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Friday, 6 November 2009

Friday Guest Blog: File-sharing, crack down or back down?

Government’s Tough Stance On File-Sharing To Be Moderated
by Steve Kuncewicz, IP & Media Lawyer at Ralli Solicitors

In the latest twist in the ongoing battle between Musicians, the Entertainment Industry, Internet Service Providers, the Government and the General Public, Culture Secretary Ben Bradshaw announcement that the Government’s highly controversial and heavily criticised initiative to tackle illegal downloading by cutting off internet access to file-sharers will be ‘moderated’ in the light of massive public opposition.

The Business Secretary Lord Mandelson announced a number of measures to deal with file-sharing in August this year, amongst which were proposals that ISPs should split the cost of protecting copyright on the web and, most controversially, to either slow down access or cut off persistent file-sharers from the internet as a 'weapon of last resort.' The new approach, however, confirms that a Court Order will be needed before the use of disconnection as a 'weapon of last resort,' which in itself would be made subject to a two-stage process, and emphasises a right to appeal so that web users are not disconnected on the basis of a 'mere accusation.'

This is a pretty big climb down for the Government on what looks as if it will become a major issue at the next election and this may well be what has forced their hand. A recent YouGov poll commissioned by the Open Rights Group showed that only 16% of those questioned supported cutting file-sharers off from the web and that over 70% would not support disconnection. This came after TalkTalk, one of the country’s biggest Internet Service Providers, successfully showed last week that a high percentage of household Wi-Fi broadband connections can be “hacked” by third parties to allow them to be used to illegally download without the owner’s knowledge and described the current proposals as “naïve” and “lacking a presumption of innocence.”

They have a point, and although many may view Talk Talk’s actions as a PR stunt, what they have done is highlight a very real problem with the previous approach – ISPs, if asked to hand over information on who is using their network to file-share, will not necessarily be able to tell exactly who is downloading – there is every possibility that several members of a household may use one connection to the Web, as well as hackers using their connection without their knowledge. This may mean that prosecutions or civil actions may be much more complicated and therefore more costly, especially as software tools to identify users are not a reliable as they could be. Virgin ran into this problem last year when they sent out letters to various users which they suspected of using peer-to-peer services only to be told that the recipients had no idea who was responsible. Not only that, but new methods of file-sharing, such as iPod ripping, don’t actually use an internet connection. The chances are that technology will simply be too slow to keep up with them.

File-sharing became an issue in mainstream politics after intense lobbying from the Entertainment Industry to do something about the problem, which is now having a huge impact upon CD and DVD sales, rather than being an excuse for the Government to regulate for the sake of it. It’s been estimated that there are over 7 million file-sharers in the UK and the Entertainment Industry, as well as some of the artists themselves, has been campaigning for either the Government or ISPs to intervene on their behalf to cut down the traffic in illegal files against claims that music piracy is severely limiting their ability to launch new artists and promote existing acts. ISPs say it isn’t their responsibility and the Government isn’t sure how to deal with theirs.

The black letter of the law remains the same: if you copy an MP3 from the web without permission from its owner, you will infringe copyright. Copyright is hugely important to the music industry as it is the main protection for an artist’s work and the main way in which record companies make money. It protects music as soon as it is recorded, and the copyright in a song or entire album belongs to either the Band or their label, giving them the right to control if and when their music is copied and made available to the public as well as allowing them to charge fees for doing so, which, so the theory goes, would encourage other artists to carry on making new music.

However, the law has not been able to keep up with the pace of technology. In the 80s, many LPs carried a piracy warning that 'Home Taping Is Killing Music' as cassette recorders allowed copies of albums to be made and handed out without any control by the Music Industry under the fear that LP sales would fall if people stopped buying LPs that their friends copied for them, which they did. We are in an even worse situation now as the Music Industry is terrified of the impact that illegal downloading is having upon CD sales.

The public seems genuinely confused over exactly what copyright protects. Not only that, but the law itself is confused – technically speaking, downloading a CD to your iPod is also an infringement of copyright, although the issue of 'format shifting' is being looked at in some detail. Ad campaigns for the iPod would probably be very different if they carried a health warning that using them could land you in court.

So, where next? Pretty much everyone seems to agree that the issue of file-sharing needs to be dealt with, but the issue is already fiercely dividing opinion. Even the artists whose music is being downloaded can’t seem to agree upon what the approach should be, with Radiohead suggesting that downloading is on the rise due to an absence of good music on the radio and giving away their 'In Rainbows' album via free download. On the other hand, Lily Allen took a very public stand against downloaders, claiming that she won’t make any more albums due to the problem and that new acts are no longer being signed in the same numbers due to a lack of being able to make money from them.

Even though Allen and other high-profile musicians such as Annie Lennox and the members of the Featured Artists Coalition have put the case against downloading very eloquently and very publicly, other artists such as Shakira claim that what we’re actually seeing is a “democratisation of music”. That’s an interesting word to use, as other attempts to implement a “three strikes” system of cutting off downloaders within the EU have been derailed on the basis that cutting off access to the internet is, in fact, unconstitutional. The Digital Britain Report, as well as the Prime Minister, recognised that public access to the internet will be vital to the development of the new “knowledge economy”. The main change in approach will now be that a Judge decides when to cut off users rather than a government body.

There is also a real issue of public perception of copyright infringement as a victimless crime. Lily Allen has taken a lot of abuse due to the fact that, not only did her website contain copies of material by other artists without their permission in “mixtape” form, but she also “cut and pasted” one of her Blog posts on the issue. Add to that the fact that French President Nicolas Sarkozy, a key supporter of the tougher approach, was recently accused of “pirating” over 400 DVDs and it’s easy for public opinion to turn against an industry which produces massive wealth for its members.

However, a key development this weekend saw the European Parliament give the go-ahead for member states to cut off persistent offenders. This came about after an amendment to forthcoming telecommunications legislation, which would make this difficult without a court order, was dropped. The British Government’s latest proposals on how to deal with the problem are expected over the next month or so, but whatever the outcome, this debate will run and run and it remains only a matter of time before the Entertainment Industry takes action. So far, they’ve been reluctant (at least in the UK) to take action against their customers, but even though it will probably be a very expensive case which may lead to a commercial loss for the record company which brings proceedings (as whoever they sue may not be able to pay the Label’s legal costs and damages remain limited to what the actual price for the downloaded material would be), it’s probably only so long before the first real deterrent cases appear before the UK Court.

Whatever the case, just because the proposals have been watered down, the issue isn’t going to go away. Although it will remain difficult to do so, the threat of being cut off is still very real and still a very real flashpoint of public opinion. The only real way to deal with the problem remains education of the public as to what can and can’t be downloaded and to make as much material available for legal download as possible. With a few tweaks to its business model, the Entertainment Industry could truly embrace the new technology available and open up brand new revenue streams for their artists. Otherwise, the current stand-off will only get worse.

From offices in the heart of Manchester, Ralli are Solicitors specialising in Business Law, Intellectual Property & Media, Employment, Property, Fraud and Personal Injury. Call Ralli today on 0161 832 6131 or visit

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