Digital media law highlights of 2009 - Internet for Lawyers Newsletter

Copyright, in various guises, has featured heavily in the media this year, being in the spotlight at both legislative and judicial level, with high profile decisions in UK and EU courts, and numerous papers, reports, consultations and reviews at UK and EU level.

In addition, developments in consumer expectations, business models, and technological innovations have fuelled the international debate over whether copyright is fit for purpose in the digital age.

In its report © The Way Ahead: A Strategy f
or Copyright in the Digital Age, the UK Intellectual Property Office remarked that “we are at a crossroads in our relationship with our new digital world.” The challenge is that “there is a mismatch between the expectations of users and what copyright currently allows.” Getting the balance right in order to incentivise creativity whilst meeting consumer demands and keeping up with technological developments is key.

This article picks out highlights from 2009 with a view to piecing together a snapshot of where we are now with copyright and digital media law.

SABIP

The UK Government established The Strategic Advisory Board for Intellectual Property (SABIP) in June 2008 as a follow-up to The Gowers Review. In March 2009, SABIP published a Strategic Priorities For Copyright paper, in which it identified six key areas for its work programme:

the role of the copyright system in fostering creativity and innovation;
issues concerning the ownership and coverage of copyright;
rights management techniques and technologies;
the relationship between copyright and contract law;
possible simplification of the copyright framework;
the implications of changing attitudes and practices among consumers.

Underlying all these issues is the single, central question: “Does the paradigm shift towards a digital economy necessitate an equally fundamental adaptation of the copyright framework or its component parts? Alternatively, can innovation within the existing framework bring about effective adaptation in a more incremental way?” In other words, is copyright fit for purpose or does it need to be adapted?

Whilst recognising that this is a period of transition, the fundamentals of the existing copyright framework are capable of adjusting to the digital age. This leaves the question of how far it needs to be adapted in order to reflect technological developments.

Telecoms Package

The EU’s “Telecoms Package” and the UK’s Digital Economy Bill are examples of how existing laws are being adapted to meet the challenges of the digital age.

The text of the Directive implementing the telecoms reform package was approved by the European Parliament and Council on 24 November 2009. This followed long negotiations over whether illegal downloaders should be cut off from the internet after multiple attempts to file-share, or whether internet access is an important human right which should not be restricted in this way.

The package deals with wider issues (eg spectrum liberalisation and boosting of 3G mobile services) but on this specific point provides that citizens’ internet access can be restricted if necessary, but only after a “fair and impartial procedure”, including the user’s right to be heard (“the right to an effective and timely judicial review shall be guaranteed”).

It remains to be seen whether the legislative measures to deter file-sharers which have already been introduced by countries such as France, or those proposed by countries such as the UK, will prove to be “incompatible” with this new EU Directive. To an extent, it depends on the interpretation of what constitutes a “judicial review” (ie does this solely mean review by a judge in court proceedings or could it be a tribunal or similar body with delegated authority).

Digital Economy Bill

The Digital Economy Bill, currently working its way through Parliament, is the culmination of the “Digital Britain” process (see also below) to protect and support the UK’s creative industries in the digital age. As with the Telecoms Package, the UK’s Digital Economy Bill includes key provisions relating to wider issues (such as copyright protection and licensing), but it is its procedure for dealing with online file-sharing which is grabbing the headlines and sparking controversy.

Under this procedure, when a rights-holder has identified an unlawful file-sharer and issued a “copyright infringement report” to the ISP to which that file-sharer subscribes, the ISP is obliged to notify that file-sharer, record the number of notifications that file-sharer has received, and provide “copyright infringement lists” to the rights-holder.

These obligations on ISPs are to be underpinned by a code of practice approved by Ofcom, which will contain enforcement procedures that Ofcom may employ in the event of a failure to comply with the code (as well as specifying the rights of alleged file-sharers to challenge actions by ISPs and rights-holders). In addition, the Digital Economy Bill gives the Secretary of State the power to require Ofcom to take technical measures against certain file-sharers if necessary (including limitation of internet connection speed and suspension of the connection).

HADOPI in France

Meanwhile, France is creating a high authority for the copyright protection and the dissemination of works on the internet (the “HADOPI” law). This circumvents the need for judicial prosecution in taking action against internet piracy. The national debate has been stormy and it is not over yet: the Socialist opposition has gone to the Constitutional Court considering the planned measure to be “easily circumvented, counter-productive, unworkable and costly”.

Pirate Bay in Sweden

The judgment handed down in Sweden in April 2009, which sentenced the owners of the bit torrent P2P site Pirate Bay to a year in prison and a hefty fine, unleashed a torrent of opinions from the blogosphere on the copyright/consumer debate.

Pirate Bay had consistently goaded the media and positioned itself as leading a rebellion against copyright laws. The vast majority of content for which people searched via the Pirate Bay site was copyright infringing material and this was central to its business model. It was found to have “authorised” copyright infringement by its users.

Litigation, as they say, is a “turkey shoot” and given the dearth of case law in this area it is hard to be certain that the outcome would have been the same if the Pirate Bay case had been heard in the UK: there is certainly a good chance that it would.

Digital Britain

The Digital Britain Report, published by the UK Government on 16 June 2009 (245 pages!) was big in scope and ambition: “Digital Britain is the government’s vision of an economy and society where core working activities are based around knowledge, skills and information. It represents a strategic plan to accelerate growth in the digital industries and cement the UK’s position as a world leader for innovation, investment and quality.”

One of the themes of this wide-ranging report is the implied question as to whether copyright is an enabler or a barrier in the new digital media world.

The report identified the following four commercial challenges which need to be addressed to preserve a healthy content market in the digital age:

downward pressure on digital revenues caused by lowering of digital distribution and copying costs;
downward spiral of revenues from advertiser-funded businesses resulting from huge increase in advertising inventory;
the need for wholesale access to important content to satisfy bundled content and services offered across a range of distribution platforms and digital service;
unlicensed and illegal copying and distribution.

The Digital Britain Report is a mix of its own “original” content plus lots of snippets and links pointing to other developments which are already in process. But does it all add up to systemic change? Potentially yes, but there’s obviously a big question mark about how far circumstances will allow “Digital Britain” to deliver its vision.

Also, it is probably fair to say that the most significant areas of change focus on the network and the funding of public sector content and services rather than in the area of copyright and commercial content. Here follows my take on the key points for copyright.

UK copyright law – some significant tweaks. Digital Britain gives pointers that some of the proposals resulting from the Gowers Review are likely to see the light of day. It talks about updating existing copyright exceptions to allow certain public institutions to make preservation copies of films and sound recordings and also to enable educational institutions to communicate copies of material to “distance learning” students.

Collecting societies. The report mentions a potential change which would greatly increase the range of works which can be licensed by collecting societies. Following the example in the Nordic countries, collecting societies may be able to offer licences over works which have not been mandated to them by the relevant rights holders.

Orphan works. Digital Britain also refers to plans to introduce legislation to enable collecting societies to license “orphan works” – copyright works whose authors can’t be found. This isn’t a minor issue. The British Library estimates that 40 per cent of its archive includes orphan works.

The importance of public sector content. The public sector is no longer just about broadcast media. The report states that Government commissioning may represent as much as 30 per cent of total investment in professional UK online content. So plans about how public institutions license their content are hugely significant to the digital content sector.

Support for innovation in the creative industries. This is a bit of a hotch potch. But there’s certainly some prospective good news for the computer games industry on potential tax breaks; some discussion about rights-based funding mechanisms such as levies and cable re-transmission fees and a few thoughts about film, cinema and literature.

Online infringement. As discussed above, ISPs could find their role expanded from service provider (or “postman”) to enforcement authority (or “policeman”) if the UK proceeds with its proposals as outlined in the Digital Economy Bill. As well as sparking debate over human rights, this is controversial because it challenges the principle of “net neutrality” which many claim is a fundamental feature of the internet.

Conclusion

Digital Britain’s focus is, of course, the UK only, so any of the other big issues that are currently floating around, such as broad provisions for “fair use”, fall into the remit of the EU and WIPO. On these issues, Digital Britain doesn’t so much duck the question as defer to the work being led by the IPO following publication of SABIP’s “Strategic Priorities for Copyright” (see above) which has an international and strategic focus.

When you add it all up, it is a landscape of significant and ongoing change. But for the world of commercial content, the future ultimately lies not in Digital Britain but in new business models.

The digital world presents opportunities for rights-holders to provide innovative new services to meet the evolving demands of their consumers. This can be done within the existing legal framework for copyright with some carefully considered adaptations.

Laurence Kaye is an expert lawyer in the fields of digital law, intellectual property and media law. He combines cutting-edge legal work on digital media projects with strategic and policy-related work in the field of copyright and online law. Laurence Kaye Solicitors’ mantra is “legal solutions for the digital age”, with a proven track record for combining innovation with practical legal advice. He blogs at laurencekaye.typepad.com.