same conditions, against an intermediary whose services are being used by a third party to infringe an intellectual property right; injunctions against intermediaries whose services are used by a third party to infringe a copyright or a related right are covered by Directive 2001/29/EC; (b) order the seizure or delivery up of the goods suspected of infringing an intellectual property right so as to prevent their entry into or movement within the channels of commerce. Article 11 sets out the framework for injunctions: Member States shall ensure that, where a judicial decision is taken finding an infringement of an intellectual property right, the judicial authorities may issue against the infringer an injunction aimed at prohibiting the continuation of the infringement. Where provided for by national law, noncompliance with an injunction shall, where appropriate, be subject to a recurring penalty payment, with a view to ensuring compliance. Member States shall also ensure that rightholders are in a position to apply for an injunction against intermediaries whose services are used by a third party 11

to infringe an intellectual property right, without prejudice to Article 8(3) of Directive 2001/29/EC. The Commission is proposing to conduct an impact assessment pursuant to article 187 and a questionnaire8 was circulated to Member States earlier in the year focussing on some issues which they feel are in particular need of addressing. This consultation period ended on the 31st of March and we are now awaiting the resulting analysis. Whilst article 18 does require an assessment of the impact of the Directive at this time, a critical economic analysis of the impact has not been possible due to late transposition in some Member States, and without sufficient evidence of the necessity of this revision there is no justification for amendment at this time. Such premature amendments could potentially have considerable impact on ISPs.

Article 18 states that Three years after the date laid down in Article 20(1), each Member State shall submit to the Commission a report on the implementation of this Directive. 8 Council of the European Union, Working Document 6141/11 Brussels 4 February 2011, available at http://register.consilium.europa.eu/pdf/en/11/st06/st06141.en11.pdf (visited 26 July 2011). The questions posed by the Council pertaining specifically to intermediaries were as follows: Is there a need to introduce a common definition of intermediaries in the Enforcement Directive? Does your law contain specific provisions on injunctions against intermediaries, or do such injunctions have to be requested under the general rules? If there are specific provisions, what are these and are they used often? Is there a need to clarify in the Enforcement Directive that not only permanent injunctions are available against intermediaries but also interlocutory injunctions? Should other provisional or precautionary measures be available against intermediaries? Taking into account that certain measures are available against intermediaries even when they cannot be held liable for the infringing acts, is there a need to clarify the standing of an intermediary in IP infringement proceedings? Can an intermediary be deemed an unsuccessful party when an injunction is issued against it without establishing its liability for the infringement (e.g. relating to cost issues)? Should intermediaries (transport service providers, Internet platforms, ISPs) be involved to a greater extent in the prevention or termination of IP infringements? If yes, what ways would you deem appropriate?

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Chapter 3 European Copyright Jurisprudence --- A Pattern Developing 3.1 Introduction

The term ISPs encompasses not only Internet Access Providers who provide the mere conduit over which information flows on the network but also includes indexing and search services which are actively facilitating illegal file sharing, and hosting providers which lease server space to their users. The courts treat these very differently. The approach of the courts has been consistent in Member States in relation to its treatment of index and search providers. 3.2 Indexing and Searching 3.2.1 Newzbin (UK) Newzbin is an indexing and searching site which was held to be liable for primary and secondary copyright infringement by the High Court for England and Wales in March 2010. 9 Newzbin provides indexing services for the Usenet system which is a global system of online bulletin boards that users may read or contribute to. Its website describes it as the Google of Usenet10. The content posted to Usenet can be either in text or binary form. Binary files, which could include copyrighted movies for example, being substantially larger than a text file, must be split into more easily manageable parts in order to be processed. These parts will then be posted in separate messages in the newsgroup and a user wishing to download a particular movie must be sure to download all of the relevant parts. Newzbin processes and stores the header information of these separate messages in three main indices. A member of the site can then search these various indices for material by categories. One of these indices is a file format known as NZB which aids users in downloading these files in a quicker way than would usually be possible. It eliminates the need for a user to search for each individual relevant part manually.

10

Twentieth Century Fox and others v NewzBin Limited [2010] EWHC 608 http://www.newzbin.com/ (visited 7 June 2011).

13

The claimants contended that the defendant infringed their copyrights by: i) authorising acts of infringement by its members; ii) procuring, encouraging and entering into a common design with its members to infringe; iii) communicating the claimants copyright works to the public, namely the defendants members. They also claimed Newzbin was a service provider with actual knowledge of other persons using its service to infringe copyright and sought an injunction under section 97A of the Copyright, Designs and Patents Act 1988. Kitchin J identified what was meant by authorisation in this context as the grant or purported grant of the right to do the act complained of. It does not extend to mere enablement, assistance or even encouragement and went on to state that this grant or purported grant may be implied from the relevant circumstances, for example the level of control retained by the service provider. He analysed the application of these principles in Roadshow Films Pty Ltd v iiNet Ltd.11 Roadshow was primarily concerned with the question of whether iiNet, one of the largest ISPs in Australia, authorised infringing acts of some of its subscribers who were downloading copyrighted films. Proceedings were brought with the aim of preventing copyright infringement by means of a peer-to-peer system known as BitTorrent which was being used by these subscribers. The claim was dismissed for three reasons: first, because the copyright infringements occurred directly as a result of the use of the BitTorrent system and iiNet did not control and was not responsible for the operation of that system; second, because iiNet did not have a relevant power to prevent those infringements occurring; and third, because iiNet did not sanction, approve or countenance copyright infringement; it had done no more than supply an internet service to its users. In applying principles extrapolated from Roadshow and other caselaw, Kitchin J considered that Newzbin had authorised its users infringements. Relevant to this finding was the fact that by their very nature, the NZB files facilitate infringement, are created by the defendant and are entirely within their control.

11

Roadshow Films Pty Ltd v iiNet Ltd (No3) [2010] FCA 24

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In relation to the second part of the claim participation in a common design Kitchin J remarked that it is well established that a person who procures an infringement of copyright is liable joint and severally with the infringer. Mere (or even knowing) assistance or facilitation of the primary infringement is not enough to sustain a claim but the tortfeasor must have so involved himself in the tort as to make it his own. The factors considered above in relation to NZB files were also considered to be relevant to this part of the claim and the test was satisfied on the facts. Concerning the third part of the claim, the defendants were held primarily liable for infringement by communication to the public contrary to section 20 of the Copyright, Designs and Patents Act 1988 which implemented Article 3 of Directive 2001/29/EC. Kitchin J considered whether the copyrighted material had been made available to the infringing users by the defendants. Material in his decision here was the fact that its behaviour was not in any way passive, but on the contrary they have intervened in a highly material way. Importantly, with respect to injunctions against service providers pursuant to section 97A, the claimants failed in seeking an injunction to prevent Newzbin from indexing all copyrighted materials, even those of which they do not own the rights. Kitchin J declined to impose an injunction of this breadth and was satisfied that the injunction already granted extending only to the claimants repertoire was adequate. Commentators12 have stated that this case is significant because it was the first of its kind in the UK to hold an online service provider both primarily and secondarily liable for copyright infringement committed by its users. The activities of Newzbin are of a very different nature however to search engines or indeed access providers. Murray has noted that because of the refusal to grant the final

12

Darren Meal and Mark Shillito, Twentieth Century Fox Film Corp v Newzbin Ltd - copyright online service provider held liable for copyright infringements of its users E.I.P.R. 2010, 32(8), N67-72.

15

injunction sought, this is more of a limited victory for the claimants not the complete victory painted by some media outlets. 13 3.2.2 The Pirate Bay (Sweden) On April 17, 2009, the District Court of Stockholm handed down its judgment against the infamous Pirate Bay websites founders. 14 They were fined a sum equalling 2.7 million and each sentenced to one year imprisonment for copyright infringement. The Pirate Bay is a BitTorrent tracking, indexing and searching website. The BitTorrent protocol is a peer-to-peer system which allows for the wide distribution of large amounts of data without incurring large server costs and bandwidth consumption. The BitTorrent client or application is then used in the creation, up and downloading of torrent files. A tracker, such as the Pirate Bay, helps users to locate one another so that the initial file sharing can occur. A tracker is clearly instrumental in the entire process and has been identified as the first port of call in the assignment of indirect copyright infringement blame. 15 If a tracker is configured to do nothing more than merely track the torrent, then liability can be hard to establish. Most trackers however, in reality, act as both trackers and indexes and provide all of the features necessary to initiate downloads. 16 Swedish law differs from UK law in that authorising infringement, as discussed above, is not an existing ground upon which to base a claim of secondary liability. 17 Copyright infringement in Sweden is a criminal activity and is punishable as such. In the case at hand it was first necessary to establish that a crime had occurred. It was held that a communication to the public of copyright infringing material contrary to the Swedish Copyright Act (the Act on Copyright

13

Andrew Murray, UPDATE: Twentieth Century Fox v Newzbin The IT Lawyers Blog, available at http://theitlawyer.blogspot.com/2010/03/update-twentieth-century-fox-v-newzbin.html (visited 03/06/2011). 14 Public Prosecutor v Neij Unreported April 17, 2009 (TR (Stockholm)). 15 Okechukwu Benjamin Vincents, Secondary liability for copyright infringement in the BitTorrent platform: placing the blame where it belongs E.I.P.R. 2008, 30(1), 4-10. 16 Ibid. 17 Jerker Edstrom and Henrik Nillson, Case Comment: The Pirate Bay verdict predictable and yet E.I.P.R. 2009, 31(9), 483-487.

16

in Literary and Artistic Works 1960 as subsequently amended) had indeed occurred. The District Court then went on to consider whether the defendants had participated in furthering the copyright infringement. It was held that because the interface made infringement incredibly easy for the user, and because it facilitated contact between the users, they were liable.18 In relation to the part played by each of the defendants, they were deemed to have collectively furthered the infringement as they worked together as a team. In relation to the question of intent, it was contended that they did not have specific knowledge of the files that were being shared but the judge held that they had sufficient knowledge that infringements were occurring and specific knowledge was not necessary. There was also evidence presented displaying the commercial motives behind the website which held sway with the judge. One interesting point to note is that in the BitTorrent technology, users which collectively share a work, such as a movie, are referred to as a swarm. These users can be either seeders or leeches. A seeder is a computer which contains an entire torrent and offers it for upload. This can be compared with a leech, who does not initially have the complete torrent, but once they commence downloading, they simultaneously make the same files available for downloading by others via the BitTorrent client which they are using. This creates a more efficient environment. In the case at hand, the court held that both the seeder and leech were making works available which constituted communication to the public. Given that a seeder or leech generally only makes available fragmented pieces of the work, each piece will not usually be a standalone copyright-protected work. Edstrom and Nillson have suggested that it is possible, and perfectly reasonable that the Court has applied general criminal law principles and considered all participants in a swarm to be accomplices of the same crime of communication to the public. 19

18

Henrik Wistam & Therese Andersson, Case Comment: The Pirate Bay Trial C.T.L.R. 2009, 15(6), 129-130. 19 Ibid.

17

The defendants had demonstrated a blatant disregard for copyright owners rights and given the circumstances and background, the outcome was hardly surprising in this instance. The case was seen by the entertainment industry as a huge win for rightsholders in Sweden, which would arguably now be seen as a favourable jurisdiction for copyright infringement claims. In reality however, it has been referred to as more of a minor milestone20. The trial became a spectacle more due to the political implications that surrounded it and the huge anti-copyright movement which ensued, which lies outside of the scope of this thesis. The Court of Appeal upheld this decision in November 2010, decreasing the sentences of each of the parties upon assessing their liability individually, but increasing the damages payable by each. 21 3.2.3 Pirate Bay and Mininova (Netherlands) On 30 July 2009, BREIN, the Dutch association representing both the recording and movie industries, won a case against the Pirate Bay demanding that the site block access to all users in the Netherlands within ten days or face a penalty of 30,000 per day up to a maximum of 3 million. The judge ordered The Pirate Bay to desist and refrain from infringement in the Netherlands of the copyrights and neighbouring rights of the rightsholders represented by BREIN, including from the offering of services in the capacity of an intermediary within the meaning of article 26d of the Dutch Copyright Act. It subsequently transpired that the 3 owners of the site which were sued no longer had the power to block access and the site continued to be accessible. BREIN then turned their attention to a similar website. In August, in an unreported judgement22, the Utrecht District Court ordered Mininova to remove links to all copyright infringing material within three months or face a fine of 1000 per offending torrent up to a maximum of 5 million. Mininova is a search engine for BitTorrent files, similar to that of Pirate Bay. They were held liable for enabling, inducing and profiting from its users copyright infringements but it was not,
20 21

Ibid. Neij v Public Prosecutor Unreported November 26, 2010 (HR (Stockholm)). 22 Brein v Mininova B.V. Unreported August 26, 2009 (DC (Utrecht)).

18

however, liable for communicating or making available infringing works. 23 The site differs from the Pirate Bay in that it merely allows its users to store torrent files but does not itself index and categorise the stored information. Mininova were operating a Notice & Takedown procedure on their site but the court held that this was not enough and it should be assumed that all commercial works were copyrighted. The court said that it is generally known that commercially made films, games, music and TV series are copyrighted and that these works are only copyright-free in exceptional cases.24 3.2.4 RapidShare (Germany) In Germany in 2009 the District Court of Hamburg delivered their judgment in a case taken against RapidShare AG by the German rightsholders association GEMA. 25 RapidShare is a Swiss file hosting website, also known as a cyber-locker or web-locker, where users can upload large amounts of data and are provided with a download link for each file that they upload. This link may be used to by anybody who possesses it to download the files any number of times. RapidShare differs from the technologies discussed in the previous cases in that it does not provide any search functions for its users, nor does it categorise or index the content. There does however exist third party search engines which search RapidShare and similar sites, facilitating effortless copyright infringement. Cyberlockers have become increasingly popular in recent years, surpassing the BitTorrent technology as the method of choice for illegal file sharing.26 GEMA claimed that the defendant had not done enough to prevent the illegal uploading and downloading of non-licensed musical works, thus violating its
23

Simon Baggs and Rachel Barber, Case Comment: Twentieth Century Fox Film Corp v Newzbin Ltd a changing tide in the fight against online piracy: how significant is the Newzbin judgment? Ent. L.R. 2010, 21(6), 234-237. 24 Intellectual Property Magazine, Dutch court rules against file sharing site Mininova available at http://www.ipworld.com/ipwo/doc/view.htm?id=229019&searchCode=S&searchPage=basic_searc h&queryString=mininova (visited 7 June 2011). 25 GEMA v Rapidshare AG Unreported 12 June 2009 (LG (Hamburg)). 26 TorrentFreak Cyberlockers Take Over File-Sharing Lead From BitTorrent Sites http://torrentfreak.com/cyberlockers-take-over-file-sharing-lead-from-bittorrent-sites-110111/ (visited 12 June 2011). RapidShare and four other cyberlocker sites were listed in the top 100 visited websites ahead of the Pirate Bay in 2011 according to popular internet blog.

19

members copyrights by making the content publicly available within the meaning of section 19a of the German Copyright Act 27. The defendants claimed that the use of these files was excepted since it amounted to private use as provided for in section 53. Moreover, they claimed to have cooperated with rightsholders by removing infringing material once they were on notice of such files, and it was contended that they were using all appropriate and reasonable measures to prevent illegal copying. The court granted an injunction against RapidShare and held that they had wilfully contributed to the infringements. They had made the content publicly available within the meaning of section 19a and it thus fell outside the scope of the section 53 exception. It was held that the reactive approach of the defendant in cooperating with the rightsholders was not satisfactory and the removal of infringing links was insufficient since it did not prevent users from uploading the infringing file again. The court ruled that RapidShare, going forward, would have to monitor for potentially illegal uploads. In coming to this conclusion, the court considered a number of other matters, including the fact that the filtering system employed by the abuse department within RapidShare was insufficient because it could be easily circumvented. They also frowned upon the fact that the defendants systematically refrained from ascertaining the identity of its users, including those who signed up for paid membership. A similar case taken against RapidShare by Capelight Pictures has since been overturned by the Dusseldorf Court of Appeals which held that RapidShare is not liable for the infringements carried out by its users. 28 The court rejected the imposition of impractical filtering measures and held that RapidShare should not be under any obligation to prevent the dissemination of download links. This was seen as a huge victory for intermediaries who do not actively participate in the sharing of infringing files in the same way that a BitTorrent index and search provider for example does.

27 28

Law on Copyright and Neighboring Rights (Copyright Law) 1965 as amended. Rapidshare AG v Capelight Pictures Unreported 22 March 2010 (OLG (Dsseldorf)).

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3.3

Hosting Providers

The intermediaries which provide space on their servers to their subscribers, to allow them to connect a website to the Internet for instance, are known as host providers.29 A host provider does not make available its own content but instead merely provides a third party with connectivity by technically enabling them to publish their own content.30 It can be confusing because sometimes access

providers offer hosting services also. When you add social media sites such as Facebook and YouTube, where the site user generates the content, or bulletin boards such as boards.ie, to the mix it is hardly surprising that the water muddies. Host providers are subject to a notice and takedown procedure and usually once this is adhered to they cannot be held liable for infringement. As can be seen in Chapter 2, a defence of Hosting is provided in the E-Commerce Directive.31 3.3.1 Google Adwords The CJEU handed down its ruling in Google France32 commonly known as the Google Adwords case, in March 2010. This was a case involving Googles paid referencing service called Adwords. This is an advertising system which sells keywords to economic operators so that their business endeavour is placed in the search results in the sponsored links section of the Google search results page when a user conducts a searches using one or more of the keywords which have been purchased. This case related to trademark infringement but the court was also asked to rule on the liability of the referencing service provider, Google. The questions of whether a referencing provider such as Google was an information society service for the purpose of the E-Commerce Directive, and if so may they avail of limited liability as provided for in article 14 of said Directive,

29

Broder Kleinschmidt, An International Comparison of ISPs Liabilities for Unlawful Third Party Content (2010) International Journal of Law and Information Technology Vol. 18 No. 4, 332. 30 Ibid. 31 This was transposed into national law by SI 68/2003 European Communities (Directive 2000/31/EC) Regulations 2003. 32 Joined Cases C-236/08 Google France SARL, Google Inc. v Louis Vuitton Malletier SA, C237/08 Google France SARL v Viaticum SA, Luteciel SARL, and C-238/08 Google France SARL v Centre National de recherche en relations humaines (CNRRH) SARL, Pierre-Alexis Thonne, Bruno Raboin, Tiger SARL [2011] ECR (page number unavailable at time of writing).

21

were referred to the CJEU. It was held that such an advertising service does fall within the scope of information society service and as such they may be said to be providing hosting services for the purposes of the Directive. Whether they may be exempt from liability based on the article 14 defence depends on whether they play a neutral role. In other words, their conduct must be merely technical, automatic and passive, pointing to a lack of knowledge or control of the data which it stores.33 If the service provider has not played an active role then it cannot be held liable for the data which it has stored at the request of an advertiser, unless, having obtained knowledge of the unlawful nature of those data or of that advertisers activities, it failed to act expeditiously to remove or to disable access to the data concerned. 34 This is reassuring for service providers. Provided that they do not have knowledge of the infringing activity they will be allowed to avail of the article 14 hosting exemption. 3.3.2 Google Video In March 2011, the Paris Court of Appeal heard four similar cases 35 in relation to Google Video and imposed a monitoring obligation on Google to prevent future infringements of the litigious work. Illegal copies of protected works were placed on Google Video. The rightsholders notified Google Video pursuant to the notice and takedown regime which it implemented. These videos were removed by Google from their platform, but subsequently were made available again. On appeal it was held that Google were not entitled to avail of the hosting exemption. It was held that Google not only had an obligation to remove the videos which they had been notified of, but they also had a duty to monitor and prevent future access to these videos The court also considered that Google Video was going beyond the merely neutral and passive functions of a hosting provider. Some commentators have said that the court is recognising a new duty of

33 34

Joined Cases C-236/08 C-238/08, note 32, at 114. Joined Cases C-236/08 C-238/08, note 32, at 120. 35 Google Inc. v Compagnie des phares et balises; Google Inc. v Bac Films, the Factory; Google Inc. v Bac Films, the Factory, Canal +; and Google Inc. v Les Films de la Croisade, Goatworks Films 21 March 2011 (Paris Cour dAppel de Paris)

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surveillance.36 This is remarkable as it seems to transform the system of notice and takedown into a burdensome system of notice, takedown and keep down. This may be compared with the opinion of Advocate General Jskinen in the case of LOral v eBay.37 3.3.3 LOreal and Ebay In his opinion, the Advocate General communicates his reservations in relation to a neutrality-based assessment of a hosting provider as advocated in the Google France. According to the Advocate General, the court referenced Recital 42 when endorsing the neutrality-test but this recital, he feels, relates to 'mere conduit' and 'caching' providers, but not to a hosting provider. He makes the distinction between a referencing service provider and an electronic marketplace such as eBay and notes that if the conditions that were applied in Google France were applied to an electronic marketplace it would seriously endanger the objectives of the ECommerce Directive. 38 He stated that it would be surreal that if eBay intervenes and guides the contents of listings in its system with various technical means, it would by that fact be deprived of the protection of article 14 regarding storage of information uploaded by the users. 39 The Advocate General goes on to address the issue of future infringements where he reiterates the principle of notice and takedown. He recalls that an ISP is required to act expeditiously to remove infringing material of which he has actual knowledge. This actual knowledge may only relate to the past or the present and not to the future.40

36

Catherine Jasserand, Recent Decisions of the Paris Court of Appeal: toward an extra duty of surveillance for hosting providers? Available at http://kluwercopyrightblog.com/2011/03/29/recent-decisions-of-the-paris-court-of-appeal-towardsan-extra-duty-of-surveillance-for-hosting-providers/ (visited 14 June 2011). 37 Case C-324/09 L'Oral SA, Lancme parfums et beaut & Cie SNC, Laboratoire Garnier & Cie, L'Oral (UK) Limited v eBay International AG, eBay Europe SARL, eBay (UK) Limited, Stephan Potts, Tracy Ratchford, Marie Ormsby, James Clarke, Joanna Clarke, Glen Fox, Rukhsana Bi, [2011] ECR (page number unavailable at time of writing), Opinion of Advocate General Jskinen. 38 Case C-324/09, Opinion of Advocate General Jskinen, note 37, at 142. 39 Case C-324/09, Opinion of Advocate General Jskinen, note 37, at 146. 40 Case C-324/09, Opinion of Advocate General Jskinen, note 37, at 162.

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The CJEU handed down its judgment in this case on the 12 th July41 and in fact advocated a neutrality based test. It was recognised that liability is not automatic but that if the operator of an electronic marketplace provides a service that is not merely technical and automatic 42 and has played an active role having knowledge of, or control over, the data in relation to the goods offered for sale, they cannot rely on the article 14 exemption. 43 It is now for the referring court in the UK to assess whether eBay have played such a role. It was further held that even if the service provider plays a passive and neutral role, it may not rely on the exemption from liability if it was aware of facts or circumstances, having regard to which, a diligent economic operator ought to have known that such offers were unlawful and failed to act expeditiously. 44 With regard to injunctions preventing future infringements it was held that injunctions may be granted against the operator of an online marketplace to take measures which contribute, not only to bringing to an end infringements of those rights by users of that marketplace, but also to prevent further infringements of that kind. Those injunctions must be effective, proportionate, dissuasive, and must not create barriers to legitimate trade.45 This judgment could prove to be burdensome for intermediaries who are likely to have to bear the costs of implementing the technical measures necessary to prevent incurring liability. 3.4 Internet Access Providers

Litigation efforts have traditionally been directed toward those hosting or operating infringing websites such as the Pirate Bay but recently these efforts have begun to focus elsewhere. Over the course of the last year or so a number of judgments have been rendered in various Member States concerning Internet
41

Case C-324/09 L'Oral SA, Lancme parfums et beaut & Cie SNC, Laboratoire Garnier & Cie, L'Oral (UK) Limited v eBay International AG, eBay Europe SARL, eBay (UK) Limited, Stephan Potts, Tracy Ratchford, Marie Ormsby, James Clarke, Joanna Clarke, Glen Fox, Rukhsana Bi [2011] ECR (page number unavailable at time of writing). 42 Case C-324/09, note 41, at 113. 43 Case C-324/09, note 41, at 116. 44 Case C-324/09, note 41, at 124. 45 Case C-324/09, note 41, at 144.

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access providers and requests to implement blocking measures. These judgments illustrate the diverging approaches and views adopted across the EU. This is due to differences in national legislation or type of proceeding since these will be criminal proceedings in some jurisdictions and civil in others. Universally it would appear that whether an access provider will be ordered to block a particular website or not will depend upon satisfaction of the legal principle of proportionality, which I will discuss in more detail in a subsequent chapter. 3.4.1 Telenor (Denmark) In 2010 the Supreme Court of Denmark held that the blocking measures which Telenor were ordered to implement were in fact proportionate in the circumstances.46 This is a surprising outcome but on closer inspection, it becomes clear that this is due to a particular provision in Danish law in relation to copying the original protected work. As already discussed above, in order for efficient communications to occur via the Internet, temporary copies must be made of every packet of data that is transmitted. In doing so the intermediary is exempt from liability unless the work which is being transmitted is in itself illegal. In this case the temporary copies are held also to be illegal copies. This ruling places a huge burden on intermediaries to implement a technical measure which, as discussed in the subsequent chapter, has little effectiveness. 3.4.2 Ziggo (Netherlands) In the Dutch case mentioned in the previous subsection, BREIN were successful in their endeavours against the Pirate Bay, but nevertheless the site remained successful and active in the Netherlands. BREIN then turned their attention toward access provider Ziggo seeking a preliminary injunction ordering them to block

46

Telenor (tidligere DMT2 A/S og Sonofon A/S) v IFPI Danmark 27 May 2010 (Hjesterets) This case is available in Danish at http://www.domstol.dk/hojesteret/Documents/Domme/15309.pdf (visited 15 June 2011). Unofficial translation available at http://hssph.net/Sonofon_IFPI__DK_SupremeCourt_27May2010_PirateBay.pdf (visited 21 July 2011).

25

access for its subscribers to all of the sites of the Pirate Bay. On 19 July 2010 the court of The Hague rejected the claim. 47 BREIN based their claim on the IPRED provision which states that injunctions may be sought against innocent third parties whose facilities are used in the course of infringement. Ziggo stressed that it was a mere conduit and the Court held that while injunctions may be taken against third party intermediaries as a separate action notwithstanding the liability regime set down for ISPs in the national rules transposing the relevant provisions of the E-Commerce Directive, this would only apply in specific and identifiable cases of infringement. The granting of an injunction would otherwise be disproportionate. The judge also considered the principle of subsidiarity in delivering his judgement. While BREIN claimed that this was the last resort, it was held that they could in fact have pursued individual infringers in what would have been a less farreaching option than imposing a general blockade. 3.4.3 Belgacom and Scarlet (Belgium) On the 9th of July 2010, the Antwerp Commercial Court refused to impose an injunction to block access to The Pirate Bay on service providers Belgacom and Telenor.48 This had been sought by the Belgian Anti-Piracy Foundation. The implementation of such a measure was held to be disproportionate. The ISPs argued that they were merely technical operators and did not have the competence to judge whether a site that a subscriber wishes to access is unlawful or not. 49 This case has been appealed and the oral hearings took place before the Antwerp Court of Appeal in May. There is no publicly available information in relation to this case and at the time of writing the Court is yet to present its judgment. Interestingly in the same jurisdiction the Belgian Court of Appeal is awaiting the ruling of the CJEU in the case of Scarlet Extended.50 A case was taken by Belgian collecting society Socit Belge des auteurs, compositeurs et diteurs (SABAM)
47 48

BREIN v Ziggo Unreported July 19, 2010 (RB (Den Haag)). Belgian Anti-Piracy Federation v Belgacom Unreported 8 July 2010 (RvK (Antwerp)). 49 http://www.edri.org/edrigram/number8.14/belgium-isps-pirate-bay (visited 15 July 2011). 50 SABAM v Tiscali Unreported January 28, 2010 (App (B)).

26

against Scarlet (then Tiscali), an ISP, seeking an injunction requiring them to make it impossible for their subscribers to engage in the illegal file sharing of any musical work in SABAMs repertoire. This was granted by the Court of First Instance, essentially requiring Scarlet to implement a preventive filtering and blocking system. 51 The Court of Appeal referred the case to the CJEU for a preliminary ruling. The Advocate General delivered his opinion in April 2011 and this is discussed in the ensuing chapter. 3.4.4 UPC (Austria) In an extremely recent case taken by the Austrian Association for Anti-Piracy (VAP), Internet access provider UPC was ordered by the Commercial Court of Vienna to block access to streaming website kino.to which was hosted from the island of Tonga. 52 It was held in the circumstances that such measures are proportionate once enforced with DNS or IP blocking but monitoring measures such as deep packet inspection were considered to be disproportionate. In this particular case the sites administrators could not be identified. The judgement which was rendered on the 17th of May 2011 was highly controversial and UPC is expected to appeal. The case was extremely similar to the above mentioned Dutch case of BREIN v Ziggo, the outcome of which was to the contrary. 3.4.5 UPC (Ireland) In this landmark case judgment was given in favour of service provider UPC and the injunction sought by the plaintiffs was refused.53 UPC had claimed that it had no liability under the Copyright and Related Rights Act, 2000 and argued that it was a mere conduit for illegal downloading. Charleton J said that while injunctive relief was merited on the facts of the case, respect for the doctrine of the separation of powers prevented the granting of the orders sought. Interestingly, Charleton J said that he had erred in his previous judgment in the Eircom54 case as there was no legislative basis in Irish law that enabled him to reach the conclusions he did
51 52

SABAM v SA Tiscali [2007] ECDR 19. Constantin Film Verleih GmbH and Wega Filmproduktionsgesellschaft mbH v UPC Telekabel Wien GmbH Unreported 17 May 2011 (HW(Vienna)). 53 EMI Records (Ireland) Ltd & Ors v UPC Communications Ireland Ltd [2010] IEHC 377. 54 EMI Records (Ireland) Limited v Eircom Plc [2009] IEHC 411.

27

and he invited the parties involved in that case to reapply to the Courts. These cases are discussed in more detail in Chapter 5.

28

Chapter 4 Options Available for IAP Action & Striking a Balance 4.1 What in theory can an IAP actually do and can it work?

There are a number of mechanisms that an Internet access provider could hypothetically implement on their infrastructure to combat illegal file sharing of copyrighted content including blocking and filtering measures or the

implementation of a graduated response regime. Each of these will be considered in turn below. These methods however are either ineffective or they do not satisfy the requisite principle of proportionality as discussed in the opinion of the Advocate General in Scarlet Extended which is currently before the Court of Justice of the European Union. 55 Technical experts insist that the term Internet Blocking is somewhat of a misnomer because it gives the impression that it can be implemented with little or no difficulty and it is simply a choice to switch on or switch off. 56 This is certainly not the case. It involves complex and costly technologies which can be easily circumvented. The Internet is inherently designed to ensure the free flow of data so that any barriers which materialise will be sidestepped. Regrettably Internet blocking is a tool that is sought on the foot of political or emotional motivations rather than implemented as a result of evidence of any genuine effectiveness. 4.1.1 DNS Blocking The Internet is essentially a network of smaller interconnected networks. Each device on the network is associated with a unique sequence of numbers known as an IP address. When information is transmitted from one device to another, it is broken into what are known as packets, containing origin and destination IP addresses among other information, sent across multiple networks, and
55

Case C-70/10 Scarlet Extended SA v Socit Belge des auteurs, compositeurs et diteurs (SABAM). 56 Cormac Callanan et al. Study: Internet blocking: balancing cybercrime responses in democratic societies, (Aconite Internet Solutions, 2009) available at http://www.aconite.com/sites/default/files/Internet_blocking_and_Democracy.pdf (visited 21 July 2011).

29

reassembled at the destination device. A host or server will generally have a Domain Name System address or DNS address as well as an IP address. The DNS is a system that was designed to make the Internet easier to use by associating words rather than number sequences with the host or server. As an example, take the infamous Pirate Bay website whose DNS address is thepiratebay.org. When this address is entered into a browser a DNS server resolves this to its IP address which is 194.71.107.15 and subsequently the user is connected to the requested website. If a service provider blacklists the domain of a particular website in their DNS server then the DNS address when entered by the user cannot be resolved to the corresponding IP address rendering the site inaccessible.
57

This type of blocking

can be easily eluded if the user has knowledge of the actual IP address itself since they may type this directly into the browser gaining access to the rogue site. This can potentially be obtained by something as simple as performing a web search. 4.1.2 IP Blocking This is a more effective method of blocking but it has more wide reaching side effects. With IP blocking or packet dropping, a blacklist is made containing IP addresses so that packets containing the blacklisted IP sequence are dropped preventing any attempted communication with the aberrant server. 58 The problem with this method is that an IP address can be associated with a server which hosts many sites, which may all be legitimate except for one. This carries with it a huge risk of over-blocking. If such a regime were sought to be imposed on ISPs they would most likely want some kind of indemnification from the music companies to protect them in the likelihood that they will be sued for blocking a legitimate site. This type of blocking may be easily skirted by the person operating the blocked site. All that is required is merely to adopt a new IP address and the blocking measure is rendered useless. Likewise the user need not be an expert in order to
57

Jonathan Zittrain and Benjamin G. Edelmann, Internet Filtering in China (2003) Cyberlaw Vol. I, 585. 58 Ibid.

30

evade this type of blocking mechanism.

59

This can be done by using a proxy that Websites exist such as

connects to the website on behalf of the user.60

http://zend2.com which uses a mirrored server with the help of which your IP and other details are always concealed 61 or http://tools.rosinstrument.com/proxy/ which provides vast libraries of publicly available proxies. 62 4.1.3 Filtering Content filtering is a more complex mechanism which involves real-time intervention by the ISP. A list of forbidden URLs is compiled and the service provider can implement a proxy or a firewall that checks every URL request of a subscriber against this list.63 If a subscriber requests a blacklisted URL they will receive an error message or may be redirected to a legitimate site where legal copies of the material they seek are available.
64

This is a very precise method

which does not pose the same threats of over-blocking as the previous options. It does however involve the implementation of extremely complex and costly equipment which hampers the efficiency of data transmission to the detriment of the subscribers, the ISP and the Internet community. 4.1.4 Graduated Response Graduated response is a system in which a service provider sends a number of infringement notices to a subscriber who is using their Internet account to illegally download protected musical works. These notices increase in gravity with each instance ultimately resulting in suspension or disconnection of the subscribers account if they continue to infringe. This procedure, or variations of it, including the Hadopi system in France and the private agreement which has been
65

59

Joe McNamee, Internet Blocking: Crimes should be punished and not hidden http://www.edri.org/files/blocking_booklet.pdf (visited 21 July 2011). 60 Kleinschmidt, note 22. 61 www.zend2.com (visited 21 July 2011). 62 Richard Clayton, Anonymity and Traceability in Cyberspace Ph.D. (University of Cambridge, 2005). 63 Kleinschmidt, note 22, at 336. 64 Ibid. 65 Ibid.

31

implemented in this jurisdiction by Eircom, is discussed in more detail in the ensuing chapters. 4.2 Striking a Balance Proportionality and Effectiveness

Whilst Member States, pursuant to their European obligations under the Directives discussed in chapter 2, provide in their national laws for injunctions regimes which may potentially encompass such blocking or filtering obligations as set out above, it is crucial that such measures satisfy the principle of proportionality. Article 8(1) of the Copyright Directive provides that sanctions must be effective, proportionate and dissuasive. This is reiterated in article 3 of the IPRED which also stipulates that these sanctions must be fair and equitable. In what will be the most important decision in relation to the imposition of monitoring obligations on ISPs, the Court of Justice is expected to deliver its decision at the end of this year. 66 This will provide much needed guidance to judges presiding in cases where rightsholders are seeking injunctions of the kind discussed above. Advocate General Cruz Villaln delivered his opinion in Scarlet Extended on 14th April, stating that a general obligation to monitor, in abstracto, and as a preventative measure could not be imposed.67 Although the Advocate General opinion is a non-binding guideline, the CJEU usually tends to follow the same reasoning and ISPs are hopeful that the CJEU ruling will finally provide some sensible guidance on the matter. SABAM sought an injunction against Scarlet, an ISP, requiring it to impose technical measures to make it impossible for its subscribers to engage in the illegal file sharing of any musical work in the repertoire of the collecting agency. The injunction was granted by the Court of First Instance, requiring Scarlet to implement a preventive filtering and blocking system. The Court of Appeal referred two questions to the CJEU as follows: does EU law permit a national court to order an ISP, in abstracto and for all of its customers, bearing all of the
66 67

Case C-70/10, note 55. Case C-70/10 Scarlet Extended SA v Socit Belge des auteurs, compositeurs et diteurs (SABAM), Opinion of Advocate General Cruz Villaln.

32

costs, to introduce a filtering and blocking system, for works in which the applicant claims to hold rights; and effect of the measure sought.68 The Advocate General pointed out that this constitutes a general obligation to monitor as a preventive measure, such that a finding that there had been an actual infringement would not have first been made. Furthermore it would make the ISP fully responsible for the costs of implementing such a measure. He went on to note that such a system would impose a restriction on rights of privacy and protection of personal data which are protected under the Charter of Fundamental Rights. While it is accepted that the exercise of such rights may be restricted, this may only be done in accordance with the law and must meet requirements concerning the quality of the law at issue. As such, a restriction of this kind would only be permissible if it were pursuant to national laws that are accessible, clear and predictable. 69 Advocate General Jskinen in LOral v Ebay stated that in granting an injunction against an intermediary, given the requirement of proportionality, what is crucial, is that the intermediary can know with certainty what is required from him, and that the injunction does not impose impossible, disproportionate or illegal duties like a general monitoring obligation. 70 Advocate General Cruz Villaln noted in his opinion that the Belgian statutory provision at issue did not provide expressly in clear, precise and predictable terms, for an obligation on ISPs to install such a general monitoring obligation. 71 Since the provisions of national law in most Member States implementing article 8(3) of the Copyright Directive are very similarly worded to the Belgian provision it follows that none of the national law provisions are sufficiently clear to justify if so must the national court apply the

principle of proportionality when deciding on the effectiveness and dissuasive

68

Reference for a preliminary ruling from the Cour dappel de Bruxelles (Belgium) lodged on 5 February 2010 - Case C-70/10 Scarlet Extended SA v Socit Belge des auteurs, compositeurs et diteurs (SABAM). 69 Court of Justice of the European Union Press Release No 37/11 Luxembourg 14 April 2011. 70 Case C-324/09, Opinion of Advocate General Jskinen, note 37, at 181. 71 Court of Justice of the European Union, note 69.

33

filtering or graduated response obligations. As such, the introduction of any graduated response measure for example, would require statutory footing. In relation to effectiveness, in order for a blocking or filtering measure to satisfy the proportionality test, it is conceded that no measure is 100% effective, so what is important here is that the obligation is clearly identified. In other words if the court says to an ISP, you must implement measures x, y, and z and after you have done this you cannot be held liable, this will be sufficiently clear and specific. What is not acceptable however is for a court to say you must ensure that your subscribers cannot access a certain site but it is up to you how you implement this. This opens up the possibility of liability for the access provider as of the moment that one subscriber can access the prohibited site. Cost allocation issues may be taken into consideration at this point also. Huge costs burdened on Scarlet were acknowledged as unfair by AG Cruz Villaln in his opinion. The importance of cost allocation was also highlighted in the judicial review of the Digital Economy Act in the UK. 72 This was the only ground upon which BT and TalkTalk were partially successful in - all other grounds were dismissed. This is discussed in more detail in Chapter 6.

72

British Telecommunications Plc & Anor, R (on the application of) v The Secretary of State for Business, Innovation and Skills [2011] EWHC 1021.

34

Chapter 5 5.1

Ireland - A chronology of case law

Introduction

The current legislative conditions in Ireland in the area of copyright have given rise to contradictory judgments and lengthy debates. The Government launched a national copyright review in May and it is presently an incredibly controversial topic. This chapter presents the case law in chronological order which illustrates the attitudes of the courts, music industry and intermediaries concerning the enforcement of copyright against illegal file sharing in this jurisdiction. 5.2 Norwich Pharmacal

In a 2005 dispute73, the High Court granted what is known as a Norwich Pharmacal order to the music industry instructing Irelands largest ISP Eircom to release the names and contact information corresponding to the IP addresses of seventeen subscribers who had allegedly infringed the copyright of a number of sound recordings which were vested in the plaintiffs. This rule was enunciated in a House of Lords decision74 where Lord Reid stated that if through no fault of his own a person gets mixed up in the tortious acts of others so as to facilitate their wrong-doing he may incur no personal liability but he comes under a duty to assist the person who has been wronged by giving him full information and disclosing the identity of the wrongdoers.75 A Norwich Pharmacal order differs from other orders in that generally only parties named in existing litigation are obliged to disclose documents and other information relevant to the proceedings. It must only be used as a last resort. If other methods are available to discover this information then these avenues must be exhausted firstly. These orders have been adapted for use against ISPs where copyright infringement is concerned. An ISP is not committing any infringement yet they are the only means of permitting identification of the transgressor. An Internet user is assigned, by their ISP, a unique number known as an Internet
73 74

EMI Records (Ireland) Ltd & Ors v Eircom Ltd & Anor [2005] IEHC 233. Norwich Pharmacal Company and Ors v Commissioners of Customs and Excise [1973] UKHL Ibid.

6.
75

35

Protocol or IP Address. These can be static or dynamic and are a means of identifying the subscriber. If it can be established in the High Court that there is sufficient evidence of a wrongdoing the order may be granted. Usually an undertaking of damages will be required also. Kelly J emphasised that there was no suggestion of wrongdoing on the part of the Defendants but that there was no other method available to the plaintiffs to ascertain the identities of the individuals in this case. 5.3 Graduated Response

The process of obtaining a Norwich Pharmacal order is an expensive one and as such rightsholders began to seek other means to prevent infringement and turned their focus to ISPs. In 2009 proceedings were again taken against Eircom by EMI and the other big players in the music and film industry. The basis of this claim lay in section 40(4) of the Copyright and Related Rights Act 2000 which reads as follows: (3) Subject to subsection (4), the provision of facilities for enabling the making available to the public of copies of a work shall not of itself constitute an act of making available to the public of copies of the work. (4) Without prejudice to subsection (3), where a person who provides facilities referred to in that subsection is notified by the owner of the copyright in the work concerned that those facilities are being used to infringe the copyright in that work and that person fails to remove that infringing material as soon as practicable thereafter that person shall also be liable for the infringement After eight days of evidence an agreement was effected between the parties and no court order was thus required. On the 29 th of January the terms of the settlement were filed with the court. It essentially constituted a private agreement between the parties and thus did not create any precedent for other ISPs in the jurisdiction. The exact details of the protocol remain confidential. 36

This introduced the first graduated response system in Ireland. The Irish Recorded Music Association (IRMA) use software to detect the occurrence of illegal file sharing and on foot of this provide Eircom with notifications containing among other things the IP addresses of the individuals uploading or downloading such content. Eircom can then identify the account which matched the particular IP address at the time when the alleged infringing incident occurred. Rather than divulge this information to IRMA, Eircom sends the customer a notification informing them that their IP address has been identified by IRMA as infringing copyright. The notification advises the customer that these acts are illegal and provides information on how the customer can avoid repeating the infringement. If the customer continues to engage in infringement, after a fourteen day period has passed, Eircom will issue a second warning to the customer in the form of a letter indicating that if the infringement continues the customers Internet service will be disconnected. If Eircom is notified that a third infringement has occurred they will write to the customer to advise them that their service will be withdrawn for a seven day period as they have continued to engage in copyright infringement. If the customer infringes a fourth time then their Internet connection will be disconnected for a 12 month period. Under the terms of the settlement it was agreed that the plaintiffs would take proceedings against the other access providers in the State, since it would be unfair to expect Eircom to carry the entire burden alone. It was also agreed that Eircom would not oppose an injunction ordering them to block the Pirate Bay website. 5.4 The Pirate Bay

On the 24th July 2009, Charleton J delivered an ex tempore judgment 76 granting an order against Eircom to block access to the Pirate Bay. Since in the main proceedings as discussed above it was agreed that such an application would not be objected to by Eircom, an argument from only one of the parties was heard.
76

EMI Records (Ireland) Ltd v Eircom PLC [2009] IEHC 411.

37

Charleton J quoted section 40(4) of the Copyright and Related Rights Act 2000 as the basis for his conclusion and goes on to explain that this section gives an entitlement in the right circumstances to the plaintiffs to seek an order against a party who is essentially innocent in relation to copyright infringement, in distinction to those actively stealing copyright material through the act of copying without authorisation and facilitating it.77 Charleton J places Eircom in this bracket of innocent transmitter. The so called innocent transmitter once notified of the infringement that is occurring must act as soon as practicable to remove the infringing material before they in themselves become liable. The Judge in this case interpreted this section as encompassing what he refers to as the pipe or channel.down which the copyright infringing material is going. 78 An order was granted requiring the defendant to block or otherwise disable access by its internet subscribers to the website - thePirateBay.org and related domain names, as set out in the schedule, to IP addresses and URLs, as set out in the schedule, together with such other domain names, IP addresses and URLs as may reasonably be notified as related domain names by the plaintiffs to the defendant from time to time.79 As of the 1st of September 2009 if an Eircom subscriber attempts to access the forbidden URL they will be redirected to a page explaining why the site is not available. The music industry seemed to have found a sympathetic ear with Charleton J but their increasing confidence would be dealt a blow in the following months when he would change his mind as to the legislative basis in Irish law for the granting of such an injunction. 5.5 Data Protection Implications

In April 2010 the graduated response protocol again came before Charleton J as its implementation raised a number of issues concerning the Data Protection Acts 1988-2003.80 The Data Protection Commissioner (DPC) did not appear before the
77 78

[2009] IEHC 411, note 76. [2009] IEHC 411, note 76. 79 [2009] IEHC 411, note 76. 80 EMI Records & Ors v Eircom Ltd [2010] IEHC 108.

38

courts due to an issue relating to indemnity for his costs and as such judgment was delivered upon only receiving the advice of the parties to the main case. The questions raised are paraphrased as follows: 1. Do IP adresses in the hands of EMI, taking into account the purpose for which they are collected, constitute personal data for the purposes of the Data Protection Acts 1988-2003? 2. Having regard to section 2A(1) of the 1988 Act, and assuming that the processing by Eircom of personal data in the context of the termination of a users Internet subscription is necessary for the purposes of the legitimate interests pursued by Eircom, does much processing represent unwarranted processing by reasons of prejudice to the fundamental rights and freedoms or legitimate interests of the data subject? 3. Having regard to section 2A(1) and 2B(1) of the 1988 Act, may the parties to the settlement implement the graduated response process where: (a) in doing so they are engaged in the processing of personal data; and (b) the termination of Internet access is predicated on the commission of an offence without such offence having been investigated by an authorised body or determined by a court of competent jurisdiction? Section 1 of the 1988 Act, as amended, defines personal data as data relating to a living individual who can be identified either from the data or from the data in conjunction with other information in the possession of the data controller.81 According to Charleton J in order to be personal data under the Act the information has to identify a living individual from the data or from data in conjunction with other information in the possession of the data controller, or from other information that is likely to come into the possession of the data controller.82 He goes on to state that the only possible means for the data controller to ascertain the identity of a person relating to a particular IP address is

81 82

Data Protection Act 1988, s.1. [2010] IEHC 108, note 80, at 23.

39

to obtain a Norwich Pharmacal in an expensive process though the courts. He therefore answered the first question in the negative. 83 Charleton J, in answering the second question, felt that he must first ascertain if it was necessary for Eircom to enter into the agreement. He also addressed whether the protocol interfered with any fundamental right and if so whether such interference was proportional and justified. Section 2A(1) of the Act states as follows: 2A -(1)Personal data shall not be processed by a data controller unless section 2 of this Act (as amended by the Act of 2003) is complied with by the data controller and at least one of the following conditions is met: (a) the data subject has given his or her consent to the processing or, if the data subject, by reason of his or her physical or mental incapacity or age, is or is likely to be unable to

appreciate the nature and effect of such consent, it is given by a parent or guardian or a grandparent, uncle, aunt, brother or sister of the data subject and the giving of such consent is not prohibited by law, (b) the processing is necessary (i)for the performance of a contract to which the data subject is a party, (ii) in order to take steps at the request of the data subject prior to entering into a contract, (iii) for compliance with a legal obligation to which

the data controller is subject other than an obligation imposed by contract, or (iv) to prevent -

83

[2010] IEHC 108, note 80, at 25.

40

(I) injury or other damage to the health of the data subject, or (II) serious loss or damage to property of the data subject ,or otherwise to protect his or of her vital interests

where the seeking of another person subsection is being damaged, (c) the processing is necessary -

the consent

the data subject or (a) of this

referred to in likely

paragraph

to result

in those interests

(i) for the administration of justice, (ii) for the performance of a function conferred on a person by or under an enactment, (iii) for the performance of a function of the Government or a Minister of the Government, (iv) for the performance of any other function of

a public nature performed in the public interest by a person, (d) the processing is necessary pursued by for the purposes of by

the legitimate interests

the data controller or

a third party or parties to whom the data are disclosed, except where the processing is unwarranted in any particular case by reason of prejudice to the fundamental rights and freedoms or legitimate interests of the data subject. Charleton J. considered that more than one of the conditions set out in the above provisions are met regarding Eircoms legitimate interests, particularly their interest in upholding the law. He stated that it is completely within the legitimate standing of Eircom to act, and be seen to act, as a body which upholds the law. 84

84

[2010] IEHC 108, note 80, at 29.

41

He mentions that the subscriber contract specifies that access may be terminated if the subscriber uses the facility to infringe the copyright of others. He therefore found that the processing, warning, and ultimately disconnecting was necessary both in complying with the law and in performance of the contract. 85 Furthermore, it was held that there was nothing disproportionate in the ultimate sanction of disconnection for three infringements of copyright and that there were adequate procedural safeguards in place.86 Therefore the second question was also answered in the negative. In relation to the third question, Charleton J. acknowledged that while there are instances when both criminal and civil offences overlap by reason of statute, he was satisfied that none of the parties were interested in detection and prosecution of any criminal offence here and that there was nothing in the protocol which would involve the disposal of proceedings or the sentence of any court. 87 On the contrary the protocol was based upon civil principles which do not require an examination of knowledge, intention, recklessness or negligence. He therefore considered that it was not necessary to require an investigation by an authorised body or determination by a court of competent jurisdiction. 88 Consequently the third question was answered in the affirmative and it was declared lawful for the parties to implement the graduated response protocol. 89 The judgment of Charleton J. has been criticised as deeply flawed 90 and the Data Protection Commissioner may also be criticised for allowing this case to be heard without sending any representation to give information that was necessary in order for the judge to gain a broader view of the issues at hand. It was predicted upon implementation that it would be likely that Eircom would end up wrongly accusing innocent Internet users of copyright infringement. 91 This has in fact transpired and
85 86

[2010] IEHC 108, note 80, at 29. [2010] IEHC 108, note 80, at 30. 87 [2010] IEHC 108, note 80, at 40. 88 [2010] IEHC 108, note 80, at 41. 89 [2010] IEHC 108, note 80, at 42. 90 TJ McIntyre Data Protection Commissioner investigating Eircoms three strikes system IT Law in Ireland available at http://www.tjmcintyre.com/2011/06/300-false-accusations-dataprotection.html (visited 23 June 2011). 91 TJ McIntyre Eircom, three strikes and false positives IT Law in Ireland available at http://www.tjmcintyre.com/2009/08/eircom-three-strikes-and-false.html (visited 23 June 2011).

42

the graduated response protocol is now being investigated by the DPC, which according to TJ McIntyre has the potential to derail the entire system. 92 An internal error which occurred when the clocks went forward last October caused approximately 300 subscribers to receive warning notifications erroneously. This has called the entire protocol into disrepute and has triggered a wider investigation into its proportionality. At the time of writing this investigation was on-going. 5.6 UPC 5.6.1 Background Upholding their side of the graduated response settlement, EMI and the other music companies went on to pursue additional ISPs in Ireland seeking to impose the implementation of a similar regime. Vodafone agreed that it would follow suit93 but UPC refused and the issue again came before Charleton J in the High Court in October 2010 and a surprising turn of events saw UPC secure a victory, albeit on a technicality. 94 The plaintiffs sought an injunction pursuant to sections 37 and 40(4) of the Copyright Act 2000 restraining UPC from infringing the copyright in music works owned by or licensed to the plaintiff companies by making these available through the provision of internet facilities, along with an order to block the Pirate Bay website. UPC claimed that there was no liability in law for acting as a mere conduit and the sections of the 2000 Act permitting injunctions do not apply. Moreover, such an injunction would not be just or convenient as it would infringe fundamental rights and the principle of proportionality. 5.6.2 Attitude of UPC In a lengthy judgment Charleton J. condemned the attitude of UPC towards the use of its services for copyright infringement. He remarks that the customer use policy

92 93

Ibid. Ronan McGreevy, Vodafone in line to join file-sharing clampdown The Irish Times, 6 June 2010, available at http://www.irishtimes.com/newspaper/ireland/2010/0616/1224272615990.html (visited 25 July 2011). 94 [2010] IEHC 377, note 53.

43

provides for the possibility of termination of the contract if the services of UPC are used to infringe copyright, as does the policy of Eircom. He comments that UPC does not abide by their policy however, unless they can profit from it. Charleton Js tone throughout the judgment displays a similar air of disdain toward UPC and his viewpoint relating to the role of intermediaries and their economic and moral obligation to address the problem is evident.95 5.6.3 Possible Solutions Charleton J. considered a number of possible solutions. He did confirm that he was against the idea of any solution based on the blocking or severe constriction of all peer to peer traffic unless the harm is demonstrated to be so grave as to illegal file sharing of copyright material as to render that both necessary and just.96 This would otherwise be unreasonable since peer to peer technology did have its legitimate uses, even if these were in the minority. The solutions which he identified as satisfying the principle of proportionality and inexpensive to implement include Detection, Global File Registry, and CopySense. Detection involves the use of software such as DtecNet which searches the network to trace copyrighted files being shared. It then records the IP address of the person sharing these files along with information about the files themselves. Although this method can be evaded by use of a proxy IP address or by using encryption, Charleton J. nevertheless came to the conclusion that this solution is both viable and proportionate.97 The Global File Registry option consists of a database containing a collation of unique identifiers such as a filehash for copyright protected files and the software issues take-down information in relation to these files. When a user searches for these files, the search results do not display the files which have a take-down status. The user is redirected to a site where the particular music work can be accessed legally. Charleton J. stated that privacy is not infringed through use of this option since it simply reads numbers identifying the illegality of the transmission and the record companies can never identify who
95 96

[2010] IEHC 377, note 53, at 20. [2010] IEHC 377, note 53, at 33. 97 [2010] IEHC 377, note 53, at 37.

44

is infringing their copyright through use of this option alone. 98 The CopySense option involves identification of copyrighted content through use of digital fingerprint technology. It is implemented in universities and colleges as part of a graduated response system to prevent users of the college network from illegally file sharing. Charleton J was satisfied that this type of system did not invade privacy since it did not monitor content. He was also of the opinion that this type of option was clearly effective and believed that the implementation of such a solution by UPC could prove successful. 99 5.6.4 Fundamental Right of Privacy It has long been accepted that a right to privacy exists in this jurisdiction and it has been invoked numerous times over the years. In the digital sphere it can be difficult to define its scope but Charleton J. remarked that Privacy in the modern panoptic society must be flexible enough to address new technologies and developments and their privacy implications while at the same time certain enough as to offer guidance and clarity as a matter of law. 100 He was of the view that the right to be left alone encapsulated here can never extend to any communication designed to further a criminal operation however. Moreover, he was of the view that in relation to the Internet, there are no privacy or data protection implications to detecting unauthorised downloads of copyright material using peer-to-peer technology. 101 5.6.5 Authority of the Court Charleton J then considered whether he was entitled to grant such injunctions as were requested of him in this case. He noted that he was bound to apply the law within the four corners of the Copyright and Related Rights Act 2000.102 Furthermore he stated:

98 99

[2010] IEHC 377, note 53, at 38. [2010] IEHC 377, note 53, at 49. 100 [2010] IEHC 377, note 53, at 66. 101 [2010] IEHC 377, note 53, at 68. 102 [2010] IEHC 377, note 53, at 86.

45

The courts are not entitled, on the other hand, to take an area which has been properly legislated for as to the extent and balance of rights by the Oireachtas and to take a different view. For the Court to pursue the course of granting an injunction on the basis not of law but of economic abuse or moral turpitude would lead the Court beyond the threshold of the judicial arm of government and into legislation. 103 He therefore went on to consider the exact scope of the Copyright and Related Rights Act 2000 and any relevant European legislation. In this instance the injunctions were sought pursuant to sections 37 and 40(4) of the Act. Section 37 concerns the exclusive right of the owner to make copies of the work available to the public and is worded as follows: 37.(1) Subject to the exceptions specified in Chapter 6 and to any provisions relating to licensing in this Part, the owner of the copyright in a work has the exclusive right to undertake or authorise others to undertake all or any of the following acts, namely: (a) to copy the work; (b) to make available to the public the work; (c) to make an adaptation of the work or to undertake either of the acts referred to in paragraph (a) or (b) in relation to an adaptation, and those acts shall be known and in this Act referred to as acts restricted by copyright. (2) The copyright in a work is infringed by a person who without the licence of the copyright owner undertakes, or authorises another to undertake, any of the acts restricted by copyright.

103

[2010] IEHC 377, note 53, at 86.

46

(3) References to the undertaking of an act restricted by the copyright in a work shall relate to the work as a whole or to any substantial part of the work and to whether the act is undertaken directly or indirectly. It is acknowledged that in peer-to-peer file sharing, the parties making copies of protected works available to the public include the downloader and uploader. UPC however are not making the works available since they do not store, host, or cache the files but are merely a conduit. The crucial issue, he notes, is whether the Act allows the Court to interfere with the transit through the UPC network of copyright music to those intent stealing it and offering it for theft on their home computers.104 Section 40(1)-40(3) declares: 40.(1) References in this Part to the making available to the public of a work shall be construed as including all or any of the following, namely: (a) making available to the public of copies of the work, by wire or wireless means, in such a way that members of the public may access the work from a place and at a time chosen by them (including the making available of copies of works through the Internet); (b) performing, showing or playing a copy of the work in public; (c) broadcasting a copy of the work; (d) including a copy of the work in a cable programme service; (e) issuing copies of the work to the public; (f) renting copies of the work; (g) lending copies of the work without the payment of remuneration to the owner of the copyright in the work, and references to

104

[2010] IEHC 377, note 53, at 92.

47

lawfully making available to the public shall mean the undertaking of any of the acts referred to in paragraphs (a) to (g) by or with the licence of the copyright owner. (2) References in this Part to the making available to the public of copies of a work shall include the making available to the public of the original of the work. (3) Subject to subsection (4), the provision of facilities for enabling the making available to the public of copies of a work shall not of itself constitute an act of making available to the public of copies of the work. (4) Without prejudice to subsection (3), where a person who provides facilities referred to in that subsection is notified by the owner of the copyright in the work concerned that those facilities are being used to infringe the copyright in that work and that person fails to remove that infringing material as soon as practicable thereafter that person shall also be liable for the infringement. Providing the facilities which are used in the activity of making available copies of the protected works, does not in itself breach copyright. Liability can only be established if the person or company providing the facilities has been notified and subsequently fails to remove the infringing material. The meaning of removal is given some consideration in the judgement. Charleton J. discusses how the legislation must be interpreted to give effect to the wishes of the legislature, but that he may not interpret the wording in a way which would effectively result in rewriting the text.105 To block access to pirated material is not removing the material in the ordinary sense of the word. To use the suggested solutions of CopySense or Global File Registry would neither constitute removal from the network. He came to the conclusion that the plain wording of the section required that action should be takennot by digital blocking or diverting strategems, but by removal. That is simply not possible in the context of a transient
105

[2010] IEHC 377, note 53, at 96.

48

communication.106 He turned his focus to European law to determine whether this could shed some light on the situation. 5.6.6 European Obligations A national measure should be construed in accordance with its legislative purpose, in accordance with its obligations under European law. Charleton J examined the defences provided to ISPs in the E-Commerce directive, as discussed in Chapter 2 above. These defences arise when an ISP establishes that they are providing the mere conduit, or are caching or hosting. Although he accepts that UPC is a mere conduit, he opines that article 15 of the E-Commerce Directive does not preclude a court from requiring an ISP to terminate or prevent an infringement. 107 This language, he notes, is in marked contrast to the removal of infringing material referred to in the 2000 Act.108 The Copyright Directive does not provide any further assistance either. It is pointed out in paragraph 104 of the judgment that although the explanatory note attaching to the 2004 SI 109 on copyright states that it has made a number of amendments to ensure full compliance with the relevant directives, this is in fact not the case. Recital 59 states that: (59) In the digital environment, in particular, the services of intermediaries may increasingly be used by third parties for infringing activities. In many cases such intermediaries are best placed to bring such infringing activities to an end. Therefore, without prejudice to any other sanctions and remedies available, rightholders should have the possibility of applying for an injunction against an intermediary who carried a third partys infringement of a protected work or other subject-matter in a network. This possibility should be available even where the acts carried out by the intermediary are exempted under Article 5. The
106 107

[2010] IEHC 377, note 53, at 100. Recital 45 of the E-Commerce Directive 108 [2010] IEHC 377, note 53, at 109. 109 SI 16/2004 European Communities (Copyright and Related Rights) Regulations 2004.

49

conditions and modalities relating to such injunctions should be left to the national law of the Member States. Furthermore, article 8 which deals with sanctions and remedies declares the following: 1. Member States shall provide appropriate sanctions and remedies in respect of infringements of the rights and obligations set out in this Directive and shall take all the measures necessary to ensure that those sanctions and remedies are applied. The sanctions thus provided for shall be effective, proportionate and dissuasive. 2. Each Member State shall take the measures necessary to ensure that rightholders whose interests are affected by an infringing activity carried out on its territory can bring an action for damages and/or apply for an injunction and, where appropriate, for the seizure of infringing material as well as of devices, products or components referred to in Article 6(2). 3. Member States shall ensure that rightholders are in a position to apply for an injunction against intermediaries whose services are used by a third party to infringe a copyright or related right. Charleton J puts particular emphasis on the fact that the Copyright Directive places an obligation on the Member State to ensure that a rightsholder is in a position to apply for an injunction against an ISP, however the particular wording of the 2000 Act does not provide for this. Nor does an interpretation of the 2000 Act in light of the Framework Directive as amended or the E-Commerce Directive provide for such a construction. This led the judge to the conclusion that the 2000 Act has made no proper provision for the blocking, diverting or interrupting of internet communications intent on breaching copyright. In failing to provide legislative provisions for blocking, diverting, and interrupting copyright theft, Ireland is not yet fully in compliance with its obligations under European law. 110 Injunctive
110

[2010] IEHC 377, note 53, at 138.

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relief was refused to the plaintiffs even though Charleton J. was of the opinion that such relief was indeed merited on the facts. This legislative gap has recently been the subject of much debate which is detailed in the following chapter.

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Chapter 6 6.1

National Measures against piracy on the Internet

Introduction

National legislation has been introduced in a number of countries worldwide including the UK, France, Korea, Taiwan and New Zealand. National regimes are also currently envisaged in Finland, Italy and Denmark. Draft legislation was passed in Finland in October 2010 providing for notification and warning but not extending to disconnection. 111 It is unclear how this will work without provision for any ultimate sanction. At the time of writing this has not yet come into force. Spain also has adopted its Sustainable Economy Act which contains provisions aimed at speeding up the process of blocking and shutting down websites which are used to infringe copyright.112 Since the focus of this paper is within the EU, the national measures which have been adopted in the UK and France are analysed in detail. 6.2 UK Digital Economy Act 2010

In 2009 a White Paper entitled Digital Britain was produced by the Government with the ambition to secure the UKs position as one of the worlds leading digital knowledge economies. 113 It acknowledged that embracing the digital revolution to fully appreciate and thus maximise exploitation of this reality was a necessary step, potentially leading to huge commercial and industrial opportunities. The recommendations contained in the report and the lengthy consultation process which ensued, culminated in the drafting of the Digital Economy Bill. Its most contentious feature was the imposition of an obligation on ISPs to suspend the internet access of serious infringers of peer-to-peer illegal file sharing. This caused outrage amongst internet-based communities and activists

111

Torrent Freak, File-Sharers to Receive Warning Letters, But No 3 Strikes http://torrentfreak.com/file-sharers-to-receive-warning-letters-but-no-3-strikes-101102/ (visited 17 July 2011). 112 Francisco Javier Cabrera Blzquez, The Sinde Act http://kluwercopyrightblog.com/2011/03/04/the-sinde-act/ (visited 17 July 2011). 113 Department for Culture, Media and Sport and Department of Business, Innovation and Skills, Digital Britain: Final Report (Department for Culture, Media and Sport and Department of Business, Innovation and Skills ,2010) available at http://www.officialdocuments.gov.uk/document/cm76/7650/7650.pdf (visited 25 July 2011).

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such as the Open Rights Group.114 The bill was heard during the so called wash-up period, which essentially follows the announcement of an impending general election, and as such was not properly debated. This has since been a cause for concern. Benjamin Farrand noted that other suspicions arose in relation to the motives of the Business Secretary, Lord Mandelson, in announcing that such measures to control piracy would be introduced.115 Apparently this occurred just days after he had dined with Dave Geffen, the founder of Asylum Records, whilst holidaying in Corfu. Opponents of the Bill viewed this as evidencing the sway of industry lobbyists over the legislative process. After receiving very little debate, the Bill was given the Royal Assent on April 12, 2010, and entered into force on June 12, 2010. The Governments explanatory note on the Act gives a good illustration of how the provisions might work in practice: 116

Copyright owners identify cases of infringement and send details including IP addresses to ISPs;

The ISPs verify that the evidence received meets the required standard, and link the infringement to subscriber accounts;

The ISPs send letters to subscribers identified as apparently infringing copyright. They keep track of how often each subscriber is identified;

If asked to do so by a relevant copyright owner, ISPs supply a copyright infringement list showing, for each relevant subscriber, which of the copyright owners reports relate to that subscriber. The list does not reveal any subscribers identity;

114

Jim Killock, Digital Economy Bill: Dangerous and Draconian Just Got Dictatorial Open Rights Group http://www.openrightsgroup.org/blog/2009/digital-economy-bill (visited 2 March 2011). 115 Benjamin Farrand, The Digital Economy Act 2010 - a cause for celebration, or a cause for concern? E.I.P.R. 2010, 32(10), 536-541. 116 Digital Economy Act 2010, Explanatory Notes, available at http://www.legislation.gov.uk/ukpga/2010/24/notes/division/5/2 (visited 10 March 2011).

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Copyright owners use the list as the basis for a Norwich Pharmacal court order to obtain the names and addresses of some or all of those on the list. At no point are individuals names or addresses passed from the ISP to a copyright owner without a court order;

Copyright owners send final warning letters direct to infringers asking them to stop online copyright infringement and giving them a clear warning of likely court action if the warning is ignored; and

Copyright owners take court action against those who ignore the final warning.

A good overview of the elements of the Bill, relating to copyright infringement, which survived the legislative process, is given in the aforementioned article by Farrand. 117 Sections 3 18 are those sections with which we are concerned. These are difficult to read since they refer to and amend the Communications Act 2003. Sections 3 7 provide the framework for an Initial Obligations Code which must be drafted or approved by Ofcom. These sections provide guidance as to what should be included in this code. A draft code118 was published by Ofcom on the 28th of May 2010 for consultation. Section 3 of the DEA places the ISPs under an obligation to inform subscribers of infringements reported by rights owners. The notice given to the subscriber must contain a description of the infringing content, evidence displaying the IP address at the time of the infringement, and the name of the content owner making the report. It also extends to impose liability on an internet subscriber who allows another to utilise the service and commit an infraction on the service. This farreaching clause can cause problems for businesses whose employees use their service on a daily basis, parents whose children use the home accounts and many other private and public organisations.
117 118

Farrand, note 115. Ofcom, Online Infringement of Copyright and the Digital Economy Act 2010: Draft Initial Obligations Code available at http://stakeholders.ofcom.org.uk/binaries/consultations/copyrightinfringement/summary/ condoc.pdf (visited 13 March 2011).

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There are ramifications for unsecured wireless access also. A subscriber presently has the choice of whether to leave their network unsecured, but this will essentially be allowing access, as caught by the Act. This effectively amounts to constructive prohibition of unsecured Wi-Fi by the back door, for consumers, corporations and the public sector.119 Farrand notes the irony in the situation; in light of the stated aim of the Digital Britain Report - to ensure maximum accessibility section 3(6)(h) may in fact have the effect of reducing accessibility as libraries, airports and even corporations such as Starbucks end their open-access Wi-Fi services in order to avoid liability.120 Section 4 obliges the ISP to provide infringement lists to content owners, upon their request. Confusion may arise here without further clarification as noted by Farrand. 121 Content holders are notifying ISPs of infringing IP addresses per section 3 and then under section 4 ISPs are providing content holders with a list of these IP addresses. Without further explanation this seems to be somewhat purposeless. However, since IP addresses are often specified on an ad hoc basis, it is possible for the same user to have infringed multiple times on different IP addresses. Section 9 provides for the imposition of an obligation on the ISP to take technical measures against certain subscribers as a preventative step. These measures include suspension of a relevant subscribers 122 internet connection, restrictions on download speed or quantities, restrictions on the types of material that they can access, or other types of limits on access to the internet. The following section however states that these technical measures cannot be put in place by the ISPs until at least 12 months following an initial obligations code entering into force. These technical measures must be regulated by an Ofcom drafted code to be approved by Parliament, namely the Technical Obligations Code. These measures could include such actions as download caps, bandwidth throttling, protocol
119

Lilian Edwards, Mandy and Me: Some Thoughts on the Digital Economy Bill (2009) 6:3 SCRIPTed 534. 120 Farrand, note 115, at 540. 121 Ibid. 122 A relevant subscriber is one whom the amount of copyright infringement reports against them, has exceeded a threshold as set out in the initial obligations code. In other words they will appear in a copyright infringement list.

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blocking and port blocking. Something of important note is the very general clause that a measure can be anything that limits the service provided to the subscriber in another way.123 This effectively gives the government the power to limit the internet access of anybody in any way if it can be seen to potentially reduce or prevent online copyright infringement. In this regard, the redeeming feature of the Technical Obligations Code is that its provisions must be objectively justifiable, must not unduly discriminate against any person or class of persons and must be proportionate and transparent. Perhaps one of the most controversial aspects of the Bill was the initial clause 17 which has attracted much criticism from stakeholders. This clause provided the Secretary of State with a power to amend the Copyright, Designs and Patents Act 1988 for the purpose of preventing or reducing online copyright infringement, if it is appropriate to do so because of technological developments. This caused consternation because it would allow for primary copyright legislation to be amended without examination by Parliament. Large technology companies such as Google and Facebook wrote an open letter lobbying against this clause. 124 It was then revised to ensure that any amendment by the Secretary of State pursuant to this clause would be proportionate. It must also now receive the approval of Parliament. At the beginning of February, Ofcom were ordered to review the powers given by the DEA, relating to blocking websites which could be used for copyright infringement.125 Before Government will begin to enforce the website blocking measures, they want to be sure that these can in fact work in practice. This led to the creation of a working group on the matter to facilitate discourse on how to make the proposed system more agreeable. 126 ISPs are inevitably concerned about
123 124

Digital Economy Act 2010, s9. Charles Arthur, Tech chiefs attack digital economy bill The Guardian 10 March 2010, available at http://www.guardian.co.uk/technology/2010/mar/10/digital-economy-bill (visited 25 July 2011). 125 Kate Holten, Ofcom to review Digital Economy Act Reuters 1 February 2011, available at http://uk.reuters.com/article/2011/02/01/uk-britain-digital-idUKTRE71041O20110201 (visited 2 March 2011). 126 Mark Sweeney, Government hunts for plan B on internet piracy proposals The Guardian 25 February 2011, available at http://www.guardian.co.uk/ technology/2011/feb/25/digital-economyact-website-blocking (visited 2 March 2011).

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potential litigation which could arise as a result of blocking a website. One possible solution to this that has been suggested is the indemnification of ISPs by the rights holders and the placing of the onus on the rights holders to prove undoubtedly that the website was in fact being used for illegal purposes before blocking it.127 Two of the UKs largest ISPs, BT and Talk Talk, applied for judicial review of the Act, to assess whether it was incompatible with certain provisions of EU law. Five grounds were advanced for challenge. These included the contention that the DEA is incompatible with certain provisions of the E-Commerce Directive and the Privacy and Electronic Communications Directive; that they are disproportionate in their impact on ISPs, businesses and consumers; and that the suggested costs to be footed by ISPs are inappropriate.128 The first ground of challenge was an alleged breach of the Technical Services Directive. Article 8(1) TSD requires Member States to inform the Commission of any draft technical regulation and a statement as to why it is necessary, for the purposes of legal certainty and transparency. It has been established that a draft technical regulation which has not been duly notified is unenforceable at national level. 129 It was held that the initial obligations enacted by the DEA are not yet legally enforceable against any individual, including ISPs; and, therefore, they do not have the requisite legal effect. They could not be said to be technical regulations and as such this ground was dismissed. 130 The second ground of challenge was a purported breach of the E-Commerce Directive, particularly articles 12, 15 and 3(2) which relate to the prohibition of all forms of restrictions by Member States which would hamper the free provision of Information Society Services, the limited liability regime of mere conduit ISPs, and a no general monitoring obligation. The judge noted that a careful balancing of competing interests was completed in drafting articles 12 and 15 and if one were to

127 128

Ibid. [2011] EWHC 1021, note 72. 129 [2011] EWHC 1021, note 72, at 63. 130 [2011] EWHC 1021, note 72, at 93.

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depart from the plain meaning, an unfair tipping of the balance in favour of one industry to the detriment of the other could occur.131 The judge noted that it is conceivable that an IPR holder may draw the attention of an ISP to an infringement or likelihood of repeat infringement and invite them to terminate or prevent such an infringement. In these circumstances, the careful balance struck by the legislator allows Member States to authorise the courts or competent administrative authority to order the ISP to terminate or prevent the infringement, so long as the ISP is not made liable (by way of fine or compensation) in respect of the infringement itself. The potential exposure of ISPs to financial penalties etc. was raised as an argument to bolster this ground of challenge but this was dismissed because such liabilities would arise as a result of failure to comply with the core obligations of ISPs under the DEA as opposed to liability for the underlying infringement. there was no breach. 132 It was contended by the claimants that the database of information linking infringements with subscribers, which must be maintained by ISPs pursuant to the DEA, is contrary to article 15s no general monitoring obligation. The judge stated that nothing in the DEA requires ISPs to inspect or examine the information transmitted for any purpose and the role of the ISP under the DEA is a passive one.133 It is the copyright owners themselves that must show that an infringement has occurred and the ISP has itself no general obligation to inspect or examine the transmitted information for potential or actual copyright infringements. The third ground of challenge was a breach of the Data Protection Directive 134 (DPD) and the Privacy and Electronic Communications Directive 135 (PECD). It
131 132

The judge reiterated that he could not

give such an extended meaning to article 12 and on a natural reading of this clause,

[2011] EWHC 1021, note 72, at 100 108. [2011] EWHC 1021, note 72, at 107 - 108. 133 [2011] EWHC 1021, note 72, at 115.
134

Directive 95/46/EC of the European Parliament and of the Council of 24 October 1995 on the protection of individuals with regard to the processing of personal data and on the free movement of such data.
135

Directive 2002/58/EC of the European Parliament and of the Council concerning the processing of personal data and the protection of privacy in the electronic communications sector.

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was submitted that the processing of personal data within the meaning on the DPD is likely to be required by ISPs under the initial obligations of the DEA. It was conceded that copyright owners would be processing personal data but it was held that this processing was permissible in the context of copyright infringement.136 There is uncertainty as to whether an IP address constitutes personal data but it seems that the judge here is of the opinion that they do. This issue has been the subject of much debate across Europe with different jurisdictions reaching contradicting conclusions. In Ireland it would appear that they do not constitute personal data. The only ground which was successfully challenged was in relation to costs. Section 15 of the DEA empowered the Secretary of State to implement a Costs Order addressing cost sharing between ISPSs, rights holders and Ofcom in relation to costs incurred in implementing and complying with their obligations under the DEA. It refers to three kinds of costs: qualifying costs which are administrative costs incurred by Ofcom or the appeals body; relevant costs which are administrative costs borne by the ISPs in carrying out its obligations; and case fees set by the appeals body in respect of each subscriber appeal which it receives. Under the Costs Order, each of these costs were to be split between the ISP and the copyright owner with the ISP incurring 25%. This was held to conflict with the Authorisation Directive137. While it was held that relevant costs and case fees could be borne by the ISP, to require them to pay qualifying costs is unlawful. 138 BT and TalkTalk were originally refused leave to appeal this decision however it has very recently come to light that an appeal hearing was in fact granted and is scheduled for 7th October 2012.139 This is yet another hurdle that the DEA must overcome before we will see its implementation.

136 137

[2011] EWHC 1021, note 72, at 161. Directive 2002/20/EC of the European Parliament and of the Council of 7 March 2002 on the authorisation of electronic communications networks and services. 138 [2011] EWHC 1021, note 72, at 200. 139 Malcolm Hutty, BT, TalkTalk to get an appeal hearing Linx 25 July 2011, available at https://publicaffairs.linx.net/news/?p=4757 (visited 26 July 2011).

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6.3

France HADOPI

In January 2010 the French law amending the existing French Intellectual Property Code (IPC)140, known as Hadopi 2, was finally adopted in modified form after a review by the French Constitutional Council. This sets out the French approach to the graduated response regime. It has as its aims141 the encouragement of the development of the legal offer on the Internet and the protection of works to which a copyright or related right is attached against any infringement. This intentionally strikes a balance between the educational and the repressive. Hadopi stands for Haute Autorit pour la Diffusion des Oeuvres et la Protection des droits sur Internet which translates as the High Authority for the Diffusion of Creative Works and Copyright Protection on the Internet. It is an independent administrative body, hereinafter referred to as the Authority, with a board of nine members three appointed by the government, two by the legislative bodies, three by judicial bodies and one by the Superior Council of Artistic and Literary Property. The Authority, upon referral by sworn agents 142, acts to inform an ISP that an infringement has occurred. The ISP then sends an email notification to the subscriber that corresponds with the infringing IP address, warning them of this first occurrence. If infringement reoccurs within six months, a second warning will be sent by registered mail. Since the sworn agents are processing IP addresses, the issue of processing personal data has arisen. The Constitutional Council

considered that the IP addresses make it indirectly possible to identify a person and to process data of a personal nature. As such, processing must be subject to the requirements of the national data protection laws and the data may be transmitted only to the Authority or to the judicial authorities. The processing of such data must be strictly proportional to the purpose it is sought to achieve. 143

140

Act No. 92-597 of 1 July 1992 on the Code of Intellectual Property (Code de la Proprit Intellectuelle) hereinafter referred to as IPC. 141 IPC Article L331-13. 142 IPC Article L331-24. 143 Decision no 2009-580 of June 10th 2009 of the French Constitutional Council, English version available at http://www.conseil-constitutionnel.fr/conseilconstitutionnel/root/bank_mm/anglais/2009_580dc.pdf (visited 22 July 2011).

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If the subscriber continues to infringe, a formal judicial complaint will be made. 144 The judge has the power to impose sanctions including disconnection of the subscriber account. While suspension will be reserved for the most serious infringers, it is the cornerstone of the system, and without this sanction, it would serve a mere letterbox role and would be nothing more than a scarecrow whose warning messages would soon be ignored.145 The sanction of suspension is set down in Chapter V of the IPC entitled Criminal Provisions. Article L.335-7 states that any infringement under Article L. 335-2146, L.335-3147 or L. 335-4148 of the IPC carries a punishment of suspension of access to a public communication line for a maximum of one year, plus the prohibition to take over the same period another contract on a similar service from any operator. Originally, under what is known as Hadopi 1, the administrative body had the power to order disconnection of the infringing subscribers account. This was held to be unconstitutional by the French Constitutional Court 149 as it was reasoned that only a judge would be empowered to do so. It was held that the powers to impose penalties created by the challenged provisions vest the Committee for the protection of copyright, which is not a court of law, with the power to restrict or deny access to the internet by access holders and those persons whom the latter allow to access the internet. The powers vested in this administrative authority are not limited to a specific category of persons but extend to the entire population. The powers of this Committee may thus lead to restricting the right of any person to exercise his right to express himself and communicate freely, in particular from his own home. In these conditions, in view of the freedom guaranteed by article 11 of the Declaration of 1789, Parliament was not at liberty, irrespective of the guarantees accompanying the imposition of penalties, to vest an administrative
144 145

IPC Article L331-25. Jean-Sbastien Mariez, HADOPI 3 small suspension points Juriscom.net available at http://www.juriscom.net/documents/ pla20110315.pdf (visited 17 July 2011). 146 Any edition of writings, musical composition, drawing, painting or any other production, printed or engraved in whole or in part, in defiance of the laws and regulations relating to property of the authors shall constitue infringement. 147 Any reproduction, performance or dissemination of an intellectual creation or of software, by any means whatsoever shall constitute infringement. 148 Any fixation, reproduction, communication or making available to the public, or any broadcasting of a performance, phonogram, videogram or a program shall constitute infringement. 149 Decision no. 2009-580, note 143.

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authority with such powers for the purpose of protecting holders of copyright and related rights.150 Article L.335-7-1 introduces a misdemeanour of characterised negligence which is punishable by the imposition of suspension for a maximum of one month. This obligates a subscriber to implement a means of security on their own network. If a subscribers network is hacked then they will be liable. In 2006 the DADVSI Act was passed in France to implement the Copyright Directive. 151 This act contained provisions imposing an obligation on subscribers to secure their connection so as to ensure that it is not being used by another for copyright infringement, but it did not provide for any sanctions to deal with a failure to comply with this condition. Hadopi however introduced liability for this. According to the article L. 336-3 a subscriber has the obligation to ensure that this access is not the subject to a use for the purpose of reproducing, representing, making available or communicating to the public works or other materials protected by a copyright or a neighbouring right without the authorisation of the right holders.152 The decision of the French Constitutional Court also considered the proportionality of the penalty of suspension, particularly in relation to the presumption of innocence and the fundamental rights of the defendant. The regime imposed a strict liability on the Internet subscriber unless they could adduce evidence to prove that the infringement had been committed by a third party.153 This reversal of the burden of proof was held to be unconstitutional. It was stated that under article 9 of the Declaration of 1789, every man is presumed innocent until proved guilty. Parliament cannot therefore introduce a principle of presumption of guilt in criminal matters. However, as an exceptional measure, such a presumption may be introduced, particularly in the case of minor offences, once such presumptions are not irrebuttable, the rights of the defence are respected and the available facts tend to confirm the likelihood of the commission of the
150 151

Decision no. 2009-580, note 136, at 16. Law No. 2006-961 of 1 August 2006 on Copyright and Related Rights in the Information Society. 152 IPC Article L. 336-3. 153 Nicola Lucchi, Regulation and Control of Communication: The French Online Copyright Infringement Law (HADOPI) (2011) 19 JICL (page number unavailable at time of writing due to availability of electronic copy only).

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incriminated act.154 With regard to freedom of expression and communication, the Court recognises that freedom of communication is a fundamental right, and that this extends to include freedom to access online communication services given the importance of this in the participation of democracy and the expression of ideas and opinions.155 Any restriction placed on the exercise of this right must be adapted and proportionate to the purpose it is sought to achieve. 156 The Hadopi regime is not merely a three strikes policy, but adopts a broader approach to entice people to lawful downloading. It does this in two ways: educational measures and the introduction of the Carte Musique Jeune. As part of an education code school pupils receive information about illegal downloading of protected works and the potential sanctions that may be imposed on copyright infringers. They also receive information in relation to valid legal offers available on the Internet. The Carte Musique is a card subsidised by the government offered to people between the ages of 12 and 25 which will allow them to purchase 50 worth of music online for a payment of just 25. One of the problems with Hadopi is that it monitors only peer-to-peer technologies. Studies have shown that the use of peer-to-peer in accessing illegal copies of protected works however has declined and that the consumers of these illegal materials are now using alternative channels such as cyber-lockers.157 Perhaps this has been too expensive and protracted a system to implement with waning efficacy, if these trends are anything to go by. Nonetheless it aims to have reached a target of sending 10,000 first warning notices per day by. Its effectiveness thus far remains to be seen as there is yet to be an independent study with reliable figures.

154 155

Decision no. 2009-580, note 143, at 17. Decision no. 2009-580, note 143, at 12. 156 Decision no. 2009-580, note 143, at 15. 157 PWC, The speed of life: Discovering behaviors and attitudes related to pirating content (PWC, 2011) available at http://download.pwc.com/ie/pubs/2011_discovering_behaviors_attitudes_related_to_pirating_conte nt.pdf (visited 22 July 2011).

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Chapter 7 7.1

Ireland

Consultation on Amendment to Copyright and Related Rights Act 2000

In the week leading up to the 2011 election, rumours were rife that a Statutory Instrument was being rushed through the legislative process without political debate and was due to be signed by the Minister for Enterprise, Trade and Innovation Mary Hanafin TD. This caused much consternation among stakeholders, particularly since the very closely related Scarlet v SABAM is currently before the Court of Justice of the European Union. Minister Hanafin was quick to respond to this speculation, confirming that legislation would not be hurried through parliament. It was also confirmed that the advice of the Attorney General had been sought, along with consultation with the Department of Communications, Energy and Natural Resources. Minister Hanafin concluded that it would be normal practice to consult all the relevant stakeholders in advance of legislation such as this being enacted.158 The Digital Economy Act was swept through in a similar fashion in the United Kingdom to much dissatisfaction, and as such is already undergoing a review. Richard Bruton T.D., the Minister for what has recently been renamed Jobs, Enterprise and Innovation, announced on the 9th May, a review of the Copyright and Related Rights Act 2000.159 The terms of reference of the review are summarised into the following short points: to identify any areas which are seen to create barriers to innovation; identify solutions and recommendations for the implementation of such solutions; assess whether the introduction of a fair use doctrine may be appropriate in Ireland; and make recommendations for changes to the EU law if necessary. The deadline for submissions to this review was 14 th July 2011 and at the time of writing these were being compiled and reviewed by the

158

Department of Jobs, Enterprise and Innovation, Minister Hanafin clarifies speculation on possible changes to copyright law http://www.deti.ie/press/2011/20110224.htm (visited 22 July 2011). 159 Department of Jobs, Enterprise and Innovation, Consultation on the Review of the Copyright and Related Rights Act 2000 http://www.djei.ie/science/ipr/copyright_review_2011.htm (visited 22 July 2011).

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Copyright Review Committee. A consultation paper will be prepared as the next stage of the review process and is due for publication in the autumn. Notwithstanding this review, on the 9th June, a question was raised in the Dil in relation to the supposed gap that has existed in Irish law as identified in the October judgment of Charleton J and it was sought to have this resolved as a matter of urgency. 160 Proposed wording for a Statutory Instrument was published on the 20th June by the Department, with an astonishingly brief consultation period of just ten days.161 This was extended at the request of stakeholders to the 30th July 2011. The proposed SI will purportedly bring Ireland into line with its European obligations under the Copyright Directive and the E-Commerce Directive. The Department stated that it had believed that the types of injunctions which ought to be available were already available in this jurisdiction under section 40(4) of the 2000 Act. They also stated that Charleton J had not considered removal of access rather than mere removal of the infringing material in his judgment. Furthermore it is emphasised that the proposal is not intended to introduce a Hadopi-style graduated response system. The SI proposes to insert the following wording after section 40(5) and 205(9) of the 2000 Act respectively: (5A) (a) without prejudice to subsections (3) and (4), the owner of the copyright in the work concerned may apply to the High Court for an injunction against a person who provides facilities referred to in subsection (3) where those facilities are being used by one or more third parties to infringe the copyright in that work. (b) In considering an application for an injunction under this subsection, the court shall have due regard to the rights of any third party likely to be affected and the court shall make such directions (including, where appropriate, a direction requiring a

160

Willie ODea Dil Debates Vol. 735 No. 1, 14987/11 9 June 2011 http://debates.oireachtas.ie/dail/2011/06/09/00014.asp (visited 22 July 2011). 161 Department of Jobs, Enterprise and Innovation Consultation on Amendment to Copyright and Related Rights Act, 2000 http://www.djei.ie/science/ipr/copyrightconsultation.htm (visited 22 July 2011).

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third party to be put on notice of the application) as the court may deem necessary or appropriate in all the circumstances. (9A) (a) without prejudice to subsections (7) and (8), the rightsowner may apply to the High Court for an injunction against a person who provides facilities referred to in subsection (7) where those facilities are used by one or more third parties to infringe any of the rights referred to in Parts III and IV. (b) In considering an application for an injunction under this subsection, the court shall have due regard to the rights of any third party likely to be affected and the court shall make such directions (including, where appropriate, a direction requiring a third party to be put on notice of the application) as the court may deem necessary or appropriate in all the circumstances. 7.2 A Closer Look

The Department have stated that Charleton J in his judgment failed to consider the concept of removal of infringing material from access as opposed to mere removal by UPC. 162 It is not clear what exactly is meant by this. In paragraphs 99 and 100 of the judgment there is a discussion and analysis of the system of deep packet inspection and packet dropping in order to prevent a piece of data transiting the network. The distinction is made between removal from access and whether the entire communication is removed. The expert witness explained that when you stop a communication the files still exist on the machines that it existed on before the communication.163 Charleton J was of the opinion that [c]utting off access to the computers holding pirated copyright songs is not to remove infringing material; it is to stop the transit of that material. 164 He further notes that the solutions of CopySense and Global File Registry, which he had explored, also cannot be said to remove the infringing material from the Internet. This is not, in the ordinary use of language, the removal of infringing material from the network
162 163

Ibid. [2010] IEHC 377, note 53, at 99. 164 [2010] IEHC 377, note 53, at 100.

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he remarked.165 Furthermore the plain wording of the section in its use of the present tense and its reference to removing infringing material, requires that action should be taken in respect of a then existing situation, not by digital blocking or diverting stratagems, but by removal. That is simply not possible in the context of a transient communication. 166 It would thus appear that Charleton J did in fact give consideration to the concept of removal from access, and that in doing so he came to the conclusion that it was not possible. It is unclear what the Department is attempting to achieve with this statement, but in any event it is unlikely to have any impact on the outcome of the consultation. Another noteworthy point is that the Department has emphasised that the proposed amendment is not about the introduction of a statutory regulatory regime such as the French Hadopi system or the regime set out in the Digital Economy Act in the United Kingdom. 167 This emphasis would appear to be just a fallacy however. Once this amendment has been implemented, there is nothing to prevent rightsholders from seeking injunctions requiring ISPs to implement a graduated response system. It will be for the judge to decide, based on certain legal principles whether such an injunction is mandated in the circumstances. The injunctions regime provided for in the broad wording of the proposal could potentially encompass not only blocking but mass filtering obligations and the eventual introduction of a graduated response system is not inconceivable in these conditions. Academic commentators have noted that the injunctions provided for under this broad wording could potentially be aimed at a number of different groups. 168 The wording of the proposal covers anybody providing facilities which may be used by an infringing third party. This is broad enough not only to include the imposition of an injunction on access providers like Eircom and UPC, but also cyber-lockers such as Rapid Share and Megaupload, and those who upload on a peer-to-peer
165 166

[2010] IEHC 377, note 53, at 100. [2010] IEHC 377, note 53, at 100. 167 Department of Jobs, Enterprise and Innovation, note 154. 168 Rnn Kennedy, Consultation on amendments to Copyright Act 2000 Commons.ie available at http://coimin.ie/?cat=6 (visited 15 July 2011). This blog post documents a twitter discussion which occurred between TJ McIntyre and Rnn Kennedy in which the proposed amendments were discussed.

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network. The concept of a leech in the context of peer-to-peer is described earlier. If a leech is using a client which allows download only, then these users will not, it seems, fall under the remit of this injunctions scheme. Neither will a download only user on a cyber-locker. This is because a download only user does not provide facilities which may be used for infringement. As Rnn Kennedy notes, if the pursuit of individual downloaders through Norwich Pharmacal orders proved futile, the option to seek injunctions against individual infringers one by one will hardly be much more of an effective alternative. 169 It is not inconceivable to think that there may be some who will argue that Ireland is in fact already complying with its European obligations and that an amendment is entirely unnecessary. The Department admits that even they were under the impression that injunctions of the kind mandated under EU law were already available in Irish law under Section 40 (4) of the 2000 Act and by reason of the inherent power of the courts to grant injunctions, which are equitable and discretionary remedies granted according to settled principles, developed by the courts.170 The representative body for the telecommunications sector in Ireland have drafted a response to the consultation to that effect which may be viewed by the public by request to the Department. They argue that while a Member State must ensure that a rightsholder is in a position to apply for an injunction against an intermediary, it is not specified what type of injunction must be available. Furthermore, Recital 59 of the Copyright Directive asserts that the conditions and modalities relating to such injunctions should be left to the national law of Member States. The very fact that Ireland expressly limited this injunctive relief to a notice and takedown procedure, exercising the discretion set out in Recital 59, it may be argued, satisfies the obligation as set out in article 8(3) of the ECommerce Directive. This argument is unlikely to hold much weight and it is likely that the Statutory Instrument will become law soon regardless of the countless objections that it receives.

169 170

Ibid. Department of Jobs, Enterprise and Innovation, note 154.

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Charleton and OKeeffe further explain the legislative gap. 171 Although article 12 of the E-Commerce Directive provides for the defence of mere conduit, it also states that this should not prevent a court, in accordance with national law, from requiring a service provider to terminate or prevent an infringement or from establishing procedures governing the removal or disabling of access to information. Charleton and OKeeffe note that in the European legislation the words used are: remove, disable, terminate, prevent. 172 The wording in the 2000 Act refers to the removal of infringing material. When different words are used in legislation, it is noted, they have intentionally different meanings. 173 The disabling of access is not the removal of material. A graduated response system ultimately resulting in the disconnection of the users Internet connection pursuant to a court order is not removal of material but is would operate to prevent the occurrence of an infringement. They note that in this sense the Irish legislation does not go as far as it should under the European directives.174 They observe that Britain complies with its obligations with the Digital Economy Act 2010 but even before this became law, the transposing laws in the UK used all four of the words listed above which appear in the European directives. 175 Only one of these appears in the Irish legislation. The wording of the amendment as it stands provides little or no guidance to a judge in a court of law. Charleton and OKeeffe have expressed their opinion on judicial discretion and judicial activism in the context of such injunctive relief. They note that merely because an injunction is available pursuant to national law it does not mean that it is an automatic remedy, and must still be subject to the discretionary jurisdiction of the courts. While it may appear simple, they remark, it poses a dilemma to every judge that is requested to grant interlocutory relief because no finding of fact has yet been made and there is a grave concern of the consequences if the decision turns out to have been a wrong one. They state that a judge must not only be sure that the making of an order injuncting an activity is

171 172

Peter Charleton and Conor OKeeffe, Copyright Piracy and the Internet (2011) Ibid. 173 Ibid. 174 Ibid. 175 Ibid.

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right but that the individuals whom the injunction is aimed at must know that which is permitted and that which is forbidden, and it must be possible for them to comply with it. A number of guiding principles which a court may take into account when establishing whether an injunction is an appropriate remedy, may be found in Kirwan.176 Even more considerations are involved in injunctions relating to digital piracy. One of the principles in EU law, Charleton and OKeeffe add, is prevue par la loi177 In other words they are entitled to know what the law is; what it demands; how judges are empowered; and what he is likely to be facing in the event of a breach. 178 This is difficult when the injunction dictates the implementation of a technical measure which may be of a new untested kind given the rapid pace at which technology advances and becomes obsolete.179 Judges must also consider third party rights which may be affected by any such injunction along with the burden of costs and resources and where this should lie. All of these considerations can prove to be quite a headache for the judiciary and the broad wording of the proposed amendment is not likely to alleviate this in any way. The proposed wording expressly places an obligation on the judge to have due regard to the rights of any third party likely to be affected. These rights include the right to respect for privacy of personal communications, the right to protection of personal data and the right of freedom of information. All of these rights are protected under the Charter of Fundamental Rights. These rights are not absolute however and may be restricted in certain circumstances. Advocate General Cruz Villaln stated that they may be abridged but only in accordance with the law. He considered that the legal basis for such a restriction must be adopted nationally and must be accessible, clear and predictable. 180 Once the final ruling has been handed down, it is hoped that it will provide some detailed guidance to national judges seeking to impose a technical measure on an intermediary. Charleton J was of the opinion that there were no privacy or data protection implications to detecting unlawful downloads of protected works using peer-to-peer technology,

176 177

Brendan Kirwan, Injunctions, Law and Practice (Thomson Roundhall, 2008). Charleton and OKeeffe, note 164. 178 Ibid. 179 Ibid. 180 Court of Justice of the European Union, note 69.

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nor to blocking, nor to a graduated response. 181 Digital rights advocates would beg to differ. If the Advocate Generals opinion is adopted by the CJEU, then it will not be likely that a graduated response scheme could be imposed on foot of an injunction at the behest of the righstholder pursuant to the proposed amendment. This type of scheme would require statutory status similar to the DEA or Hadopi. From the Advocate Generals opinion it would appear that such national legislation must be accessible, clear and predictable. As part of the EU Commissions Telecoms Package182 which aimed to reform the regulatory framework for electronic communications and services within the EU, a directive was introduced in 2009 amending the Framework Directive. 183 This was transposed in Ireland on the 1 st of July 2011 and requires judicial oversight for any such scheme. The relevant clause reads as follows: Measures taken by Member States regarding end users access to, or use of, services and applications through electronic communications networks shall respect the fundamental rights and freedoms of natural persons, as guaranteed by the European Convention for the Protection of Human Rights and Fundamental Freedoms and general principles of Community law. Any of these measures regarding end-users access to, or use of, services and applications through electronic communications networks liable to restrict those fundamental rights or freedoms may only be imposed if they are appropriate, proportionate and necessary within a democratic society, and their implementation shall be subject to adequate procedural safeguards in conformity with the European Convention for the Protection
181 182

[2010] IEHC 377, note 53, at 68. European Commission Memo/09/491, Agreement on EU Telecoms Reform paves way for stronger consumer rights, an open internet, a single European telecoms market and high-speed internet connections for all citizens Brussels, 5 November 2009. 183 Directive 2009/140/EC of the European Parliament and of the Council of 25 November 2009 amending Directives 2002/21/EC on a common regulatory framework for electronic communications networks and services, 2002/19/EC on access to, and interconnection of, electronic communications networks and associated facilities, and 2002/20/EC on the authorisation of electronic communications networks and service.

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of Human Rights

and

Fundamental

Freedoms and

with general

principles of Community law, including effective judicial protection and due process. Accordingly, these measures may only be taken with due respect for the principle of the presumption of innocence and the right to privacy. A prior, fair and impartial procedure shall be guaranteed, including the right to be heard of the person or persons concerned, subject to the need for appropriate conditions and procedural arrangements in duly substantiated cases of urgency in conformity with the European Convention for the Protection of Human Rights and Fundamental Freedoms. The right to effective and timely judicial review shall be guaranteed.184 Charleton and OKeeffe note that because of the advocates of Internet freedom, issues which once were simple have now become entangled with issues of privacy, issues of data protection, issues of personal freedom, entitlements to communicate and ultimately...a requirementthat no one is to be cut-off from Internet service unless there is judicial determination. 185 The requirement of judicial determination to which they refer is that which is described above. The tone of the article suggests that this is a bad thing but it is difficult to understand how consideration of such issues should ever be bemoaned. They observe that until now an Internet contract was a private contract between two parties and if breached could be sued upon. Under the amendments to the Framework Directive termination of an Internet contract is now subject to prior judicial supervision and a special and protected status is given to these contracts.186

184 185

Ibid, article 1(b). Charleton and OKeeffe, note 164, at 8. 186 Ibid.

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Chapter 8

Conclusion

It is clear that if the proposed Statutory Instrument is adopted in the coming months, the conundrum of digital piracy will remain far from solved. Whether rightsholders will bombard the courts with a deluge of injunction applications or whether they will be deterred from doing so by the impending Scarlet decision remains to be seen. A lot of questions remain unanswered. One thing is for certain however, the judge assessing these injunction applications will not have an easy task. It will be a struggle for the courts to assess what exactly is proportionate when it comes to ever-evolving technical measures. Pursuant to the proposed amendment to Irish law, an injunction ordering the implementation of general filtering obligations would fall foul of the Scarlet principles. Any injunction seeking to impose a three-strikes regime would similarly conflict with the guiding principles of European jurisprudence, unless it were the subject of accessible, clear and precise national legislation. Furthermore, the ultimate disconnection of such a system must be subject to prior judicial determination. Such a system is not likely to be introduced in this jurisdiction in the near future. Although the Norwich Pharmacal route of directly pursuing the infringer would be the method of enforcement preferred by ISPs, this has proven futile, as noted by Charleton J, because of huge costs and labour intensity. Perhaps a less costly and less burdensome option which would allow a rightsholder to obtain the information that they require to pursue the individual, through a lower court, would be preferable. This however, would need to be the subject of well thought out primary legislation, with the input of the Oireachtas, which addresses data protection issues and all of the other concerns of the parties involved. There is no one universal remedy for the problem of piracy in the Internet age. It may be alleviated only upon cooperation of all concerned parties. Increasing enforcement alone is not the appropriate way to tackle this. A balance between the pedagogical and the oppressive needs to be reached, along with an increase in the availability of affordable legitimate digital products. This may only be achieved through a broad all-encompassing review of the copyright regime. The implementation of secondary legislation addressing enforcement alone, in spite of 73

the wider review which is now occurring is imprudent and will benefit none. In the words of Professor Ian Hargreaves in his definitive report on the issue [a]ction is needed on all fronts.187

187

Ian Hargreaves, Digital Opportunity: A Review of Intellectual Property and Growth (2011) at 8.45.

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