FAPL wins Section 97A blocking order against live streaming services

Now that it has become established practice for content owners to close down P2P sites from which illegal content is downloaded, the battle has moved on to streaming services.

Yesterday Mr Justice Arnold gave judgement in the case of FAPL v BSkyB and others in relation to an application by FAPL against the six major UK ISPs in order to implement site blocking against a website called FirstRow Sports which provides access to streaming of live football matches.

As Arnold J himself puts it "The present application differs from the applications considered in the [previous section 97A site blocking decisions] in a number of respects. First, the applicant and its supporters constitute a different class of rightholder [i.e. football rights rather than movies and music companies]. Secondly, unlike the websites the subject of the previous applications, FirstRow is not a peer-to-peer ("P2P") file-sharing website. Rather, it is a website which facilitates access to streams of television broadcasts of sporting events. Thirdly, as a result, the issues on infringement are somewhat different."

He goes on to apply his own analysis from Dramatico Entertainment Ltd v British Sky Broadcasting Ltd (the PirateBay case).

The key points of difference from the previous cases are the consideration of whether there is a communication to the public, where he applies the reasoning of the ITV v TVCatchup decision and concludes that the P2P live streaming services are a communication to the public and that the communication occurs in (at least) the UK.  He also determines that FirstRow, although only an indexing service and not one which originates the communication to the public, is responsible in law for the communication to the public (or at least jointly liable).  

Accordingly he agrees to issue the orders in the terms sought by the FAPL. 

It is noteworthy that, even though FirstRow did  not appear in the case, Arnold J was careful to satisfy himself that they were responsible for the infringements prior to issuing the orders.

Japan launches Operation Decoy File

This diagram was released by the Ministry to explain
Operation Decoy File

Rocket News 24, a Japanese entertainment site, has reported on Japan's new tactic to combat illegal file sharing: Operation Decoy File. Japan already has strict copyright laws under which illegal downloaders can be jailed for up to two years  and/or a fine of up to  ¥2 million (approx. GBP 13,700) and illegal uploaders can face up to ten years in prison and/or a fine of up to ¥10 million (approx. GBP 68,400).

Now Japan's Ministry of Internal Affairs and Communications has announced, in conjunction with the film and music industries in Japan, that it will launch Operation Decoy File. The excellently named operation involves introducing - would you believe it? - decoy files containing copyright messages into popular P2P file sharing networks. The user clicks on a file intending to download a film or song and instead receives the following message (kindly translated by Rocket News 24):

"A Warning from the Organisation to Raise Awareness of Copyright. Files with the same name as this contain content which is in violation of copyright when distributed over P2P networks such as Winny or Share.

Knowingly downloading and of course uploading files that are protected by copyright law without the consent of the owner over the internet is illegal copyright infringement. Please stop immediately.

Also, from 1 October 2012, downloading content which is known to be available for sale is punishable by a maximum 2-year prison sentence and/or ¥2,000,000 fine.

Our copyright organisation is working to eliminate copyright infringement by file sharing software. In addition to consulting the police to obtain the disclosure of user’s identities, we want to focus on user education."

File sharers have naturally attempted to differentiate between the films and songs they are trying to download and the text files, for instance by checking the size of the files. A thought process which the Japanese authorities are likely to also have had, causing them to at least try to camouflage their decoy files. The Ministry has made it clear that they want to see whether it is possible to reduce the already low incidence of file sharing in Japan by increasing copyright awareness, a tactic which might work better in Japan than other countries.

Running P2P site can be a criminal offence, rules Spanish court

Via International Law Office comes a note by Ives Jadraque (Grau & Angulo) entitled "Murcia Court of Appeal Decision on Conduct Through P2P Networks". This describes a decision of that court last September as to whether the creation and administration of a website can be a criminal offence under Article 270 of the Criminal Code. The website in dispute here was www.elitedivx.com, which facilitated peer-to-peer file-sharing. While the trial court considered the provision applicable, the Murcia Court of Appeal took the opposite view. Comments Ives Jadraque:

"The appeal court gave no clear guidance on whether providing links to P2P systems with the aim of making a profit is a crime against intellectual property, stating only that "the conducts that are carried out through [P2P networks]" can be considered as a crime against intellectual property. The question is thus whether the conduct carried out by the defendants can be considered as having been carried out through P2P networks.

Decisions on the possible criminal nature of providing access to P2P platforms are contradictory. The September 30 2009 Alava Court of Appeal decision in the Infektor Case considered that such conduct can constitute a crime against intellectual property. Conversely, the September 11 2008 Madrid Court of Appeal decision in the Sharemula Case (referred to by the Murcia Court of Appeal in this case) declared that such conduct cannot be considered a criminal offence.

The decision is important because it expressly refers to the possible criminal nature of exchanging files through P2P platforms, stating in particular that such conduct implies reproduction and public communication (Article 270 of the Criminal Code) whenever that conduct causes detriment to a third party's rights (a feature of P2P exchanges, according to the appeal court) and has a profit-making aim.

The appeal court's considerations on the requirement for a profit-making aim, established in Article 270, are remarkable. The court considered this requirement to be fulfilled on account of the profit obtained by the defendants from the adverts on the website. This interpretation differs not only from that of the Cartagena Criminal Court, but also from other recent case law, where profits were also obtained from adverts. In these cases it was established that there had been no profit-making aim because such benefits were not directly linked to the provision of access to P2P networks".

The Talent Breaks Ranks and Fights for the Audience

A Report received in June by the UK's Strategic Advisory Board for Intellectual Property (SABIP), Attitudes and Behaviours of Digital Consumers in the On-line World, turned up the juicy and instructive fact that consumers would be happy to pay for content if they believed the income was benefitting the creative community. This powerful aid to the arguments of creators who, not unnaturally, would like to be paid for digital use of their work, did not immediately prompt a shift in the public policy position of the creative community. Until now. At last, music creators have taken a public stand independent of their contractual partners (or should that be masters?).

Last week the UK's Featured Artists' Coalition (FAC) released a joint statement with the British Academy of Songwriters Composers and Authors (BASCA) and the Music Producers' Guild (MPG). The statement argues that the government's new position on P2P and the disconnection for warned repeat offenders would not result in a music industry that is "vibrant, functional, fair and competitive".

The statement continues: "As a result, we believe that the specific questions asked by the consultation [see below] are not only unanswerable, but indicate a mindset so far removed from that of the general public and music consumer that it seems an extraordinarily negative document." Hooray! It's all about the audience, stupid. Or in the words of Benjamin Zander, conductor of the Boston Philharmonic, "if nobody wants to listen to your music there is nothing you can do to stop them". Is this the dawn of the talent driving the debate? The solution is not to be found by trying to shoehorn real world business models into the metaverse. Creators have a chance to harness consumers' sympathy and apply the huge repository of their creative imaginations to workable future digi-business models.

Music Week, the UK music industry's organ, reported support from UK Music: "UK Music is pleased that Government is proposing accelerated and proportionate action to meet their stated ambition of reducing illegal file-sharing by 70-80% within 2-3 years". FAC, BASCA and the MPG are members of UK Music. UK Music is a coalition, "an umbrella organisation representing the collective interests of the UK’s commercial music industry, from artists, musicians, songwriters and composers, to major and independent record labels, managers, music publishers, studio producers and collecting societies." Of course it helps if the industry speaks with one voice - it is less confusing for parliamentarians, civil servants, the public and the press. But contractually inherent in a competitive industry is conflict of interest - so it was only a matter of time before the coalition stumbled up against an issue (or should that be THE issue) that could fracture solidarity. Record companies and publishers need recording artists and writers more than the artists and writers need the record companies and publishers (something the writer, fruitlessly, tried to point out to the talent in the mid-90s when the coalition was formed).

Estimates for the damage done to the music industry by file-sharing (see Consultation on Legislation to Addess Illicit P2P File-Sharing) were approximately £180 million per year (£152 million for film and tv). The plucky triumvirate of talent assert this estimate is based upon the premise that a P2Ptrack results in a lost sale. "..... the estimate is no more than "'lobbyists' speak' [as] it has little support from logic and no economist would seek to weave such a number into a metric aimed at quantifying a 'value gap' for the industries challenged by P2P....." The joint statement notes that the consultation following Lord Carter's Digital Britain Report had thrown up an estimate of £56m-£85m as costs for monitoring illegal file-sharing and labelled such an estimate a "gross underestimate". "Looking backward for insight into how we adapt mass-production product models to the digital age of access and services has been a major obstacle to progress over the past decade................We must begin to look forward to business models that we cannot even imagine yet."

"As creators' representatives, we are willing to be partners with government in exploring and navigating the opportunities and challenges brought by digital technologies. What we will not be a party to is any system that alienates our members' existing audience and potential new audiences"

The Back Story:

Readers will recall that the UK's Business Secretary, the gorgeous, pouting Peter Mandelson, returned from his summer idyll recently, and on August 26th publicly embraced disconnection for illegal file sharers, presumably having overlooked the fact that this had not been the UK government's position in the Digital Britain Report published in June this year.

Baron Mandelson of Foy, First Secretary of State (an honorific office) and Lord President of the Council was accused by Tom Watson MP (who until recently had overseen the goverment's internet policy) of "unravel[ling] Stephen Carter's settlement" and that this new position would be "pander[ing] to rightsholders who have failed to find new business models for the digital age". (He makes it sound so simple, this new business model malarky).

In response Mandelson burst into print in The Times on August 29th, saying "we would consider legislation that includes temporary account suspension only if it was seen as the sanction of last resort. It would only follow a well-established series of warnings and clear evidence that they were taking action to defend their own rights. This will not turn your ISP into Big Brother. The process is driven by rights holders reporting activity on public file-sharing websites rather than service providers monitoring individuals’ internet traffic."

Resiling, my Lord?

The "Mandelson position" was welcomed by the record industry with BPI CEO Geoff Taylor supporting the move (shift?), saying:"Digital piracy is a serious problem and a real threat to the UK’s creative industries. Today is a step forward that should help the legal digital market to grow for consumers. The solution to the piracy problem must be effective, proportionate and dissuasive. We look forward to working with Government and ISPs on the details of these proposals to ensure these objectives are met.”

Music Tank, the University of Westminster's business development network carries a summary here and an interview on the subject with Jon Webster, the Music Managers' Forum Chairman, here.

The Featured Artists' Coalition's manifesto for the digital age is here.

EC threaten US with Trade Sanctions and P2P EU Report Gloom

As the P2P debate rages and Europe releases the depressing results of a recent EU study on P2P - of which more later - Brussels is challenging the US in the real world of copyright.

The EU is threatening the US with trade sanctions over the US's failure to provide adequate copyright protection for European composers, songwriters and their publishers when their music is perfomed in restaurants and bars across the pond. US law gives an exemption from a liability to pay ASCAP, BMI or SESSAC licence fees for public performance of songs in certain bars and restaurants (annoyingly referred to as a "tax" in some reports). This is possible under a US copyright law amendment dating from the 1990s.

According to EuroActiv (31 July 2009), "The EU has safeguarded its rights to suspend trade benefits granted to the US if the Copyright Act is not amended," reads a European Commission report published in July regarding trade barriers used by the US.

Protests by the EU did result in US financial assistance for two whole years to compensate EU writers and publishers. This "deal" expired in 2004 and has not been replaced by any other compensation (or a change in US law).

ASCAP and BMI fought very hard against this amendment in the 1990s, sadly with very poor support from US songwriters who seemed reluctant to make the trip to Capitol Hill for the fight. (This writer wonders whether US restaurant and bar owners pay their greengrocers for the parsley that is used to garnish the food - if music is purportedly "incidental" to the dining or drinking experience, surely the parsley is incidental to the meal.)

And, those readers, who have no problem being deafened by the sound of the slamming stable door, might also like to suggest the Commission tries to correct the failure of US cinemas to pay performance royalties to composers of original film scores for the public performance of music in the film - a practice that dates from shortly after World War II and that has been redressed partly thanks only to the efforts in the UK of the PRS in their Membership Agreements (PRS 1 - Music User Nil -for a change). I suppose the argument might be that if music is not properly remunerated in the real world what hope is there in the metaverse.

And so to the Metaverse: Yesterday, along comes a profoundly depressing report from the European Commission - Commission Staff Working Document: "Europe's Digital Competitiveness Report" - very helpfully, and slightly gleefully summarised on p2p-blog.com. Item 5.1 in the Report, entitled Willingness to Pay for Content, reveals that a 2008 survey indicated that fewer than 5% of Europeans had paid for content in the preceding 3 months. Of such individuals, half of them said that nothing would persuade them to pay for content -- though improvements in quality, better payment methods and the right to share materials would tempt some 30% of those surveyed to change their habits. As the P2P blog says:

"...... a pretty important finding, and it goes counter to what entertainment industry executives have been claiming for years. It's impossible to compete with free, they argue, but paid online entertainment would thrive if only those file sharing sites and networks would get shut down."

The Report goes on:

"The diffusion of broadband has brought about rapid growth in the distribution of online content, legal as well as illegal. While young users are at the forefront in the use of the internet for content and entertainment activities, they also stand out from the rest of the population in their attitude towards the payment of online content; they are generally unwilling to pay for many of the services, except those providing some additional added value over and above that provided by those services they can obtain for free.

"This stylised fact is posing a number of challenges to policy makers, regulators and industry."

Oh really?!

The Commission Report's conclusion on paying for content should be an inspiration to us all: "solutions to these problems need to be found; through finding innovative and sustainable business models as well as a favourable regulatory environment" You don't say!