The new law will implement the EU's Copyright Directive, making it an offence to "communicate to the public" copyright works, such as software, if the person knew or had reason to believe that this would infringe copyright.
Until now, UK copyright legislation has been directed to illegal dealing in physical articles – such as CD-ROMs.
Under the Copyright, Designs and Patents Act 1988, dealing in the course of business with "an article" which the defendant "knows or has reason to believe is an infringing copy of the copyright work" is a crime. This existing law, referring as it does to "articles," does not address file transfers on-line where there is no transfer of a physical article from the seller to the buyer. Older cases in other areas have said that electrical impulses, such as broadcasts, cannot be "articles."
The new rules should have been transposed into UK law by 22nd December 2002, but that is now unlikely to happen before late-April.
The draft rules state that "a person who infringes copyright in a work by communicating the work to the public – (a) in the course of business, or (b) otherwise than in the course of business to such an extent as to affect prejudicially the owner of the copyright, commits an offence if he knew or had reason to believe that copyright in the work would be infringed".
This means that, assuming the final form of the Regulations follows that of the draft, there will clearly be criminal liability for simply communicating a copyright work to the public, without permission, as opposed to dealing with an article.
The Federation Against Software Theft (FAST) observes that anti-piracy initiatives have been effective in confronting counterfeit software sold by mail order and at car boot sales. However, FAST says that the biggest growth has been in digital delivery, paid on-line by credit card, and fuelled by a 400% increase in broadband access over the last 12 months.
In general, ISPs have taken down web sites used for distribution of illegal software. However, mirror sites can easily be established using another ISP – of which FAST estimates there are more than 10,000 globally.
The new law offers the prospect of up to a two year jail term and fine to companies running such sites. The law also extends to any director, officer or manager who will be personally liable for the same offence.
Pressure is additionally likely to increase once the Proceeds of Crime Act 2002 comes fully into force. This will allow the courts to seize and confiscate all of a defendant's personal assets (and those of his family and business associates) if the criminal benefit derives from one of the "lifestyle" offences – including copyright infringement – and the defendant is unable to disprove a legitimate source for those assets.