UK moving ahead with graduated response after Hargreaves Review of IP

Last week, the UK government confirmed its intention to implement the graduated response process set out in the UK Digital Economy Act 2010 (DEA). Several documents released along with the response to Professor Hargreaves’ Review of Intellectual Property and Growth summarized the UK process and compared it with the graduated response processes enacted in France and New Zealand. See, Draft-Sharing-of-Costs statutory-instrument, Impact Assessment for the Sharing of Costs Statutory Instrument, and Digital Economy Act Appeals Process: Options for reducing costs. The documents provide a useful summary of how these different international laws designed to reduce online file sharing work.

The UK process was introduced expressly to address the rise in unlawful peer-to-peer file sharing, “which can reduce the incentives to invest in the development, production and distribution of new content by preventing investors in the creative industries from fully appropriating the returns on their investment.” The DEA’s grauduated response process purpose is to reduce online infringement of copyright “by introducing a system of mass notifications designed to educate consumers about copyright and bring about a change in consumer behaviour”.

Graduated response is viewed by many policy makers as a fair and effective means of addressing the problem of online unauthorized file sharing. Its key characteristics are: (1) rights holders monitor P2P networks for illegal downloading activities; (2) rights holders provide ISPs with convincing proof of infringements being committed by an individual at a given IP address; (3) educational notices are sent through an ISP to the account holder informing him or her of the infringements and of the consequences of continued infringement and informing the user that content can be lawfully acquired online; and (4) if the account holder repeatedly ignores the notices, some sanction may follow. See, Graduated response and copyright: an idea that is right for the times.

Some critics of graduated response contend that it is flawed because it results in unreasonable or arbitrary sanctions against innocent individuals. The Full Court of Australia in the recent iiNet case backed the reasonableness of graduated response to stop illegal file sharing. Last year the Irish High Court in EMI Records & Ors -v- Eircom Ltd, [2010] IEHC 108 held that a graduated response solution to illegal file sharing involving “detection, notification and termination” “is viable and proportionate”. The documents released by Ofcom last week highlight the processes including appeals processes used in these systems to build in procedural fairness for those identified as repeat copyright infringers.


United Kingdom

The online copyright provisions inserted into the UK Communications Act 2003 by the DEA place obligations on ISPs, when informed by copyright owners, to notify subscribers of their unlawful behaviour by generating copyright infringement reports (CIRs”). Each CIR includes a description of the apparent infringement along with supporting evidence, including the subscriber’s IP address and the time at which the evidence was gathered. The ISP matches the IP address to a subscriber and sends them a letter notifying them of the CIR(s). The ISP records the number of CIRs made against subscribers in an anonymised copyright infringement list. The copyright owner can request this list in order to see which of the reports it has made are linked to the same subscriber. It can then seek a court order to reveal the details of the subscriber, with a view to taking court action against them.

The subscriber can, however, choose to appeal each notification and each CIR within a notification. The DEA sets out the minimum grounds for appeal to an independent appeals body appointed by Ofcom. (Ofcom has discretion to add further grounds for appeal and must approve the procedures of the appeals body.)

The minimum grounds for appeal are to be set out in a code to be developed by Ofcom and which must have the following elements:

The code must provide that an appeal on any grounds must be determined in favour of the subscriber unless the copyright owner or internet service provider shows that, as respects any copyright infringement report to which the appeal relates or by reference to which anything to which the appeal relates was done (or, if there is more than one such report, as respects each of them) the apparent infringement was an infringement  of copyright, and the report relates to the subscriber’s IP address at the time of that infringement.

The code must provide that, where a ground mentioned…is relied on, the appeal must be determined in favour of the subscriber if the subscriber shows that the act constituting the apparent infringement to which the report relates was not done by the subscriber, and the subscriber took reasonable steps to prevent other persons infringing copyright by means of the internet access service.

The powers of the person determining subscriber appeals must include power to secure so far as practicable that a subscriber is not prejudiced for the purposes of the copyright infringement  provisions by an act or omission in respect of which an appeal is determined in favour of the subscriber; to make an award of compensation to be paid by a copyright owner or internet service provider to a subscriber affected by such an act or omission; and where the appeal is determined in favour of the subscriber, to direct the copyright owner or internet service provider to reimburse the reasonable costs of the subscriber.


As the Ofcom report describes, France has implemented a regulated ‘three strikes’ scheme for tackling online copyright infringement.

The HADOPI law also enables copyright owners to have notices of infringement sent to allegedly infringing customers. There is no specific appeal from the correctness of each notice, but there are broad rights to dispute the information in notices before any sanction can be applied. Ofcom descibes the procedural safeguards in the French process as follows:

It is not possible to appeal subscriber notifications alleging infringement under the French ‘three strikes’ regime, as these are considered ‘reminders’ of the law, without legal effect in themselves. However, Hadopi (the government agency created to administer the Hadopi law) has chosen to accept contact from subscribers and we understand that around 10% of those who received first notifications have contacted them. Often this may often be with a view to securing more information about the allegation, rather than as a precursor to a claim of innocence.

There is a right to an administrative hearing before Hadopi, as part of Hadopi’s consideration of a case before deciding whether to forward it to the judiciary, who may decide to apply sanctions. It is a private hearing before three magistrates from the Hadopi Board. No conditions or payment for accessing the hearing are envisaged…

Based on its findings, Hadopi may choose not to pursue a case further, or to refer the file to the public prosecutor…

Two routes are available to the public prosecutor, where he considers there is sufficient evidence to prosecute:

A new, streamlined procedure before a single magistrate in the criminal courts, introduced as part of the Hadopi laws (where there is considered to be ‘no significant harm’)…

Under this procedure, the magistrate considers the file prepared by Hadopi. He has no powers to investigate further, and decides the case without a hearing…  The magistrate may dismiss the case or issue a criminal order imposing sanctions…

If the subscriber does not challenge the decision, it becomes final. If he wishes to challenge the decision, the public prosecutor may bring the case before the magistrate (sitting alone) for a hearing…

A standard procedure before a single magistrate in the criminal courts under general copyright law (used where there has been ‘significant harm’, e.g. a high number of downloads or history of infringing)….

The magistrate may dismiss the case or [impose] sanctions…

Alternatively, if the prosecutor considers there is not sufficient evidence to prosecute, he may refer the file to the Police for criminal investigation.

The decision of the magistrate in the streamlined procedure (following a challenge) or of the criminal court in the standard procedure may both be appealed to the Court of Appeal.

New Zealand

The New Zealand Copyright (Infringing File Sharing) Amendment Act 2011 was enacted into law on 18 April 2011 and is due to become in force on 1 September 2011. The Act provides “copyright owners with a fast-track civil law alternative to existing remedies under general copyright law in order to enforce their rights against infringing file sharing by internet account holders.”

The New Zealand process was summarized by Ofcom as follows:

The 2011 Act provides for a three notification process, with the possibility of sanctions in the form of a fine or Internet suspension. The latter remedy requires secondary legislation in order to enter into force. All notifications may be challenged and sanctions may be appealed.

When a copyright owner provides an ‘internet protocol address provider’ (IPAP)  with information identifying an IP address at which copyright infringement is alleged to have occurred as a result of file sharing, the IPAP must match the IP address and send an ‘infringement notice’ to the subscriber. The subscriber can challenge the notification by contacting the IPAP, which forwards the challenge to the rights holder for consideration.

The rights holder responds to a challenge via the IPAP. A challenge is deemed to be accepted if it has not been rejected by the rights holder within 28 days from the date of the notice. In this case, the notice is cancelled and treated as if it had not been issued, unless the infringement subject to challenge did not itself trigger a notice, in which case the notice remains valid but the infringement is treated as if it were not included.

If the rights holder rejects the challenge, the subscriber may raise it again in any enforcement proceedings…

The Act provides for a fast-track system of enforcement, to sit alongside existing copyright enforcement provisions. Once a subscriber has been issued with a third notification, the rights holder may seek an order from the Copyright Tribunal for a sum of up to $15,000 (c. £7,000) and/or an order from a District Court for the IPAP to suspend the account holder’s internet account for up to six months (civil remedy). The provisions on suspension do not come into effect immediately but only following secondary legislation (‘Order in Council’) by the Governor General, specifying the date after which applications may be made to the District Court…

In order to take a complaint to the Tribunal, the loss must be quantified as under $15,000. Claims for over $15,000 may be pursued in the District Court under existing law.

Proceedings before the Copyright Tribunal will take place without a hearing, unless the account holder requests a hearing or the Tribunal considers that one should be held. It is presumed that each incidence of filesharing identified in an infringement notice constituted copyright infringement, the information in the notification is correct, and the notice was issued in accordance with the Act. A subscriber may submit evidence or give reasons why any of those presumptions do not apply to any of the identified infringements. It is then up to the rights holder to satisfy the Tribunal that the relevant presumptions are correct.

Appeals of the decisions of the Copyright Tribunal and the District Court are to the High Court.

As can be seen, all three of the legislated graduated response systems provide for extensive procedural protection to ensure that sanctions are only able to be imposed after consecutive notices are sent to alleged file sharers and such notices are not effective to prevent repeat infringements. Further, these protections also provide one or more appeals to independent entities to ensure that sanctions are only imposed on those responsible for online file sharing.

The UK, France, and New Zealand graduated response processes all involve legislative solutions to online file sharing. In other countries, graduated response systems have been implemented voluntarily by ISPs under agreements with copyright holders. An example is the Irish ISP Eircom which voluntarily implemented a graduated response process.

In the US, leading ISPs reached agreements with rights holders in July 2011 to implement a new a common framework for “Copyright Alerts”. The new Copyright Alert System provides a series of early alerts — up to six — in electronic form, notifying the subscriber that his or her account may have been misused for online content theft of film, TV shows or music. It will also put in place a system of “mitigation measures” intended to stop online content theft on those accounts that appear persistently to fail to respond to repeated Copyright Alerts. The system will also give subscribers the opportunity for an independent review to determine whether a consumer’s online activity in question is lawful or if their account was identified in error. Termination of a subscriber’s account is not part of this agreement. Further, under the Copyright Alert System, ISPs will not provide their subscribers’ names to rights’ holders under this agreement.

Canada’s Bills C-60, C-61 and C-32 would have implemented a less effective “notice and notice” system. Unlike any of the processes set out above, this process did not build in any deterrent for those repeatedly found to engage in online copyright infringement.

For more information about the Copyright Modernization Act or Bill C-11 or copyright reform, see Change and the Copyright Modernization Act.

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