Slipping through the net

It is increasingly easy, in the internet age, to infringe copyright without being identified or traced. It is progressively more difficult for copyright owners to protect their copyrighted material. Does the solution lie in the Digital Economy Act 2010?

The Digital Economy Act 2010 received Royal Assent in April 2010, a last gasp from the outgoing government. It aims to combat the infringement of copyrighted material on the internet by imposing obligations on internet service providers (ISPs) and increasing the penalties for copyright infringement (sections 3-16 of the Act; new sections 124A-M of the Communications Act 2003).

The Act requires secondary legislation and further guidance, which is embodied in a draft obligations code published by OFCOM entitled Online Infringement of Copyright and the Digital Economy Act 2010.

What then do these provisions envisage, and how effective are they likely to be?

Reporting for duty

Under the Act, ISPs must notify subscribers when they receive a report from an owner of copyrighted material regarding an infringement of its material. The owner's copyright infringement report (CIR) must contain certain specified information and be submitted within ten days of identifying the alleged infringement.

There is then a three-stage notification process between the ISP and the subscriber. On receiving the first CIR, the ISP must send the subscriber a notification setting out the information provided by the owner. The subscriber should also be warned that the ISP will retain the CIR for 12 months before destroying it and that third parties can request and obtain the information contained in it.

If another CIR is received more than one month after the first notification, the ISP must send the subscriber a second notification detailing the trigger CIR and any accumulated CIRs. A third notification must be sent if another CIR is received more than one month after the second notification but within a year of the first. At this point, the ISP must inform the subscriber that the owner is entitled to apply to court for an order disclosing the subscriber's identity, with a view to commencing proceedings.

Copyright hit list

If requested, ISPs are required to provide owners with anonymous copyright infringement lists of those subscribers against whom the owner has made at least one CIR and who have received three notifications within a 12-month period (irrespective of how many actual CIRs have been made against them).

OFCOM is also proposing that owners may only make one request for a CIL from an ISP in any three-month period and that ISPs must provide the CIL within five days of receipt. The code also sets out grounds for subscribers to appeal to an independent body.

Increased penalties

Section 42 of the Act imposes a new maximum fine of £50,000 on summary convictions for the copyright infringement offences set out in sections 107 (criminal liability for making or dealing with infringing articles) and 198 of the Copyright Designs and Patents Act (criminal liability for making, dealing with or using illicit recordings).

Big names

OFCOM proposes to limit these provisions to qualifying owners and ISPs. A 'qualifying owner' is an owner which provides an estimate of the CIRs it intends to make during a notification period (the financial year) two months in advance, and has paid its notification and qualifying costs for that period.

A 'qualifying ISP' is a fixed-line ISP with more than 400,000 subscribers '“ namely only the largest ISPs (BT, TalkTalk, VirginMedia, Sky, Orange, O2 and the Post Office) that provide internet access to more than 96 per cent of the market.

The right direction

The Act does not provide any overarching solution to the practical difficulties of protecting material from online infringement, but it does take some steps in the right direction.

The notification processes, together with new provisions entitling OFCOM to issue fines of up to £250,000 to defaulting ISPs, should ensure that ISPs based within this jurisdiction cooperate better with owners in monitoring and addressing infringements. However, these processes also mean that owners still face long delays in obtaining the information they need to protect their material. Moreover, the owners still have to apply to court for disclosure of the subscribers identity, and bear the cost of making such an application.

The Act also fails to address the problems caused by infringing parties who do not provide ISPs with correct details, or who use a proxy server or a virtual private network. Neither does it stop unscrupulous users from using free wifi access points, which would not be covered by the code, to download material '“ a trend which may well increase as a result of the Act.

It is not yet clear whether the Act and code, as currently drafted, will substantially reduce online infringement of copyrighted material. However, the code remains in draft form until at least January 2011, and there are two further consultations planned '“ on enforcement and settling industry disputes, and tariff setting '“ before the Act settles into its final format.