Contradictory Court Rulings, Continuing Tension On Internet Liability In EU

In its 2010 digital music report [pdf], the International Federation for the Phonographic Industry (IFPI) said that despite the availability of 400 legitimate online music offerings worldwide and significantly higher 2009 revenues, the music sector remains hard-hit by peer-to-peer and emerging forms of copyright infringement.

The organisation has argued for several years that internet service providers (ISPs) should take more responsibility for policing their networks through a “graduated response” (or ‘three-strikes and you’re out’) mechanism that includes notices and warning letters to suspected infringers followed by internet access suspension if the first two stages are ineffective. “The push for graduated response continues” because it is picking up steam in several countries, an IFPI spokesman said.

But on 4 February, the Federal Court of Australia muddied the waters further by ruling, in Roadshow Films Pty Ltd v. iiNET Limited, that ISP iiNET did not “authorise” users to infringe plaintiffs’ films simply by giving them access to the BitTorrent system that allowed them to download movies. According to the court, the case was the first trial of its kind in the world to reach judgment and hearing.

The judgment is here.

Thirty-four major movie studios in the United States and Australia sued the ISP, claiming some of its subscribers were unlawfully downloading their films. The studios wanted iiNET to put in place a graduated response system of warnings and possible disconnection, and they also suggested the ISP block certain websites, the court said.

Some iiNET subscribers infringed copyright but the ISP did not authorise those breaches, the court said, because the violations were a direct result of the use of the BitTorrent system which iiNET does not control. It also said the ISP did not have the power to prevent the piracy from happening, and that iiNET did not approve, sanction or countenance copyright breaches.

The judgment vindicates the fact that iiNET has “never supported or encouraged breaches of the law,” the ISP said. The private-sector Australian Federation Against Copyright Theft, which played a key role in pursuing the case, said the decision was based on a “technical finding centred on the court’s interpretation of how infringements occur and the ISP’s ability to control them.”

Meanwhile, the Italian Supreme Court held recently that Italian ISPs can be ordered to censor their networks and to block BitTorrent search sites even if they are not hosted in-country or by Italian citizens, said attorney Innocenzo Genna, a telecommunications consultant. According to the court, sites offering torrent files linking to copyrighted materials are considered to be engaging in criminal activity, he said.

Relying on the high court decision, the Court of Bergamo ordered all Italian ISPs to deny subscribers access to the website of The Pirate Bay, Genna said. That ruling, annulled by the appeals court, was reinstated by the high court, he said. The Supreme Court decision, and several pieces of legislation in Italy seeking to regulate service and access providers to various extents, makes the ISP liability issue even more controversial than it has been, he said.

Genna added a couple of caveats. Decisions of Italy’s Supreme Court are not binding although they do indicate support for a given interpretation. Moreover, the BitTorrent ruling is based on Italy’s peculiar implementation of the European Union E-Commerce Directive, which grants immunity from liability for copyright infringement to internet access providers who are “mere conduits” for content.

Italy’s law apparently extends to these providers some of the responsibilities imposed on hosting providers, such as the obligation to remove content, Genna said. That is why Italian precedent should not be invoked in other countries, and why sooner or later the matter will end up in the European Court of Justice to determine if Italy has correctly interpreted the directive, he said.

Human Rights Issues

Legislation working its way through the United Kingdom Parliament allows rights owners to issue “copyright infringement reports” to ISPs whose subscribers are suspected of breaching copyright, and requires service providers to notify account holders when they receive a report and to keep a list of those who have been the subject of reports. The Digital Economy Bill also gives the Secretary of State the power, subject to further legislation, to order ISPs to use technical measures, including disconnection of internet access, to deal with unauthorised downloading.

Parliament’s Joint Committee on Human Rights, which vetted the file-sharing aspects of the wide-ranging bill, issued a report on 5 February. In it, the panel said that while the proposals for warning notices do not potentially seriously implicate users’ privacy or free speech rights, those dealing with technical measures and the right to a fair hearing, whose details are still scanty, may do so. It asked the government to clarify the scope of the measures.

The report is here [pdf].

EU Eyes Tougher IP Enforcement

Updated European telecommunications rules contain a provision protecting citizens’ rights to access the internet (IPW, European Policy, 24 November 2009). The text is the result of extensive, and often rancorous, negotiations among the European Commission, Parliament and Council of Ministers. Some activists, however, believe it leaves the door open for restrictions on internet access without prior judicial hearings.

The European Parliament Legal Affairs Committee is now preparing a response to European Commission non-legislative proposals for tightening IPR enforcement. The draft document chides the Commission for failing to deal with internet infringement effectively and urges it to propose law changes if content owners and ISPs cannot resolve the problem this year.

French civil rights group La Quadrature du Net called the report a “perfect example of the worst kind of IPR dogmatism.” Asking the Commission to revamp the EU legal framework on the basis of national experiences risks the introduction of graduated response or “three-strikes” measures and criminalisation of file-sharing tools, the organisation said.

The draft report is here [pdf].

Trends

The Australian decision is based on the “safe harbour” principle that has been essential to the development of a free, democratic and open internet over the past 15 years, said European Digital Rights Advocacy Coordinator Joe McNamee. The case is “far from isolated, but is based on the long-standing, broadly logical and balanced approach that is coming under increasing threat” now, he said.

Far from the idea of making ISPs liable for infringement going away, the trend is increasingly in the other direction, as shown in France, the UK, Italy and Poland, McNamee said. The move is toward imposing on the industry, “often under the guise of ‘self-regulation,’” policing measures that would never survive democratic scrutiny, he said. These will have little impact on the problems targeted but “vast potential for collateral damage” for internet freedoms, openness and democracy and the “very innovation that is the only real answer to the problem of IPR infringement by end-users,” he said.