The UK Government outlined plans earlier today to support economic growth by modernising the UK’s intellectual property laws. The Government accepted a number of recommendations made by Professor Ian Hargreaves in his report, Digital Opportunity: A review of intellectual property and growth in its response to Professor Hargreaves’ Review of Intellectual Property and Growth. The Government’s response can be found online at www.ipo.gov.uk/ipresponse.
The UK Government also simultaneously published a series of other reports including: Next steps for implementation of the Digital Economy Act, “Site blocking” to reduce online copyright infringement, Draft-Sharing-of-Costs statutory-instrument, Impact Assessment for the Sharing of Costs Statutory Instrument, Digital Economy Act Appeals Process: Options for reducing costs, International Strategy, and IP Crime Strategy.
The Government response makes it clear that intellectual property is of fundamental importance to economic growth, and that maximising its contribution relies on both enabling use of intellectual property and protecting it. The Government endorsed the Review’s view that it must “not put our hugely important creative industries – or any other IP-led business sector – at risk by what we do. Managing that risk includes not only responding effectively to the challenges posed by technology, such as issues around enforcement of IP rights, but also seizing the opportunities for growth that technology opens up.”
Several important plans are to:
- Bring forward proposals for an orphan works scheme that allows for both commercial and cultural uses of orphan works, subject to satisfactory safeguards for the interests of both owners of ‘orphan rights’ and rights holders who could suffer from unfair competition from an orphan works scheme.
- Bring forward proposals for extended collective licensing to benefit sectors that choose to adopt it, and look to maximise the benefits it could bring to smaller creative firms and individual creators in particular.
- Create “a limited private copying exception”; to widen the exception for noncommercial research, which should also cover both text- and data-mining to the extent permissible under EU law; to widen the exception for library archiving; and to introduce an exception for parody. These will be implemented “in ways that do not prejudice the provision of appropriate incentives for creation of works through the copyright system”. No private copying levies are contemplated.
Following the successful defence of the Digital Economy Act provisions in judicial review, the Government is moving forward with the DEA initial obligations including plans to move ahead with the DEA notification system.
The Government decided not to bring forward regulations on site blocking under the DEA, at this time. Contrary to what has been widely reported, Ofcom did not rule out site blocking in the future and the Government stated it was “keen to explore the issues raised by Ofcom’s report and will be doing more work on what measures can be pursued to tackle online copyright infringement.”
Ofcom’s report concluded that blocking of infringing sites could potentially play a role in tackling online copyright infringement, but that the approach set out in the DEA was unlikely to be effective because the slow speed that would be expected from a full court process would provide site operators with the opportunity to change the location of the site long before any injunction could come into force. The Government noted that Section 17 and 18 of the DEA would not be faster than what is already available under section 97A of the UK CDPA. This process, which is required under Article 8(3) of the EU Copyright Directive, was just successfully used to obtain an order against BT to block access to the Newzbin file sharing web site in Twentieth Century Fox Film Corp & Ors v British Telecommunications Plc  EWHC 1981 (Ch) (28 July 2011) (summarized here).
The Government canvassed additional measures that could be used to block access to content besides those contemplated by sections 17 and 18 of the DEA. It concluded that additional effective measures include those available under section 97A of the UK CDPA, notice and takedown, domain seizures, squeezing site revenues, and search engine delisting.
According to the Ofcom report: Site blocking” to reduce online copyright infringement, the following additional processes are available:
Blocking injunctions: section 97A of the Copyright Designs and Patents Act 1988 (CDPA) gives the Court power to grant an injunction against a service provider “where that service provider has actual knowledge of another person using their service to infringe copyright.” Such an injunction exists in addition to the power of the Court to grant an injunction in the context of an action for breach of copyright by a particular person.
Notice and take-down: where content is hosted in the UK copyright owners may ask the hosting service provider to take down the content at source. Where this happens the service provider can review the material and take its own view as to whether the content is infringing. YouTube offers a particularly interesting model of this. Where copyright owners identify content which they believe to be infringing, YouTube offers them tools to allow for the content to be taken down or actually monetised. The copyright owner can take a share of the advertising revenue on the page or use the page to promote the copyright owner’s own videos on YouTube. If the service provider chooses to remove the content then the party who has posted the content will typically be informed and given the opportunity to challenge the decision, with access to the content being re-instated if the service provider is persuaded that it is not infringing.
Under US law, there is a formal legal process for such a scheme, operated under the Digital Millennium Copyright Act (DMCA). Service providers are provided with a safe-harbour, which grants them immunity from prosecution (under secondary infringement rules) where they operate within a specific framework in considering requests from copyright owners to block access to sites or to remove content where they are hosting it….
A notice and take-down scheme could provide a valuable complement to a technical blocking measure, essentially offering the service provider the opportunity to remove the content in question prior to a formal block being put in place. The opportunity for the site operator to remove infringing content ahead of a block being implemented could be helpful where the blocking technique carried a risk of over blocking. In this context, it is worth noting that the Italian communications regulator (AGCOM) is consulting on proposals for regulated notice and take-down scheme under which the regulator would have powers to require service providers to remove infringing content. That the removal of content was at the request of the regulator would, we assume, protect the service provider from liability.
De-listing from search index: some search engines, most notably Google, will de-list particular sites following the submission of evidence from a copyright owner that the site is infringing copyright. Application to de-list is submitted to Google via post or fax. Google will attempt to contact the site hosting the alleged infringing content and provide them with an opportunity to engage in the process before Google reaches its decision. De-listing can be an effective measure in so far as it makes it more difficult for users to find unlawful sites and it makes it easier to locate lawful alternatives, as they will appear higher on the search rankings than would otherwise be the case.
De-listing of infringing sites could increase the effectiveness of a blocking scheme. Whilst the operator of a site which has been blocked can move the site to an alternative IP address, URL or domain, if it cannot secure a listing for the new location on search engines then it will prove harder for users to find it and for the operator to effectively re-build its business.
Squeeze revenues: infringing sites can often appear legitimate to users and some are alleged to be successful at generating significant revenues. Some infringing sites charge a subscription fee, carry banner advertising for legitimate brands and often look more attractive to consumers than their lawful alternatives. It can be difficult for a consumer to know whether the site is indeed infringing. Many brand owners are unaware that their adverts are appearing on such sites until it is brought to their attention by copyright owners. Copyright owners have reported some success in persuading those brands to instruct their advertising agencies to withdraw ads from such sites. Similarly, credit card companies are reported by copyright owners as having been put under pressure to withdraw payment platform services from such sites. In addition to helping make the service appear less legitimate, the removal of payment platform services and advertising may make such sites less attractive to operate given the costs of bandwidth and storage required for operation, as well as the inconvenience caused by the disruption and from having to secure alternative payment platform services.
Domain seizures: a recent development in the U.S. has been the seizure of websites which were allegedly illegally streaming live content. In February, the U.S. Immigration and Customs and Enforcement (ICE) department executed a federal Court order in the Southern District of New York, seizing 10 websites. The websites were streaming coverage of National Football League, National Basketball Association and National Hockey League events. ICE has said publicly that further seizures will occur. Visitors to those sites were redirected to a banner advising that the domain name had been seized by the New York office of ICE because of criminal copyright violations. There may be a greater attraction to domain seizures in the US than would be the case in the UK, given that there are more significant domain registries with the US jurisdiction. We believe that such a measure, if implemented in the UK, would only be capable of a limited effect, given that it would only affect domains using “.uk” country code top-level domains. Site operators can respond to a seizure by registering their site in a different country. Whilst this is an inconvenience, it is not a significant barrier to the operation of unlawful sites. The approach could be made more effective through improved international cooperation amongst enforcement agencies, limiting the number of countries to which those subject to seizure orders can switch.
The Ofcom report concluded:
We believe that the measures outlined above could potentially play a role in support of a site blocking scheme, complementing the more technical approaches and, in some cases, helping to compensate for weaknesses inherent in the blocking techniques. A bill has been introduced in the US which would see many of these measures adopted to help the enforcement agencies and copyright owners to tackle infringing web sites based outside of the US. It is too early to predict the outcome for that proposal, but we believe there is value in considering further how such measures could be deployed to enhance the effectiveness of site blocking within the UK.