CONSULTATION ON LEGISLATION TO ADDRESS ILLICIT PEER TO PEER (P2P) FILE SHARING RESPONSE FROM ALLIANCE AGAINST IP THEFT

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1 CONSULTATION ON LEGISLATION TO ADDRESS ILLICIT PEER TO PEER (P2P) FILE SHARING INTRODUCTION RESPONSE FROM ALLIANCE AGAINST IP THEFT 1. The Alliance welcomes this consultation, which underscores the government s commitment to tackle the increasing problem of illicit file sharing. 2. While media and political focus has, understandably, been on the losses faced by the music and audiovisual industries, illicit file sharing affects a range of copyright industries including publishing (books and online periodical and magazine articles), computer games software, business software and sports broadcasting. The impact upon the economic health of businesses in these sectors and the jobs and employment opportunities of thousands of skilled people has been enormous The broad legislative route proposed in the consultation document (as supplemented by the BIS Statement dated August 25th) is proportionate, effective and fair to ISPs, rights holders and consumers and, we are confident, will go a long way to addressing illicit filesharing. EXECUTIVE SUMMARY 4. We agree with the two proposed obligations for ISPs, i.e. 1) to send notification letters to subscribers alleged by rights holders to be infringing copyright; 2) to monitor the number of notifications each subscriber is associated with and supply this information to rights holders on receipt of a court order. 5. We are pleased that the government has reviewed its thinking with regards to how technical measures might be used to restrict the activities of repeat infringers. In particular, we agree that the previously recommended period of evaluation of the effectiveness of notification letters is not required. 6. We also agree with the revised proposal that the power to direct the introduction of technical measures should rest with the Secretary of State. 7. The Alliance supports the introduction of the following measures: A requirement on ISPs to send notification letters to those infringers identified by rights holders. The establishment, by ISPs, of databases in order to track repeat infringer activity. 1 For further information on the impact of online copyright infringement see the Alliance s response to BERR s Consultation on Legislation Options to Address Illicit P2P File-Sharing 1

2 The Secretary of State given the power to direct Ofcom to require ISPs to impose, having regard to due process, technical measures (which may include temporary account suspension as a last resort) on repeat infringers on an individual basis. 8. This process, we believe, is proportionate, fair, and dissuasive and will be effective in stemming illegal filesharing. However, there remain additional issues which we believe require further clarification and potential amendment: TIMING OF IMPLEMENTATION OF THE CODE 9. Discussions between rights holders and ISPs with regard to cooperating on measures to address illicit file sharing started some years ago. The Memorandum of Understanding signed between the music and film industries, the main six ISPs and government was signed in July Notification letters were sent as part of that process from October of that year. Under the current legislative timeframe, with Royal Assent likely to be in March 2010, it is not anticipated that commencement of any code will take place until October 2010 at the earliest. 10. This will result in a delay of two years between the date government first announced its intention to reduce filesharing by 70 80% over 2 to 3 years and the implementation of the legislative proposals. Given this, we believe steps should be taken to allow for the development of, and consultation on, the accompanying Code to happen in parallel with the passage of the legislation. This would mean that as soon as the enabling legislation reached the statute book actions under the obligations could commence. TECHNICAL MEASURES 11. We support, while having regard to due process which would include a right of appeal for the subscriber, the imposition of technical measures on repeat infringers (including, as a last resort, potentially temporary account suspension) in the manner now proposed. Requiring legal action to be taken as some sort of experiment to determine whether a combination of letters and legal action might result in a significant reduction in illicit file sharing, as envisaged in the consultation, is disproportionate and would likely to be contrary to the overriding objective of litigation as detailed in Rule 1 of the Civil Procedure Rules. 12. The Alliance believes legal action should only be used when all else has failed to deter the most persistent and egregious offenders. It is lengthy, costly and is likely to be viewed negatively by the public. 13. This view is supported by the recent 2009 Digital Entertainment Survey, conducted by Entertainment Media Research, which found that a notification letter backed up by further direct action from the ISP gave the best results in achieving a significant drop in rates of illicit file sharing 2. 2 This research also clearly highlighted the interest ISPs have in clamping down on illicit file-sharing. It found that, if access to currently free or pirated content was restricted by ISPs, consumers are prepared to increase their ISP spend by 70% 2

3 HOW AND WHEN TECHNICAL MEASURES COULD BE INTRODUCED 14. As the government s revised Statement of 25 th August makes clear, measuring illegal filesharing across a range of networks and different content is extremely difficult. Therefore, we welcome the proposal that Ofcom will assess the efficacy of different technical measures on different networks. It is essential that such a thorough, and expeditious, assessment takes place. Alliance members would be very keen to participate in this assessment. It is particularly welcome to note that any decisions as to technical measures will also need to be taken based on robust and transparent evidence of the general direction and pace of change. We also acknowledge the need for an effective and robust appeals process to accompany the introduction of any technical measure, including temporary account suspension. 15. However, we do question the continued position that the power to introduce technical measures will be held in reserve; to be introduced via secondary legislation. We believe this is an unnecessary legislative addition and recommend it forms part of the primary legislation. The delay this will create will restrict the effectiveness of the code and the ability of all stakeholders to address file sharing and stem the increasing financial losses. 16. A key benefit of the proposed regulations is that they will apply to all ISPs, and establish consistent practice across ISPs in respect of notifications based on right holder complaints and the maintenance of serious infringer lists. However, the regulations will need to adopt a fair, balanced and proportionate approach to the imposition of restrictions on access by ISPs on individual users, on case by case. 17. It is important to be clear that we anticipate technical measures only being introduced against individual subscribers following an agreed number of notifications as to be set out in the Code of Practice. This may work in the following way: Any initial infringement potentially attracts a notification Subsequent infringement will attract a number of further warnings (the exact number to be decided) Any process which leads to the imposition of any restriction on access must involve a clear route of appeal and challenge for the account subscriber, but that process must also deter frivolous challenges 18. Such a process, we believe, will address concerns of proportionality, give innocent account holders sufficient information and time to secure their networks, afford actual offenders time to change their behaviour, and ensure there is a clear route of appeal. EDUCATION 19. The Alliance agrees that the proposed legislation and code of practice should be supported by effective educational messages in order to help bring about the necessary change in public attitudes and behaviour. 3

4 20. However, we strongly contend that it is wrong for Ofcom only to give consideration to the extent to which owners of copyright have taken effective action to educate consumers and change public attitudes to copyright infringement (4.26) [emphasis added]. 21. The proposed legislation, and the discussions and MOU activity which preceded it, demonstrate that illicit file sharing is a shared problem and an effective solution requires action from all interested parties. Unfortunately, the consultation appears to imply that the internet community and government have no role to play in educating the public as to why file sharing is wrong. This issue should be dealt with during discussions around the proposed code of practice. 22. A number of Alliance members already conduct large scale public awareness campaigns, such as those developed by the Industry Trust for IP Awareness. In addition, we would point to the educational aspect of the notification letters themselves. Paragraph 4.12 begins to scope out what information the notification letters will contain. This includes: Advice and guidance on securing wireless networks where appropriate; A statement that the notification is sent pursuant to the legislation; Advice on how / where to access legitimate content; Information about copyright and why it is important; and Anything else specified by the code. 23. Such information clearly has a strong role to play in educating the public on the harm caused by digital copyright theft and pointing them to services where content can be accessed legally. 24. It is important that Ofcom gives consideration not merely to wide scale public advertising campaigns but also education initiatives in their broadest sense, for example the notification letters themselves, promotional activity from ISPs to publicise new service offerings etc. APPEALS PROCESS 25. As identified in the consultation document, a fair, transparent and robust appeals process will lie at the heart of the effectiveness of any legislation and accompanying code of practice. Such a process is crucial to ensure political, industry and, most importantly, public confidence and acceptance in the proposed system. 26. We would look to the code to outline how such an appeals process would operate. COSTS 27. We agree that the detail of how the costs are to be met, in relation to meeting the initial two obligations, should be laid out in the legislation. Costs may well be a contentious point in the discussions on the code and therefore dealing with them up front will ensure the drafting of the code is not unnecessarily delayed. This is important to ensure that the short time there will be for drafting is spent discussing substantive as opposed to administrative points. 4

5 28. As a point of principle, given rights holders rightly bear the investigatory costs, it is not unreasonable for ISPs to have responsibility for meeting the cost of notifying the infringing account holders. It may also be worth exploring whether the ISPs could recoup this cost from the infringer themselves via their monthly bill. 29. In relation to the cost of maintaining a database of repeat infringers, we do not believe this cost to be substantial given the ability for so much of it to be automated, and given that the ISPs have infrastructures already in place to cope with customer databases. However, please see below with regards to industry s proposal for the creation of a Single Point of Contact. THE SERIOUS INFRINGER DATABASE AND A SINGLE POINT OF CONTACT 30. The consultation is silent on the process by which information regarding serious infringers might be shared by ISPs with rights holders, other than by way of existing disclosure regulations (such as pre action disclosure applications). We understand this will addressed as the Code is drafted and look forward to contributing to that process. This is important for Alliance members as it is clear that, in addition to the damage caused by individuals, a number of these repeat infringers will be businesses seeking to avoid paying licence fees by obtaining those products through unlawful P2P file sharing. 31. FACT (Federation Against Copyright Theft) has been working on a proposal for a Single Point of Contact which has the potential to be a cross industry led solution to the notification process and repeat infringer database. For that reason, it is worth raising as part of our response to this consultation. 32. This solution takes into account: Security and privacy of personal data Identification of repeat infringers, including those who move between ISPs Education and awareness including support for consumers who receive notices Accurate statistical information ISP action taken against repeat infringers 33. For further information and a full briefing please contact Howard Lamb at FACT on Howard.Lamb@fact uk.org.uk. SMALL BUSINESS EXEMPTION 34. Whilst burdens on small businesses should be properly addressed, it is important that no safe havens are created for repeat infringers. We do not agree with the proposal that there should be a small business exemption. If infringement is taking place over their networks, then the ISP should be required to address it if notified by a rights holder. While we understand the concerns relating to costs, we do not believe these will necessarily be excessive. If they are a 5

6 small ISP with a low level of traffic, then it is unlikely they will be required to send many letters. Consequently, maintenance of a serious infringer database would be minimal. 35. Our reasoning for this is that a) such an exemption would give these ISPs a commercial competitive advantage over other larger ISPs; b) even if these were ISPs supplying low speed bandwidth, this would still attract potential infringers looking to illegally share smaller music files. 36. What is of fundamental importance is that the principle that ISPs share a responsibility in tackling illicit P2P file sharing is not lost or undermined. Without a level playing field there is a real possibility this would happen. 6

7 ABOUT THE ALLIANCE AGAINST IP THEFT Established in 1998, the Alliance Against Intellectual Property (IP) Theft is a UK based coalition of 21 associations and enforcement organisations with an interest in ensuring intellectual property rights receive the protection they need and deserve. With a combined turnover of over 250 billion, our members include representatives of the audiovisual, music, video games and business software, and sports industries, branded manufactured goods, publishers, retailers and designers. The Alliance is concerned with ensuring intellectual property rights are valued in the UK and that a robust, efficient legislative and regulatory regime exists, which enables these rights to be properly protected. Our Members work closely with trading standards and local police forces to reduce the harm caused by intellectual property crime in local communities and ensure legitimate businesses and traders are able to operate fairly. We work closely with the Department for Business, Innovation and Skills and the UK Intellectual Property Office to raise awareness of the harm caused by IP theft. We are also participants in the IP Crime Group, which facilitates cross departmental dialogue and joint working amongst the relevant enforcement bodies and organisations. ALLIANCE MEMBERS Anti Counterfeiting Group Authors Licensing and Collecting Society British Brands Group BPI (British Recorded Music Industry) British Video Association Business Software Alliance Cinema Exhibitors Association Copyright Licensing Agency Design and Artists Copyright Society Entertainment and Leisure Software Publishers Association Entertainment Retailers Association Federation Against Copyright Theft Federation Against Software Theft Film Distributors Association Institute of Trade Mark Attorneys Motion Picture Association Premier League Publishers Licensing Society CONTACT: Susie Winter susie@allianceagainstiptheft.co.uk Associate members: Anti Copying in Design British Jewellery, Giftware & Finishing Federation Video Standards Council 7