LIBOR transition: government proposes legislation to deal with 'tough legacy' contracts
Out-Law Analysis | 05 Jan 2017 | 11:19 am | 6 min. read
But a barrister who acted in one recent such case has told Out-Law.com that those conspiracy to defraud charges can't work when there is just one person selling the boxes because more than one person is needed for a conspiracy to exist.
Ari Alabhai of QEB Hollis Whitman said that prosecutors might have difficulties pursuing those cases under UK copyright laws.
Alabhai acted for the Federation Against Copyright Theft (FACT) in a private prosecution against two men who supplied so-called 'IPTV' devices to pubs and consumers. The prosecution followed an investigation by the Police Intellectual Property Crime Unit at the City of London Police, and was brought in conjunction with the Premier League in England.
On 9 December, Terry O’Reilly was sentenced to four years in prison, and Will O'Leary handed a two year suspended prison sentence, at Nottingham Crown Court after both were convicted of conspiracy to defraud.
In a statement issued at the time, FACT director general Kieron Sharp said the ruling "should send a hard-hitting message to anyone involved in selling illegally modified set-top boxes". Sharp said: "The sale and distribution of these boxes, which are loaded with infringing apps and add-ons allowing access to copyrighted content, is a criminal offence and the repercussions could result in years behind bars."
Alabhai told Out-Law.com there were reasons why FACT had pursued a conviction under the common law of conspiracy to defraud instead of pursuing a case against the men under UK copyright laws.
Alabhai, who has been involved in more than 300 prosecutions involving issues of copyright, said it can be challenging to go into the detail of copyright law to prove a case before a jury. The law of conspiracy to defraud is less complicated and so will be easier for a jury to consider, he said.
However, the conspiracy to defraud route is not available to prosecutors where only one person is engaged in an alleged offence. Alabhai said there are other potential avenues open to prosecutors seeking to clamp down on the supply of pre-loaded TV set-top boxes, but identified potential issues with the options.
Alabhai said prosecutors could make use of the inchoate offences of encouraging or assisting an offence under section 44 of the Serious Crime Act 2007, in conjunction with a section 107(2)(a) offence listed under the Copyright, Designs and Patents Act (CDPA).
Under section 107(2)(a) of the CDPA, it is an offence for a person to make an article specifically designed or adapted for making copies of a particular copyright work, knowing or having reason to believe that it is to be used to make infringing copies for sale or hire or for use in the course of a business.
A prosecution brought under section 107(2)(a) would be really complex, Alabhai said. He also pointed to differences in the maximum penalties that could be levied on those convicted of committing conspiracy to defraud, compared to people who convicted of a section 107(2)(a) offence.
The maximum penalty of a two year prison sentence, and/or a fine, for a section 107(2)a) offence is less than the 10 year maximum sentence that could be imposed for those convicted of conspiracy to defraud.
Alabhai also explained that potential difficulties might arise in bringing a prosecution which alleges that suppliers of some of the newest TV set-top boxes in existence breach the laws on circumvention of technological protection measures under the CDPA.
Under section 296ZB(1)(c)(i) of the CDPA, it is an offence if a person, in the course of a business, sells or lets for hire any device, product or component which is primarily designed, produced, or adapted for the purpose of enabling or facilitating the circumvention of effective technological measures.
Some of the latest set-top boxes are fairly simple pieces of equipment and do not deliver content to users by first breaking encryption codes on that content, Alabhai said. This is unlike more technologically complex systems that were previously relied upon by some people to access subscription-only content, he said.
Instead, some of the newer boxes in use work by communicating with internet servers from where the subscription-only content can be streamed. The boxes, Alabhai said, can be configured in a way which allows particular types of streamed content to be made available to users.
Alabhai said he would welcome changes to UK copyright laws to deal with cases where technology is used to access copyright-protected content that has not been encrypted.
However, copyright law expert Iain Connor of Pinsent Masons, the law firm behind Out-Law.com, said that there would be a need to avoid unintended consequences arising from any change in the law. He said just because technology might be adapted and used for unlawful purposes should not necessarily mean the technology itself is unlawful.
Connor said very few prosecutions and/or civil cases relating to the supply of technology are currently brought under existing copyright laws, particularly those that relate to digital rights management offences under the CDPA. He said greater enforcement of current rules should take place before the law is extended.
A trial before Teeside Crown Court in May 2017 is likely to be the first test case in the UK on whether section 296ZB(1)(c)(i) of the CDPA does offer a potential route to prosecute suppliers of modified TV set-top boxes.
Prosecutors in the case have charged 54 year-old business man Brian Thompson of Barnaby Avenue in Middlesbrough with three counts of copyright infringement.
Thompson is alleged to have "sold a device primarily designed, produced or adapted for the purpose of enabling or facilitating the circumvention of effective technological measures" on two dates in 2015, in breach of section 296ZB(1)(c)(i) of the CDPA.
Thompson has also been charged with, in the course of a business, having "advertised for sale a device primarily designed, produced or adapted for the purpose of enabling or facilitating the circumvention of effective technological measures" between 25 July 2015 and 30 January 2016, in breach of section 296ZB(1)(c)(iii) of the CDPA.
Thompson has said he will challenge Middlesbrough Council's case that it is not legal to sell TV set-top boxes that are pre-loaded with "add-ons" that enable users to access material protected by copyright for free, according to local news site Gazette Live.
The lawyer defending Thompson, Paul Fleming, told Teeside Crown Court that the case "involves complicated areas of copyright", Gazette Live reported in October.
“The issues are both technical, as to what these devices are capable of and whether it gives rise to an offence, and complicated legally because of the implications of the assertions that the Crown make," Fleming said, according to the report. "It’s a matter that the resolution of which will involve obtaining technical opinion, expert opinion, on the potential of the equipment and what it can and cannot do in the context of this legislation."
The case before Teeside Crown Court is likely to be monitored closely by broadcasters and sports bodies eager to preserve the value of their rights in sporting content.
Sports law and broadcasting rights specialist Julian Moore of Pinsent Masons said the issue matters to rights holders because broadcasters are paying increasing amounts of money for the right to show in-demand sporting matches on an exclusive basis. He pointed to the fact that Sky and BT Sport paid £5.136 billion for the rights to broadcast matches in the Premier League in England over the 2016/17, 17/18 and 18/19 football seasons, up from the £3bn contract that applied to the previous three seasons.
Moore said that both the Premier League and Sky in particular have shown an appetite to tackle those that provide consumers with access to matches via online sources. The Premier League has previously won injunctions under the CDPA forcing UK internet service providers (ISPs) to block their customers' access to websites that provide links to online streams to its matches. It has also cracked down on those that post short video clips from games on social media.
Moore said that there is an acceptance within the broadcasting industry and sporting authorities that there is some piracy, particularly activity carried out online by people based overseas, that they might not be able to combat directly.
However, he said where piracy occurs on their doorstep and presents a threat to their business models, infringers can expect rights holders to throw a lot of resources into enforcement action and to promote successful cases as a deterrent to others.
LIBOR transition: government proposes legislation to deal with 'tough legacy' contracts