From big issues to daily detail: copyright in all its glory

While the big issues continue to preoccupy copyright analysts and policy-makers, it's good to be reminded occasionally that the facts on on the ground reflect an ongoing battle between those who seek to make money out of copyright and those who seek to avoid paying.  The case below is an interesting one in that regard: do we have a noble user here, unfairly restricted by the exploitation of outmoded rights and antiquated business models, or a grubby, undeserving fee-dodger? The decision is yours.

Federation Against Copyright Theft Ltd v Stanley Ashton is a Divisional Court, England and Wales, decision of a two-man team (Lord Justice Laws and Mr Justice Irwin) which comes to this blogger via a note published on the useful Lawtel subscription-only service. The twosome were hearing an appeal by way of case stated against a decision of a district judge to dismiss the information laid against Ashton which alleged that he had committed offences contrary to the Copyright, Designs and Patents Act 1988 (CDPA), s.297(1).

Ashton was a premises licence holder and the designated premises supervisor of a social club. Each of the three informations alleged that. on three occasions. he had dishonestly received a B/Sky/B broadcast of a premiership football match, provided from a place in the United Kingdom, with intent to avoid payment of a fee in accordance with a non-domestic viewing agreement, contrary to s.297(1). The magistrates' court found that Ashton's club was a members-only establishment and that he had entered into a non-domestic television contract with BSkyB to show its live programmes in the licensed area of the club over two periods; however, the contract was terminated each time by BSkyB for non-payment of the monthly subscription fee.

Investigators had visited the club four times and Ashton was advised that he had to have the correct contract if he was going to show BSkyB broadcasts. Ashton accepted that the TV and projector in the licensed area were showing pictures of premiership football games which BSkyB had exclusive rights to show. He had a residential Virgin Media package which included Sky Sports Live, for his residential flat which was handily located the licensed area. The parties accepted that there was a substantial price difference between the monthly subscription for BSkyB for domestic and non-domestic customers. Ashton maintained, relying on the unreported decision in Federation Against Copyright Theft Ltd v Gabriel, 23 August 2012 to support the proposition that the prosecution had to prove that a defendant must not have paid any charge for the programme which was received. The court concluded that Ashon did make payments via his Virgin Media contract -- which included Sky Sports -- and acquitted him.

On appeal the questions were these:

• did s.297(1) proscribe the reception of a programme in circumstances, where within the UK, (i) a person (X) subscribed to a company (Y) which was only entitled to provide programmes for domestic use; and (ii) Y provided those programmes at a charge which was lower than the charge applicable for their reception in non-domestic/commercial premises; and (iii) X knew that the price charged by Y was lower than the charge applicable for the reception of the programmes in non-domestic/commercial premises and X also intended to avoid payment of the higher charge; and (iv) X knew that the higher charge was payable to another company which had exclusive rights to broadcast the programmes in non-domestic/commercial premises?
• was the magistrates' court right to find that the payment for the " domestic use only" service to Virgin Media in those circumstances was the payment of any charge applicable to the reception of the programmes in commercial premises?
• having regard to the evidence that was agreed and the live evidence called, was there any evidence to support the conclusion that Ashton did make payment to BSkyB via his Virgin Media contract which included Sky Sports Live?

In an extempore judgment that has not found its way on to BAILII the court allowed the appeal, returning the case so that the magistrates; court could ascertain whether Ashton was acting dishonestly or not. According to the Divisional Court:

• Under s.279(1) a person who dishonestly received a programme included in a broadcasting or cable programme service provided from a place in the UK with intent to avoid payment of any charge applicable to the reception of the programme committed an offence.
• The Murphy v Media Protection Services cases did not assist as they did not address the situation of where a programme could be obtained from two providers.
• It seemed highly improbable that Parliament, when enacting the provision, did not have in mind the difference between domestic and commercial use.
• The phrase "any charge applicable to reception" did not require such a narrow interpretation as that given to it by the magistrates' court and it had to be read as a whole. Section 297 was a penal provision and could not be given such a narrow interpretation. He had also erred in holding that payment made by S to Virgin Media amounted to a payment to BSkyB. 

Jurisdiction in France over acts committed in Italy: Cour d'appel fights Cour de cassation

For a variety of reaons (added burden of proof in having to show bad faith, turning over control of the case to a public prosecutor) criminal copyright decisions by the Supreme Court (Cour de cassation) tend to be less common than civil infringment decisions in France. One such ruling came on November 29, 2011 and, what's more, involved issues of private international law, making it all the more noteworthy.

An Italian national took the liberty of reproducing an article written by someone else (also Italian) for the French daily "Le Monde" and publishing it in the paper and electronic versions of the Italian newspaper "Il Foglio". Criminal copyright infringement proceedings ensued and before the trial court the accused argued that French courts did not have jurisdiction (as the infringing acts occurred in Italy in his view). The trial court disagreed and found him guilty. This was upheld on appeal. In a decision handed down in 2008 the Cour de cassation reversed and faulted the appellate court for not having verified that the infringement had actually occurred in France and remanded the case back to the Court of Appeal.

In its subsequent decision of November 2009, the Court of Appeals, noting that Le Monde was a French entity, again held that French courts had jurisdiction and affirmed the trial judgment. Its reasoning was based on Section 113-7 of the French Criminal Code which provides:

"French criminal law applies to any crime as well as any misdemeanour punishable by imprisonment committed by a French national or by a foreigner outside the territory of the Republic where the victim is a French national at the time of the infraction."

In its most recent ruling, the Cour de cassation again reversed, stating that under the Berne Convention (article 5.2) the protection afforded an author is determined by the law of the state where such protection is sought, which means the law of the State on whose territory the infringing acts took place and not that of the state where the harm was suffered. Moreover, it stated, the commission of the infraction on the territory of the Republic is a constituent element of the infraction. The Court therefore found that given that the infringement occurred outside of France the Court of Appeal had misapplied the aforementioned principle.

The Cour de cassation's dicta regarding the meaning of the rule laid down in article 5.2 of the Berne Convention is of particular interest because a number of recent rulings by lower courts have suggested that the rule allowed for application of either the law of the State where the alleged infringment occurred or that of the State where the harm was suffered. It will be interesting to see how the lower courts interpret this most recent pronouncement by the Supreme Court on this point (bearing in mind the particular context of this case (criminal) and the fact that there is no principle of binding stare decisis in French law).

Russia Prosecuting Online Infringement. For the WTO?

The Criminal Code of the Russian Federation provides for those convicted of copyright infringement to forfeit up to 18 months of their wages, among other possible punishments including jail time or work-relief.  (Art. 146.) 

Rumor has it that though Russia has these laws on her books, their enforcement has been less ideal.  According to an AFP story on Yahoo! News, Russia is working to change that.  The proposed motive: entry into the WTO.

The Recent Enforcement

Basic story-line, young man uploads music tracks to a social networking site without permission from the copyright owner.  Other users download the songs.  In this case, the Russian music tracks uploaded by the young man were downloaded over 200,000 times by other users.  The young man was caught and prosecution charges filed.

High-profile raids to confiscate infringing goods have also increased in the move to step-up enforcement.

The WTO Relationship

According to the AFP story, Russia is increasing its copyright enforcement in order to finally join the WTO, a process it began in 1993.  The article states, “Russia's inability to implement any meaningful form of copyright protection has been one of the main issues raised by the United States during the latest rounds of two sides' World Trade Organization negotiations.”

Some other research sheds some doubt on this reasoning.  Russian WTO negotiations with IP-promoting Western governments have been going well recently.  The EU backed Russia for WTO admittance late last year and negotiations with the US have been progressing with the support of President Obama.  (See here, here and here.)  And while there is some discussion of intellectual property enforcement being a problem, the major barriers remaining are more likely tariffs.

This is not to say that increased enforcement will not help Russia in its bid for the WTO, but merely to suggest that it is not quite as an important factor as the AFP story suggests.  At the very least, such enforcement should help get Russia removed from the Priority Watchlist in the infamous Special 301 Report (pdf).

Ignorance of the Law, an Excuse?

Throughout my childhood my father used to tell me, “Ignorance is no excuse for the law.”  It didn’t matter whether I was jaywalking or learning the hard way that glass jars of pickles don’t bounce; ignorance was no excuse.  Well it looks like there may be one time when ignorance is an excuse.  But I’m in doubt.

Criminal Charges under US Copyright Act Dropped

Many readers may have been following the USA v. Crippen case on other sites.  - Wired has a fairly detailed running account of the case. – This is the case in which California resident Matthew Crippen was criminally charged for violations of the US Copyright Act.  It was to be the first criminal case addressing a violation of the Copyright Act’s restriction against circumvents technical protection measures (TPMs) designed to protect copyrighted works.  “Was” because this past week the prosecution dropped the charges.
The many reports on the prosecution’s decision list a number of factors leading to the decision to drop charges.  Rumors of prosecutorial misconduct and concerns about the jury learning of crimes committed by the prosecution’s witnesses are two of the reasons mentioned.  (See Wired, above, and TechSpot for more on these reasons.)  But it seems like the main reason, which is related to both of these, is Judge Gutierrez’s decision that the prosecution would need to prove that Crippen knew he was violating the law.  (“The government said it would have dropped the case if that more onerous standard was required.” Wired.)

Looking for “Knowledge”

I’m still trying to figure this one out.  According to Wired (specific article link), “Gutierrez ruled that the government had to prove Crippen knew he was breaking the law by modding Xboxes.”  Maybe there’s a nuance that got missed or misinterpreted somewhere between the judge and Wired.
Crippen was modifying X-Boxes, allegedly so that they would play pirated games.  From what I can gather, the statute Crippen was charged for violating was 17 USC 1201.  I am not sure if it was part (a) for “circumventing a technical measure” or part (b) for “circumventing protection afforded by a technical measure.”  However, the rest of the provisions in each section are parallel so we can look into the knowledge element without knowing with which specific provision Crippen was charged.

Subsections (A)

The first requirement, in § 1201 (a)(2)(A) and (b)(1)(A), is that the main purpose of the service be to circumvent a measure that effectively controls access to the work.  This could have a  knowledge element, requiring the defendant to know that the changes he was making would give access to works that were previously not accessible.  But knowing you’re getting access to something you couldn’t access before is not the same as knowing you are breaking the law.  So our knowledge of committing a crime being an element isn’t here.
-- NOTE: There’s a number of elements within this each Subsection.  I am only looking at potential knowledge elements.  For a great in-depth look at each element of the crime, see this post on bunnie studios by someone who was called as an expert witness in this case. --

Subsections (B)

The next subsection, (a)(2)(B) and (b)(1)(B), requires that any commercially significant purposes aside from allowing access to previously restricted items are limited.  No knowledge element there.

Subsections (C)

The last subsection requires that the service be marketed for use in circumventing a TPM.  This requires the same sort of knowledge element as subsection (A), the knowledge that the service is providing access to restricted works.  Again, there doesn’t appear to be anything suggesting that in order to violate this law the person circumventing the TPM needs to know that circumventing TPM is illegal.

So Where’s the Knowledge

Is there a knowledge element elsewhere in the DMCA or in the US Copyright Act that applies to this section?  What am I missing?  Do any of our readers have an idea why the judge would require the prosecution to prove that the defendant knew he was breaking the law?

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".

Substantial 'a difficult word' says Court of Appeal

Gilham v R [2009] EWCA Crim 2293, 9 November 2009, is a decision of the Criminal Division of the Court of Appeal, England and Wales (Stanley Burnton LJ, Penry Davey and Sharpe JJ). Put simply, between October 2003 and January 2006 Gilham ran a business selling components and devices for games consoles marketed by Microsoft, Nintendo and Sony. Those companies used protective technological measures to prevent counterfeit or 'pirate' copies of games from being played on their consoles. Gilham sold modification chips (modchips), either by themselves or pre-inserted into games consoles together with the equipment needed to fit them. In some cases, a purchaser would have had to download software and install it.

Once installed, the modchips enabled counterfeit games to be played on the consoles. The running of the games had the following effect: during the playing of DVDs and CD-ROMs on which games were sold for use with the games consoles, data was transferred from the disk into the console's random access memory (RAM). At the point at which the game was played, the data in the RAM was overwritten by different data from the disk. The screen would display images of scenes, characters and objects which had been created by those responsible for the composition of the game.

Gilham was charged with offences arising out of his dealing with modchips. According to the prosecution, the modchips were devices, products or components which were primarily designed, produced or adapted for the purpose of enabling or facilitating the circumvention of effective technological measures within the meaning of section 296ZB of the Copyright, Designs and Patents Act 1988 as amended. He was also charged with money-laundering offences relating to the proceeds of sale.

In order for the prosecution to prove an offence contrary to eg section 296ZB(c)(i), it had to prove that (i) the game was, or was included in, a copyright-protected literary work; (ii) the playing of a counterfeit DVD on a games console involved the copying of such a work; (iii) such copying was of the whole or a substantial part of the work; (iv) the games console and/or genuine DVDs (ie copies of the copyright work or works created by or with the licence of the owner of the copyright) included effective technological measures within the meaning of section 296ZF which were designed to protect those works and (v) Gilham, in the course of business, had sold or let for hire a device, product or component which was primarily designed, produced or adapted for the purpose of enabling or facilitating the technological measures.

Convicted, Gilham appealed. The matter before the Court of Appeal was whether the playing of a counterfeit DVD involved substantial copying of a copyright work. According to Gilham, the trial judge had wrongly directed the jury as to the meaning of 'substantial', arguing that a display on a screen could not be a substantial copy of a copyright work.

The Court of Appeal dismissed Gilham's appeal, holding as follows:

* 'Substantial' was a difficult word to pin down. It could mean 'not insubstantial' or 'of ample or considerable amount, quantity of dimensions'.

* The key issue was whether, in creating Gilham's work, substantial use had been made of the skill and labour which had gone into the creation of the copyright work and thus of those features which made it an original work.

* The quality or importance of what had been taken was much more important than the quantity: it depended therefore not just on the physical amount taken but on its substantial significance or importance to the copyright work, so that the quality or importance of the part was frequently more significant than the proportion which the borrowed part bore to the whole.

* The recitals to Directive 2001/29 on the harmonisation of certain aspects of copyright and related rights in the information society emphasised the importance of protecting copyright and related rights in multimedia products such as computer games. Accordingly, if devices such as modchips could be sold with impunity, the United Kingdom would not be conferring the protection of those rights required by the Directive.

* It also accorded with common sense to say that a person who played a counterfeit DVD on his games console, and saw and heard the visions and sounds which were the subject of copyright, did make a copy of at least a substantial part of the game.

* In this case the game as a whole was not the sole subject of copyright; rather, the various drawings which resulted in the images shown on the screen or monitor were themselves artistic works protected by copyright. The images shown on the screen were copies, and substantial copies, of those works.

* Even if the contents of the RAM at any one time were not a substantial copy, the image displayed on screen was: what was shown on-screen when the pause button on a game console was pressed was a still image, a copy of an artistic work, generated by the digital data in the RAM. The fact that players did not normally pause the game was immaterial, since it was sufficient that a transient copy was made.

* On the basis of the foregoing, Gilham was rightly convicted of the offences charged under the Act and of the money laundering offences relating to the proceeds of his sales.

At paragraph 30 the Court added this comment:

" ... we repeat with emphasis what Jacob LJ said in Higgs about the trial of cases involving recondite issues of copyright law before a jury. Cases that, for example, involve determination of difficult questions whether a copy is of a substantial part of a copyright work, can and should be tried in the Chancery Division before specialist judges. They can be so tried much more efficiently in terms of cost and time than before a jury, and questions of law can if necessary be determined on appeal on the basis of clear findings of fact. In appropriate cases, the Court will grant injunctive relief, and a breach of an injunction will lead to punishment for contempt of court. If the facts proven against a defendant show that he has substantially profited from criminal conduct, proceedings for the civil recovery of the proceeds of his crimes may be brought under Part 5 of the Proceeds of Crime Act 2002".

A crime to buy pirate DVDs -- does Maharashtra have the power?

In a post on the excellent Spicy IP weblog, Prashant Reddy ("Beware Mumbaikars: The Slumlord's Act could detain you for a year for simply buying a pirated DVD") discusses provisions enacted by the Western Indian state of Maharashtra  -- which includes copyright-rich Mumbai -- that render not only the sale of pirate product a criminal offence but also the purchase of those items. After discussing whether the amended Copyright Act 1957 as amended already makes provision to the same effect, given the generous definition of "computer programme" under s.2 of that Act which may well cover the sophisticated modern DVD, he then asks whether India's states have power to legislate over copyright:

"...   the law related to copyright and other intellectual property is a subject of the Union List which means that only [India's] Parliament is competent to pass such a legislation in regards pirated DVDs. The State may try to argue that the pith and substance of the legislation is actually in regards 'law and order' which falls under the State List but I think that will be quite a weak argument ...".

This recalls distant memories of the Federal preemption rulings of the US Supreme Court in Sears, Roebuck v Stiffel and Compco v Day-Brite-- but those rulings dealt with the preemption of state power to prevent the copying of subject matter that Congress chose not to protect under Federal IP laws. Here, the "weak argument" of legislation to enforce law and order may carry the day on grounds of efficacy, whatever the merits of the pure legality of the situation.