COPENHAGEN – A panel discussing the copyright challenges posed by social media at a recent conference in Iceland concluded that while new and stricter regulations as proposed in France may not be a bad idea, the best solution is to provide consumers with quality services for which they are willing to pay. Meanwhile, there are new developments at the European level.

The French regulation in question is the recently passed “three strikes and you’re out” rule. Three-strikes measures also have been proposed in the United Kingdom, Finland is discussing a softer version of it and in Italy, President Silvio Berlusconi has expressed an interest in it, according to sources.

In the French version this means that the state agency called the Higher Authority for the Distribution of Works and the Protection of Copyright on the Internet (HADOPI in French) can report offenders to a judge upon the third accusation of illegal file sharing, Tahir Basheer of Sheridans Solicitors in London told Intellectual Property Watch (IPW, Access to Knowledge, 2 October 2009).

Under the law, the agency will first send a warning email, possibly followed by a formal letter. But if someone is accused for a third time, they could have their internet account disconnected for up to a year.

Finnish, UK Proposals

In Finland, a copyright committee has issued a report (“Legislative means for eliminating illicit file-sharing”), which includes a draft law. Stakeholders have until 30 October to comment on it, Marko Rajaniemi of the Culture Division/Copyright Matters at the Finnish Ministry of Education told Intellectual Property Watch.

“[T]he committee brought up a new notification procedure that would not include the ‘last strike’ of suspending the repeat infringers’ access to the internet. According to this softer approach the right holders would simply send a notification concerning the detected infringement to the suspected infringer,” Rajaniemi said.

He added that Finnish law already includes criminal sanctions for illegal file-sharing, including disconnecting the user’s internet connection, but only following a court order.

Basheer said the three-strikes measures had also been proposed by the UK government in the Digital Britain Report, which was published by the Department for Business Innovation & Skills on 16 June. In it, the UK government set out its action plan for the digital economy.

The proposal has been supported by the UK music industry umbrella group UK Music and the Featured Artists Coalition.

Telecoms Discussions

Some fear that national initiatives could end up pushing for stricter regulation at the EU level, which is currently being discussed. The issue of whether a government is allowed to block anyone’s internet access if it suspects any form of illegal file-sharing is a crucial point of disagreement in the controversial EU telecommunications reform package (IPW, European Policy, 5 June 2009).

Last week, the European Council proposed a revision of the EU telecommunications directive that Erik Josefsson, adviser on internet policies with the Greens/EFA group, said was exactly the same as the text that the European Parliament rejected on 6 May this year.

The sticking point is whether national agencies like HADOPI should be allowed under European law to take action on suspected illegal file-sharing before it has been tried in a court, Josefsson told Intellectual Property Watch.

Josefsson said the Council had presented the new text as a compromise, but it would probably open up for national agencies such as HADOPI in France. The constitution of the European Parliament has changed since May due to elections, but Josefsson predicted this Council proposal would probably also be rejected as many of the new members opposed it.

The Parliament’s Conciliation Delegation to the EU Conciliation Committee, with its 27 members of Parliament (MEPs), meets this week. Three MEPs also met with the Council last week and will report back to the 27 MEPs on what the Council said, according to Josefsson.

The telecommunications package is formally still in the second – and not third – reading, Josefsson said.

At the national level, Sweden has previously indicated that rules that would limit people’s access to the internet would not be implemented in Sweden. It is therefore interesting that Sweden, currently holding the EU presidency, is pushing to complete the telecoms directive “as soon as possible,” regarding it as a “responsibility to deliver” instead of looking at its content, Josefsson said.

Iceland Panel

Basheer was part of a panel on “Copyright and the Social Media Websites challenges” at the conference, “You are in control. The digital revolution shakes the creative industries – what’s to be gained, lost and learned?” It took place in Reykjavik, Iceland, on 23-24 September.

The panel discussed new platforms for content providers, it being newspapers, CDs or DVDs.

“User-generated content on social media sites changes the traditional media business structures creating a control shift from traditional content owners to consumers,” said Basheer. “This has an impact on the value chain behind the copyright and other intellectual property created.”

The French regulation as a new measure in this area was actively debated. “Even those found guilty of ‘negligence’ for allowing others (such as their children) to pirate online material risk a month-long internet suspension and a €1,500 fine,” he said.

But while the panel recognised the need for legislation to pursue “persistent high-level offenders,” this should not be the main focus of the industry.

“The main focus should be to drive traffic and people to legitimate, legal sites by providing a quality service that provided end consumers with different options at different price points and additional reasons to visit the official sites,” Basheer said.

Instead of ever stronger copyright protection, the panel discussed how consumers should be given options so that they could choose, or that content providers should look at alternative sources of income such as some online newspapers offering betting services in their sports sections.

A Social Media Alternative

Another panellist was Haukur Davíð Magnússon, CEO of the Icelandic music company gogoyoko, launched on 9 July this year.

Gogoyoko has found a way of selling music that keeps both the artist and the consumer happy. Via its online shop the consumer can buy music directly from the artist at reduced cost.

“Gogoyoko.com is a web site that combines an online social network with a digital music store [where] fans can buy music directly from artists who get 100 percent of the sales profit,” Magnússon told Intellectual Property Watch.

“Gogoyoko is a combination of Twitter and iTunes,” Magnússon said.

At gogoyoko, the artists set the price on the songs or tracks themselves. “Since [the] artists get 100 percent of the profit, they seem to set the track price lower than what we have seen on other sites,” he said.

Another advantage is that “[l]isteners and artists can interact directly with their friends, which also enables artists to get live feedback from fans.” The idea was developed by Magnússon and his friends based on what they themselves regarded as needed.

The focus is on listeners and artists, but as a question arose about the label companies, Magnússon said the model does not exclude them from signing up.

“Many artists have signed a deal with labels and of course labels are welcome on gogoyoko.com, but then it is up to the labels to set the track’s price and split the revenue with their associates,” he said, adding that gogoyoko is also working with collection societies.

Magnússon said gogoyoko has been doing “really, really well” since it was established three months ago. At the moment it is only operating in Iceland, mainly with Icelandic artists but also international ones. On 1 October it planned to expand to all of Scandinavia (Denmark, Norway and Sweden). At the moment, about 60-70 percent of all active artists in Scandinavia are part of gogoyoko.

Sweden Pushes Harmonisation

Separately, Sweden says it is moving forward with the patent harmonisation discussions, aiming for the EU Competitiveness Council taking place in Stockholm on 3-4 December.

“There is a significant political momentum, we recognise progress and have put on the table proposals aiming at a political agreement on the Community Patent Regulation as well as Council conclusions on main features of the unified patent litigation system (European and Community Patents Court),” Carl Josefsson of the Swedish Ministry of Justice told Intellectual Property Watch.

“The latter conclusions are foreseen to be without prejudice to and conditional on the forthcoming opinion of the European Court of Justice on the compatibility of the envisaged European and Community Patents Court with the EC treaty,” he added.

When Sweden took over the EU presidency on 1 July, it said that creating one European patent system and moving forward the talks on a European Patent Court were top priorities under the six-months it would hold the presidency (IPW, European Policy, 1 July 2009).

On 6-7 October the EU Working Party on Intellectual Property (Patents) was to meet in Brussels. On the agenda was: “Draft Council conclusions on an enhanced patent system in Europe, proposal for a Council Regulation on the Community patent and Draft proposals for amendments to the European Patent Convention,” according to the agenda.