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Digital Economy Act copyright regime shelved by UK government

Work on a new online copyright enforcement regime under the Digital Economy Act (DEA) has been shelved now that rights holders and internet service providers (ISPs) have voluntarily agreed a framework for educating alleged infringers about the harm of piracy, the UK government has confirmed.

The Department for Culture, Media and Sport (DCMS) told Out-Law.com that it has no plans to progress work on the DEA regime currently on the basis that the "mass notification system" envisaged under the regime "would largely duplicate the industry scheme" that has just been agreed. A spokesperson for DCMS said that a voluntary "industry solution" was always the government's "preferred option".

"The government has welcomed industry’s development of the Creative Content UK alert programme to raise awareness of copyright and point people toward legal ways to access content," the DCMS spokesperson said. "The mass notification system in the Digital Economy Act would largely duplicate the industry scheme, so we do not currently need to bring in its provisions, but we will keep this under review."

The spokesperson added that the new voluntary framework "can be implemented without the degrees of difficulty faced by the DEA, quicker, with more flexibility, and more economically".

Earlier this week it was announced that rights holders groups and the four biggest UK ISPs had agreed a voluntary framework for notifying internet subscribers that their accounts were being used to infringe copyright.

Under the Creative Content UK alert programme, BT, Sky, Virgin and TalkTalk have committed to sending out up to four warning letters to each customer a year if their accounts have been identified as being used to breach copyright laws. Up to 2.5m alerts are expected to be issued within the first year of the scheme. The alert scheme is purely educational and awareness raising in nature and does not contain any mechanism that would see ISPs pass the details of suspected infringers on to rights holders to enable them to pursue redress.

The British Recorded Music Industry (BPI), which together with the Motion Picture Association (MPA) has agreed the voluntary regime with the ISPs, said that the warning letters issued by ISPs will be sent out on the basis of evidence gathered by the rights holders.

"In order to help protect their copyrights, rights holders monitor public peer-to-peer swarms, looking for their copyright content being made available illegally," the BPI said in a statement. "When they discover copyright content being made available illegally, they capture the evidence, verify the copyright content and record the IP address, date and time stamp. A summary of this evidence is then be provided to the ISPs, who establish which of their customers was using the IP address on that date and at that time and send an 'alert' to that subscriber."

"Each alert will provide subscribers will they key information, and the full evidence pack will be available to them (and to their ISP) upon request. The entire process is fully compliant with all relevant laws and regulations. This process is widely used and is accepted by courts in the UK and internationally … The programme is without prejudice to the pre-existing legal rights of both rights holders and ISPs – it does not change the existing legal situation in any way," it said.

No precise date has been set for the first warning letters to be sent out under the new Creative Content UK regime. However, the BPI confirmed that a copyright education and awareness campaign to run separate to the new scheme would launch "before spring 2015", with the Creative Content UK scheme "due to begin at a later date".

The government previously legislated, under the DEA, for a more stringent legal framework to govern ISPs' involvement in tackling the problem of online copyright infringement. However, the Act has been subject to legal challenge and the subsequent proposed regulations that would flesh out the detail about how the scheme would operate and be funded has also faced hold up.

The DEA requires Ofcom to set out a new anti-piracy code to combat online copyright infringement. Under plans the regulator previously published, the code would require ISPs with more than 400,000 broadband-enabled fixed lines – BT, Everything Everywhere, O2, Sky, TalkTalk Group and Virgin Media, to send notifications to their subscribers if it is suspected their account has been used to breach copyright laws.

Under Ofcom's plans, ISPs would issue "standard form" notifications to customers on the basis of evidence of alleged online copyright infringement gathered by rights holder groups and compiled in a 'copyright infringement report' (CIR). The evidence gathering procedures must be approved by Ofcom. The infringement reports would set out when the alleged infringement was said to have occurred and when the evidence was gathered. Ofcom's draft code also sets out the standards that infringement reports must meet.

ISPs that issue subscribers with three letters within the space of a year would add the anonymous details of those customers to a 'copyright infringement list' under the proposals, and rights holders would be able to request access to the list each month and could seek a court order obliging the ISPs to disclose the identity of the suspected infringers so that they can take legal action against them under the Copyright, Designs and Patents Act. Ofcom has said the code would help rights holders to "focus legal action on the most persistent alleged infringers."

Suspected infringers would generally have 20 working days to challenge warning letters they receive before an "independent appeals body" to be appointed by Ofcom, according to the regulator's last published proposals.

Draft legislation for implementing Ofcom's anti-piracy code and the accompanying shared costs order were tabled before the House of Lords in October 2012 but were soon withdrawn. The government told Out-Law.com that "technical changes" needed to be made to the shared costs order before it could be introduced.

Out-Law.com understands that the Treasury had raised concerns that requiring ISPs to bear their share of costs in complying with the regime would amount to levying a tax on the providers, which is something it said it would need to sanction. ISPs had previously raised concern about the costs they were being asked to incur in adhering to the code.

Ofcom staff have not been asked to make any amendments to its last DEA anti-piracy regime proposals for more than a year now, and it appears that the voluntary agreement between the BPI, MPA and ISPs is viewed by the government as a replacement for the complex legislation-backed regime.

The BPI told Out-Law.com that although it "continues to support the objectives of the DEA" it is not "expecting government to currently take any pro-active steps in relation to the DEA" following the agreement on the voluntary Creative Content UK alert programme.

It said it anticipates that the DEA provisions "will remain on the statute books as a backstop should rights holders wish to encourage government to further implement it".

Intellectual property law expert Iain Connor of Pinsent Masons, the law firm behind Out-Law.com, said: "This is perhaps the start of a new era for proper protection the UK’s creative industries. Consumers want good quality entertainment streamed to their homes, mobiles and desktops and most people are prepared to pay; either by receiving advertising or by subscribing to pay-walled services." 

"However, for those people who think that the film makers, musicians and programmers don’t deserve any reward for their work then they will start to receive notices from their ISPs that what they are doing is illegal. We shall have to see what effect this has on piracy," he said.

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