The Internet And Publishing Law :: Laurence Kaye

UCL CENTRE FOR PUBLISHING “THE INTERNET AND PUBLISHING LAW”

1 THE INTERNET AND PUBLISHING LAW 1.1 WEB 1.1.1 1.0 Web 1.0 --> Web 2.0 DoubleClick --> Google AdSense Britannica Online --> Wikipedia personal websites --> blogging domain name speculation --> search engine optimization publishing --> participation content management systems --> wikis directories (taxonomy) --> tagging ("folksonomy") Source: Tim O'Reilly, "What is Web 2.0" http://www.oreilly.com/pub/a/oreilly/tim/news/2005/09/30/what-is-web- 20.html

1.2 THE LEGAL IMPLICATIONS OF MAKING CONTENT AVAILABLE ON THE WEB 1.2.1 PUBLISHER LIABILITY Publishers on the internet face the same risks online as in traditional print, namely liability in the following areas: 

Copyright infringement

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Defamation

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Trade mark infringement

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Harassment

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Breach of confidence/privacy/human rights

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Contempt of court

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Obscenity

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Incitement to racial hatred

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Breach of industry regulations (advertising, etc)

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Data protection

Copyright Laurence Kaye Solicitors 2007. This handout can be used for non-commercial research by UCL students. Any commercial or other use requires our prior permission.

Page 2 October 2007

Under this general sub-heading of "Publisher Liability", we have focused on copyright and defamation laws as they present the main concerns for most online (and, indeed, traditional) publishers. We then go on to examine the above areas as they may apply to various different types of modern (or Web 2.0) website. Although categorised in this way, please bear in mind that the legislation we explore may apply to all types of publishing, whether online or otherwise.

1.2.1.1 COPYRIGHT INFRINGEMENT 1.2.1.1.1 Copyright, Designs and Patents Act 1988 1.2.1.1.1.1 Copyright Works

1.2.1.1.1.1.1 Literary, dramatic, musical, artistic 1.2.1.1.1.1.2 Sound recordings, films, broadcasts 1.2.1.1.1.1.3 Typographical arrangements of published editions 1.2.1.1.1.1.4 Databases 1.2.1.1.1.2 Infringing Acts

1.2.1.1.1.2.1 Reproduction Right (s.17 CDPA 1988) 17.(1) The copying of the work is an act restricted by the copyright in every description of copyright work; and references in this Part to copying and copies shall be construed as follows. (2) Copying in relation to a literary, dramatic, musical or artistic work means reproducing the work in any material form. This includes storing the work in any medium by electronic means... (4) Copying in relation to a film, television broadcast or cable programme includes making a photograph of the whole or any substantial part of any image forming part of the film, broadcast or cable programme. (5) Copying in relation to the typographical arrangement of a published edition means making a facsimile copy of the arrangement. (6) Copying in relation to any description of work includes the making of copies which are transient or are incidental to some other use of the work.

1.2.1.1.1.2.2 Communication to the Public Right (s.20 CDPA 1988) 20.(1) The communication to the public of the work is an act restricted by the copyright in: (a) a literary, dramatic, musical or artistic work, (b) a sound recording or film, or (c) a broadcast. (2) References in this Part to communication to the public are to communication to the public by electronic transmission, and in relation to a work include (a) the broadcasting of the work; (b) the making available to the public of the work by electronic transmission in such a way that members of the public may access it from a place and at a time individually chosen by them.

1.2.1.1.1.3 Permitted Acts

1.2.1.1.1.3.1 Making Temporary Copies (s.28A CDPA 1988) © Laurence Kaye Solicitors 2007. This handout can be used for non-commercial research or private study by UCL students only. Any commercial or other use needs our prior permission.

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28A. Copyright in a literary work, other than a computer programme or a database, or in a dramatic, musical or artistic work, the typographical arrangement of a published edition, a sound recording or a film, is not infringed by the making of a temporary copy which is transient or incidental, which is an integral and essential part of a technological process and the sole purpose of which is to enable (a) a transmission of the work in a network between third parties by an intermediary; or (b) a lawful use of the work; and which has no independent economic significance.

1.2.1.1.1.3.2 Research and Private Study (s.29 CDPA 1988) 29.(1) Fair dealing with a literary, dramatic, musical or artistic work for the purposes of research or private study does not infringe any copyright in the work or, in the case of a published edition, in the typographical arrangement. (2) Fair dealing with the typographical arrangement of a published edition for the purposes mentioned in subsection (1) does not infringe any copyright in the arrangement. (3) Copying by a person other than the researcher or student himself is not fair dealing if— (a) in the case of a librarian, or a person acting on behalf of a librarian, he does anything which regulations under section 40 would not permit to be done under section 38 or 39 (articles or parts of published works: restriction on multiple copies of same material), or (b) in any other case, the person doing the copying knows or has reason to believe that it will result in copies of substantially the same material being provided to more than one person at substantially the same time and for substantially the same purpose.

1.2.1.1.1.3.3 Criticism, Review and News Reporting (s.30 CDPA 1988) 30. (1) Fair dealing with a work for the purpose of criticism or review, of that or another work or of a performance of a work, does not infringe any copyright in the work provided that it is accompanied by a sufficient acknowledgement. (2) Fair dealing with a work (other than a photograph) for the purpose of reporting current events does not infringe any copyright in the work provided that (subject to subsection (3)) it is accompanied by a sufficient acknowledgement. (3) No acknowledgement is required in connection with the reporting of current events by means of a sound recording, film, broadcast or cable programme.

1.2.1.1.1.3.4 Incidental Inclusion of Copyright Material (s.31 CDPA 1988) 31. (1) Copyright in a work is not infringed by its incidental inclusion in an artistic work, sound recording, film, broadcast or cable programme. (2) Nor is the copyright infringed by the issue to the public of copies, or the playing, showing, broadcasting or inclusion in a cable programme service, of anything whose making was, by virtue of subsection (1), not an infringement of the copyright. (3) A musical work, words spoken or sung with music, or so much of a sound recording, broadcast or cable programme as includes a musical work or such words, shall not be regarded as incidentally included in another work if it is deliberately included.

1.2.1.1.2 Shetland Times v Shetland News This case illustrates the new role of copyright law in the online environment. The claimant's website contained news items. The defendant copied the claimant's headlines and displayed them on its own website, along with links to the articles on the claimant's website. The claimant claimed such use infringed its copyright. The damage suffered by the claimant was the reduced amount of users accessing the articles via the claimant's own website, leading to a reduction in the value of the site for advertising purposes. The case settled out of court, with the defendant attributing the source of the articles on its website. © Laurence Kaye Solicitors 2007. This handout can be used for non-commercial research or private study by UCL students only. Any commercial or other use needs our prior permission.

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1.2.1.1.3 Napster Litigation US litigation where Napster, a free file sharing site, was found liable and closed down for facilitating copyright infringement.

1.2.1.2 DEFAMATION 1.2.1.2.1 Defamation Act 1996 1.2.1.2.1.1 Infringing Act

1.2.1.2.1.1.1 Publication 1.2.1.2.1.1.2 Defamatory Statement 1.2.1.2.1.1.3 Referring to the Claimant 1.2.1.2.1.2 Defences

1.2.1.2.1.2.1 s.1 DA 1996 Defence for the "operator of or provider of access to a communications system by means of which the defamatory statement is transmitted or made available, by a person over whom he has no effective control", provided that: s.1(1)(b) - the defendant took reasonable care in relation to the publication of defamatory statements; and s.1(1)(c) - the defendant did not know, and had no reason to believe, that his actions caused or contributed to the publication of such a statement s.1(6) provides guidance in stating that in applying the above test, regard shall be had to: (a) the extent of the defendant's responsibility for the content of the statement or the decision to publish it (b) the nature or circumstances of the publication (c) the previous conduct or character of the defendant

1.2.1.2.1.2.2 Electronic Commerce (EC Directive) Regulations 2002 Refer to ISP liability below for further detail

1.2.1.2.2 Godfrey v Demon Internet This case was the first concerning defamation on the internet in the UK. A posting defamatory of the claimant was displayed on a newsgroup controlled by the defendant, an ISP (see below for further discussion on ISP liability). The defendant sought to rely on the defence in s.1 DA 1996 (see above). The court held that the defence was not available to the defendant. This was partly because the claimant had informed it of the defamatory posting but it had neglected to remove it. This case was alarming for the ISPs as it placed the burden on them to decide whether material on a website they host is defamatory. If so, they are obliged to remove it immediately in order to avoid liability.

1.2.1.2.3 Loutchansky v Times Newspapers This case mainly concerned online archives and raised the question - "To what extent is an online publisher held liable for defamatory material in archived stories?" The Times published an article which was defamatory of the claimant and, as the Times was found to have breached the standards of responsible journalism, no defence was available to it. The claimant subsequently filed a separate claim regarding the fact that the defamatory article remained in timesonline's archive. It was held that: © Laurence Kaye Solicitors 2007. This handout can be used for non-commercial research or private study by UCL students only. Any commercial or other use needs our prior permission.

Page 5 October 2007

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Online publishers must ensure they take care to manage their online archives "responsibly"

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This means that where a story is (or might be) defamatory, an appropriate warning must be attached to it when made available in an online archive.

1.2.2 USER GENERATED CONTENT User generated content (UGC) features largely in the Web 2.0 environment. It increases the risk of liability in the following areas because there is no editorial control over the content and it is published online without consideration of the applicable legislation. The traditional publishing model (one to many) meant that in-house legal teams and experienced publishers recognised and minimised the legal risks associated with publishing certain content. However, in the emerging publishing model (many to many), anybody can easily publish online any content without the knowledge or concern that such content may be unlawful. As such, although the following legal risks are equally applicable to all types of publishing, it is in the online world of UGC that they are most acute.

1.2.2.1 BLOG SPECIFIC ISSUES/CASES 1.2.2.1.1 Employee Misconduct The following issues arise in relation to employees and their personal blogs: 

If there is a connection between the personal blog and the blogger's work, in certain circumstances, the employer may be held liable for the content of its employee's personal blog.

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The employee may publish material on a personal blog which could bring the company into disrepute. This could lead to disciplinary proceedings and an action against the employee for breach of employment contract and/or gross misconduct. For examples, google "La Petite Anglaise" and "Bastardstones."

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The employee may publish trade secrets or confidential information on the personal blog, which could also lead to disciplinary proceedings and an action against the employee for breach of employment contract and/or gross misconduct.

1.2.2.1.2 Corporate Blogs The following problems may arise from corporate blogs: 

Defamatory material being posted on the blog, for example if the blogger is posting entries about the company's rivals.

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Negative PR could result from careless blogging, especially if the posts hint at low employee morale or management problems.

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Confidential information may be revealed by a careless blogger, perhaps affecting the value of the company.

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A blogger could hint at the company's future plans and result in accusations of insider dealing.

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Copyright and trade mark infringement are common risks.

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A careless joke could provoke a sexual or racial harassment claim.

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Breach of professional conduct codes.

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Misrepresentation/negligent misstatement.

1.2.2.1.3 Defamation There is a fine line for bloggers to tread between freedom of expression and defamation. Follow the hyperlink for an example of a US case in which one individual sued another individual on the grounds of defamation. The claimant was awarded $11m but the defendant couldn't pay so the claimant was simply left with court costs. It seems the claimant was prepared to do whatever it took, despite the cost, as a matter of principle, to win the defamation case. © Laurence Kaye Solicitors 2007. This handout can be used for non-commercial research or private study by UCL students only. Any commercial or other use needs our prior permission.

Page 6 October 2007

1.2.2.1.3.1 Gina Ford v Mumsnet The defendant was the provider of an online social forum for mothers. Several postings appeared on the site which were defamatory of the claimant, an author on childcare matters. Instead of suing the individals posting the defamatory comments, the claimant sued the platform hosting the forum. The defendant sought to rely on the exemptions for ISPs in the E-Commerce Directive (detailed below). However, the case settled out of court with the defendant removing the offensive posts.

1.2.2.1.3.2 Michael Keith-Smith v Williams This case is important as it illustrates that individual bloggers can be liable for defamatory postings. The claimant obtained a court order requiring the site operator to reveal the defendant's identity.

1.2.2.2 SOCIAL NETWORKING/WIKI SPECIFIC ISSUES 1.2.2.2.1 COPYRIGHT INFRINGEMENT YouTube has recently agreed a royalty deal with the UK collecting society, the MCPS-PRS Alliance. This will allow it to continue to feature over 10 million songs on the website without infringing copyright laws. Is this type of collective licence the answer? Will other countries/industries/ISPs follow suit? Watch this space. Especially keep an eye on whether the big studios (e.g. Universal, WB) reach deals with YouTube/MySpace, etc on an individual basis.

1.2.2.2.2 DEFAMATION / HARASSMENT The Protection from Harassment Act 1997 was originally intended to protect individuals from stalkers. However, it can also apply in an online environment and is a consideration for all publishers. The growth of UGC makes the risk of liability under this Act more acute. The approach a publisher should adopt is to consider whether a proposed publication that was likely to cause distress to an individual would amount to an abuse of the freedom of the press. An example of this in an online environment is the recent warning from Keele University to its students that disparaging comments about the university's staff posted on social networking sites such as My Space and YouTube may result in disciplinary action. This is because such postings may constitute harassment and/or defamation.

1.2.2.2.3 BREACH OF CONFIDENCE / PRIVACY Confidence Coco v Clarke [1968] Criteria for an action in breach of confidence: 1 - The information has the necessary quality of confidence; 2 - The information has been imparted in circumstances importing an obligation of confidence; and 3 - there is an unauthorised use of the information to the detriment of the original communicator of the information. Privacy Campbell v MGN Theakston v MGN Von Hannover v Germany Douglas v Hello! McKennitt v Ash Human Rights Act 1998 © Laurence Kaye Solicitors 2007. This handout can be used for non-commercial research or private study by UCL students only. Any commercial or other use needs our prior permission.

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Article 8 - Right to respect for private and family life 1. Everyone has the right to respect for his private and family life, his home and his correspondence. 2. There shall be no interference by a public authority with the exercise of this right except such as in accordance with the law and is necessary in a democratic society in the interests of national security, public safety or the economic well-being of the country, for the prevention of disorder or crime, for the protection of health or morals, or for the protection of rights and freedoms of others. Article 10 - Right to freedom of expression 1. Everyone has the right to freedom of expression. This right shall include freedom to hold opinions and to receive and impart information and ideas without interference by public authority and regardless of frontiers. 2. The exercise of these freedoms, since it carries with it duties and responsibilities, may be subject to such formalities, conditions, restrictions or penalties as are prescribed by law and are necessary in a democratic society, in the interests of national security, territorial integrity or public safety, for the prevention of disorder or crime, for the protection of health or morals, for the protection of the reputation or rights of others, for preventing the disclosure of information received in confidence or for maintiaining the authority and impartiality of the judiciary.

1.2.2.2.4 CRIMINAL 1.2.2.2.4.1 OBSCENITY The Obscene Publications Act 1959 s.2 states that it is an offence to publish an obscene article whether or not for gain. Whether an article is obscene or not depends on the following factors: 

Who is likely to read, see or hear the article?

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Will a more than negligible number of that likely audience tend to be morally depraved or corrupted by the article?

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Is the article so repulsive that it is likely to discourage such behaviour?

Defences 

s.4 - Publication is in the public good

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s.2(5) - Innocent dissemination (the publisher had not examined the article and had no reasonable cause to suspect that it was obscene under the Act)

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Aversion = where the article has the effect of discouraging the audience from engaging in the activity in question so that it does not "tend to deprave or corrupt" them it is not obscene.

1.2.2.2.4.2 CHILD PORNOGRAPHY Indecency with Children Act 1960 s.1(1) - "Any person who commits an act of gross indecency with or towards a child under the age of fourteen, or who incites a child under that age to commit such an act with him or another shall [commit an offence]" Protection of Children Act 1978 s.1 - It is an offence: "(a) to take, or permit to be taken, any indecent photograph of a child; or (b) to distribute or show such indecent photographs; or (c) for a person to have in his possession such indecent photographs, with a view to them being distributed or shown by himself or others; or (d) to publish or cause to be published any advertisement likely to be understood as conveying that the advertiser distributes or shows such indecent photographs, or intends to do so."

1.2.2.2.4.3 INCITEMENT TO RACIAL HATRED © Laurence Kaye Solicitors 2007. This handout can be used for non-commercial research or private study by UCL students only. Any commercial or other use needs our prior permission.

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Public Order Act 1986 s.17 - Definition of racial hatred "hatred against a group of persons in Great Britain defined by reference to colour, race, nationality (including citizenship) or ethnic or national origins." Offences s.18 - It is an offence to use threatening, abusive or insulting words or behaviour, or to display any written material which is threatening, abusive or insulting. s.19 - It is an offence to publish or distribute written material which is threatening, abusive or insulting. s.21 - It is an offence to distribute or show or play a recording of visual images or sounds which are threatening, abusive or insulting. The above become offences if the following is shown: (a) he (the publisher) intends thereby to stir up racial hatred, or (b) having regard to all the circumstances racial hatred is likely to be stirred up thereby. Defences s.18 - The defendant did not intend his words or behaviour to be, and was not aware that it might be, threatening, abusive or insulting. s.19 - The defendant was not aware of the content of the material and had no reason to believe that it was threatening, abusive or insulting. s.21 - The defendant was not aware of the content of the recording, and did not suspect that it was threatening, abusive or insulting.

1.2.2.2.4.4 CONTEMPT OF COURT The Contempt of Court Act 1981 

Publication addressed to the public or a section of the public

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which creates a substantial risk

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that the course of justice in particular "active" legal proceedings

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will be seriously impeded or prejudiced

1.2.3 INTERNET SERVICE PROVIDERS Internet service providers (ISPs) are mostly targeted in lawsuits relating to online publishing. That is because they have some level of control over the content they make available over the internet. Also, they have "deep pockets" and are easily identifiable, whereas "libellousgirl52" may be penniless and difficult to trace to an individual capable of being sued (rather than an online persona). Various exemptions have been included in the legislation to protect ISPs from overly onerous liability. However, case law is still developing to determine the extent of ISP liability in order to find the right balance. As such, this issue is far from straightforward.

1.2.3.1 WHAT IS AN ISP? The Directives and Regulations refer to certain exemptions (as detailed above) for ISPs. But as the internet has changed shape and developed and there are more players offering various levels of service, there is a grey area in terms of what constitutes an ISP for the purposes of the legislation.

1.2.3.1.1 "Traditional" Internet Service Provider (e.g. Tiscali, Virgin Media, Demon Internet)

1.2.3.1.2 Hosts and Platforms © Laurence Kaye Solicitors 2007. This handout can be used for non-commercial research or private study by UCL students only. Any commercial or other use needs our prior permission.

Page 9 October 2007

1.2.3.1.2.1 Social Networking - (e.g. My Space, YouTube) 1.2.3.1.2.2 Auction Sites - (e.g. eBay) 1.2.3.1.2.3 Peer-to-Peer (P2P) - (e.g. Kazaa, Grokster) 1.2.3.1.2.4 Community Pages - (e.g. Gumtree, Rollonfriday) 1.2.3.1.2.5 Dating Websites - (e.g. Parship, Match.com) 1.2.3.1.2.6 E-tailers - (e.g. Amazon, Lastminute.com)

1.2.3.1.3 Wikis (e.g. Wikipedia, Wikihow)

1.2.3.1.4 Search Engines (e.g. Google, Yahoo, Lycos)

1.2.3.1.5 Facilitators (e.g. Paypal)

1.2.3.2 "ISP" LIABILITY This subheading sets out the law relating to ISPs, as defined in the E- Commerce Directive and the Copyright Directive. Such definition predates the explosion of Web 2.0 and associated hosts/platforms, etc, as detailed below. As such, although the law is clear as to the exemptions available for ISPs, it is not clear whether new types of hosts/platforms, etc, can class themselves as ISPs and claim the exemptions. In the E-Comerce Directive, ISPs are defined as: "information society services": services within the meaning of Article 1(2) of Directive 98/34/EC as amended by Directive 98/48/EC; "service provider": any natural or legal person providing an information society service; "established service provider": a service provider who effectively pursues an economic activity using a fixed establishment for an indefinite period. The presence and use of the technical means and technologies required to provide the service do not, in themselves, constitute an establishment of the provider; In the Electronic Commerce (EC Directive) Regulations 2002, ISPs are defined as: ―established service provider‖ means a service provider who is a national of a member State or a company or firm as mentioned in Article 48 of the Treaty and who effectively pursues an economic activity by virtue of which he is a service provider using a fixed establishment in a member State for an indefinite period, but the presence and use of the technical means and technologies required to provide the information society service do not, in themselves, constitute an establishment of the provider; in cases where it cannot be determined from which of a number of places of establishment a given service is provided, that service is to be regarded as provided from the place of establishment where the provider has the centre of his activities relating to that service; references to a service provider being established or to the establishment of a service provider shall be construed accordingly; ―information society services‖ (which is summarised in recital 17 of the Directive as covering ―any service normally provided for remuneration, at a distance, by means of electronic equipment for the processing (including digital compression) and storage of data, and at the individual request of a recipient of a service‖) has the meaning set out in Article 2(a) of the Directive, (which refers to Article 1(2) of Directive 98/34/EC of the European Parliament and of the Council of 22 June 1998 laying down a procedure for the provision of information in the field of technical standards and regulations(c), as amended by Directive 98/48/EC of 20 July 1998(d)); ―member State‖ includes a State which is a contracting party to the EEA ―service provider‖ means any person providing an information society service © Laurence Kaye Solicitors 2007. This handout can be used for non-commercial research or private study by UCL students only. Any commercial or other use needs our prior permission.

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1.2.3.2.1 E-Commerce Directive 1.2.3.2.1.1 No obligation to monitor Article 15 - No general obligation to monitor 1. Member States shall not impose a general obligation on providers, when providing the services covered by Articles 12, 13 and 14, to monitor the information which they transmit or store, nor a general obligation actively to seek facts or circumstances indicating illegal activity. 2. Member States may establish obligations for information society service providers promptly to inform the competent public authorities of alleged illegal activities undertaken or information provided by recipients of their service or obligations to communicate to the competent authorities, at their request, information enabling the identification of recipients of their service with whom they have storage agreements.

1.2.3.2.1.2 Mere conduit Article 12 - Mere conduit 1. Where an information society service is provided that consists of the transmission in a communication network of information provided by a recipient of the service, or the provision of access to a communication network, Member States shall ensure that the service provider is not liable for the information transmitted, on condition that the provider: (a) does not initiate the transmission; (b) does not select the receiver of the transmission; and (c) does not select or modify the information contained in the transmission. 2. The acts of transmission and of provision of access referred to in paragraph 1 include the automatic, intermediate and transient storage of the information transmitted in so far as this takes place for the sole purpose of carrying out the transmission in the communication network, and provided that the information is not stored for any period longer than is reasonably necessary for the transmission. 3. This Article shall not affect the possibility for a court or administrative authority, in accordance with Member States' legal systems, of requiring the service provider to terminate or prevent an infringement.

1.2.3.2.1.3 Caching Article 13 - Caching 1. Where an information society service is provided that consists of the transmission in a communication network of information provided by a recipient of the service, Member States shall ensure that the service provider is not liable for the automatic, intermediate and temporary storage of that information, performed for the sole purpose of making more efficient the information's onward transmission to other recipients of the service upon their request, on condition that: (a) the provider does not modify the information; (b) the provider complies with conditions on access to the information; (c) the provider complies with rules regarding the updating of the information, specified in a manner widely recognised and used by industry; (d) the provider does not interfere with the lawful use of technology, widely recognised and used by industry, to obtain data on the use of the information; and (e) the provider acts expeditiously to remove or to disable access to the information it has stored upon obtaining actual knowledge of the fact that the information at the initial source of the transmission has been removed from the network, or access to it has been disabled, or that a court or an administrative authority has ordered such removal or disablement. 2. This Article shall not affect the possibility for a court or administrative authority, in accordance with Member States' legal systems, of requiring the service provider to terminate or prevent an infringement.

1.2.3.2.1.4 Hosting Article 14 - Hosting © Laurence Kaye Solicitors 2007. This handout can be used for non-commercial research or private study by UCL students only. Any commercial or other use needs our prior permission.

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1. Where an information society service is provided that consists of the storage of information provided by a recipient of the service, Member States shall ensure that the service provider is not liable for the information stored at the request of a recipient of the service, on condition that: (a) the provider does not have actual knowledge of illegal activity or information and, as regards claims for damages, is not aware of facts or circumstances from which the illegal activity or information is apparent; or (b) the provider, upon obtaining such knowledge or awareness, acts expeditiously to remove or to disable access to the information. 2. Paragraph 1 shall not apply when the recipient of the service is acting under the authority or the control of the provider. 3. This Article shall not affect the possibility for a court or administrative authority, in accordance with Member States' legal systems, of requiring the service provider to terminate or prevent an infringement, nor does it affect the possibility for Member States of establishing procedures governing the removal or disabling of access to information.

1.2.3.2.2 The Electronic Commerce (EC Directive) Regulations 2002 1.2.3.2.2.1 No obligation to monitor Notice for the purposes of actual knowledge 22. In determining whether a service provider has actual knowledge for the purposes of regulations 18(b)(v) and 19(a)(i), a court shall take into account all matters which appear to it in the particular circumstances to be relevant and, among other things, shall have regard to— (a) whether a service provider has received a notice through a means of contact made available in accordance with regulation 6(1)(c), and (b) the extent to which any notice includes— (i) the full name and address of the sender of the notice; (ii) details of the location of the information in question; and (iii) details of the unlawful nature of the activity or information in question.

1.2.3.2.2.2 Mere conduit 17.—(1) Where an information society service is provided which consists of the transmission in a communication network of information provided by a recipient of the service or the provision of access to a communication network, the service provider (if he otherwise would) shall not be liable for damages or for any other pecuniary remedy or for any criminal sanction as a result of that transmission where the service provider— (a) did not initiate the transmission; (b) did not select the receiver of the transmission; and (c) did not select or modify the information contained in the transmission. (2) The acts of transmission and of provision of access referred to in paragraph (1) include the automatic, intermediate and transient storage of the information transmitted where: (a) this takes place for the sole purpose of carrying out the transmission in the communication network, and (b) the information is not stored for any period longer than is reasonably necessary for the transmission.

1.2.3.2.2.3 Caching 18. Where an information society service is provided which consists of the transmission in a communication network of information provided by a recipient of the service, the service provider (if he otherwise would) shall not be liable for damages or for any other pecuniary remedy or for any criminal sanction as a result of that transmission where—

© Laurence Kaye Solicitors 2007. This handout can be used for non-commercial research or private study by UCL students only. Any commercial or other use needs our prior permission.

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(a) the information is the subject of automatic, intermediate and temporary storage where that storage is for the sole purpose of making more efficient onward transmission of the information to other recipients of the service upon their request, and (b) the service provider— (i) does not modify the information; (ii) complies with conditions on access to the information; (iii) complies with any rules regarding the updating of the information, specified in a manner widely recognised and used by industry; (iv) does not interfere with the lawful use of technology, widely recognised and used by industry, to obtain data on the use of the information; and (v) acts expeditiously to remove or to disable access to the information he has stored upon obtaining actual knowledge of the fact that the information at the initial source of the transmission has been removed from the network, or access to it has been disabled, or that a court or an administrative authority has ordered such removal or disablement.

1.2.3.2.2.4 Hosting 19. Where an information society service is provided which consists of the storage of information provided by a recipient of the service, the service provider (if he otherwise would) shall not be liable for damages or for any other pecuniary remedy or for any criminal sanction as a result of that storage where— (a) the service provider— (i) does not have actual knowledge of unlawful activity or information and, where a claim for damages is made, is not aware of facts or circumstances from which it would have been apparent to the service provider that the activity or information was unlawful; or (ii) upon obtaining such knowledge or awareness, acts expeditiously to remove or to disable access to the information, and (b) the recipient of the service was not acting under the authority or the control of the service provider.

1.2.3.2.3 Copyright Directive Article 5 - Exceptions and limitations 1. Temporary acts of reproduction referred to in Article 2, which are transient or incidental [and] an integral and essential part of a technological process and whose sole purpose is to enable: (a) a transmission in a network between third parties by an intermediary, or (b) a lawful use of a work or other subject-matter to be made, and which have no independent economic significance, shall be exempted from the reproduction right provided for in Article 2.

1.2.3.2.4 Case Law 1.2.3.2.4.1 COPYRIGHT INFRINGEMENT

1.2.3.2.4.1.1 SABAM v Scarlet (Belgium) ISPs should be concerned about the recent decision of the Belgian Court of First Instance in SABAM v Scarlet. If the ruling remains uncontested, it will set a precedent dramatically increasing responsibility for copyright infringement by ISPs. The case hinged on expert advice regarding the technical feasibility of blocking copyright infringing material. The existence of such technologies convinced the judge that ISPs are under a duty to employ them as antiinfringement methods. The court accordingly ordered Scarlet to implement the technical copyright protection measures within 6 months, under threat of a €2,500 penalty for each day of non-compliance thereafter. © Laurence Kaye Solicitors 2007. This handout can be used for non-commercial research or private study by UCL students only. Any commercial or other use needs our prior permission.

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The ruling shook the established view on liability of ISPs for copyright infringement, which was, in short, that ISPs are effectively immune from liability as long as they made no effort to monitor and control activities via their servers. Technological developments since the E-Commerce Directive effectively alter the parameters for attributing constructive knowledge to ISPs and, subsequently, their level of complicity in infringements. It is clear that ISPs now have the technical means to prevent the wide- scale copyright infringement associated with such activities as P2P file sharing… but the burning question is ―does it have the legal responsibility to install it?‖ The decision in SABAM v Scarlet should be making ISPs anxious. However, it is open to challenge as this new technology is not anticipated in the drafting of the Copyright Directive and the E-Commerce Directive and the new position is far from clear. Either way, this case will be significant as confirmation that ISPs are not liable for content on their servers so long as they ―turn a blind eye‖ and exercise no control over them…or as the beginning of a new trend towards greater responsibility and accountability.

1.2.3.2.4.1.2 Copiepresse v Google Inc. (Belgium) In this case, Google was found to act as a publisher and as such it was found to be subject to a higher thresshold of liability. Google is appealing the decision: "Today we heard that the Belgian court, which last year ruled against us in the Copiepresse case has reaffirmed its original decision. This judgment is clearly disappointing, and we intend to appeal it because we believe that Google.be and Google News are entirely legal and provide great value and critical information to Internet users. However, we are very pleased that the judge agreed Google should be given notice of articles and other material that content owners want removed. As we have in the past, we will honor all requests to remove such materials." (Google press release)

1.2.3.2.4.1.3 Viacom v YouTube (US) Viacom has launched a lawsuit in the US against YouTube and its owners Google over copyright infringement of audio-visual material owned by Viacom and displayed on the site. The case could test the limits of the 'safe harbor' protections for ISPs and influence other user- generated content sites. If the case goes to trial it is likely to test the limits the Digital Millenium Copyright Act (DCMA) of 1998. Google claims 'safe harbor' status for YouTube, which is a DMCA protection designed for search engines, web hosts and ISPs to shield them against liability for third party copyright infringements. Similar protections exist in European laws. The safe harbor provision protects internet sites from having to monitor the activity of every internet user, which was recognised as impractical. It specifies that sites do not have to prevent illegal use of their services, but when notified they must expeditiously remove the offending material.

1.2.3.2.4.1.4 Tur v YouTube (US) This case also involves the extent to which sites such as YouTube can rely on the DMCA‘s safe harbour provisions. The claimant claimed that as YouTube receives commercial gain for displaying infringing material (such as the clip in question owned by the claimant), it cannot rely on the exemption of the safe harbor provision. There were many complexities to this case at the summary stage and it did not proceed to trial. However, it serves to demonstrate that sites such as YouTube cannot continue to distribute copyright material without challenge and the scope of the safe harbour provisions on which they seek to rely remains uncertain and will depend on judicial interpretation in future cases.

1.2.3.2.4.2 DEFAMATION

1.2.3.2.4.2.1 Godfrey v Demon Internet (UK) Established that ISP's are legally required to remove any infringing material upon notice. See above for discussion.

1.2.3.2.4.2.2 Bunt v Tilley (UK) © Laurence Kaye Solicitors 2007. This handout can be used for non-commercial research or private study by UCL students only. Any commercial or other use needs our prior permission.

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As a matter of law, an internet service provider that performed no more than a passive role in facilitating postings on the internet could not be deemed to be a publisher at common law. The defendant fell within the definition of an "information society service" for the purpose of the 2002 Regulations. The purpose of Reg 18 was to protect internet intermediaries in respect of material for which they were not the primary host but which they stored temporarily on their computer systems for the purpose of enabling the efficient availability of internet material. The facts of the case are that the defendant's storage of relevant material on its web cache was temporary and served to enable more efficient transmission of information to internet users. The claimant claimant sought an injunction but this remedy was found to be disproportionately onerous. It was found that the defendant had not been properly notified and as such it could rely on, s.1 DA 1996 as a defence to any claim relating to the defamatory postings complained of by the claimant.

1.2.3.2.4.2.3 Gina Ford v Mumsnet (UK) See discussion above. Justine Roberts of Mumsnet has asked the DCA to reform the law. She posted the following on her blog for Guardian Unlimited: "Though we don't accept that any of the comments made on Mumsnet were defamatory, we took the decision to settle at least in part because of the distinct lack of clarity about how the defamation law applies to web forums." "Put simply, libel law has not caught up with the digital age. It regards a bulletin board just as it does a newspaper or a book, which is a bit like trying to use a set of railway signals to control the air traffic over Heathrow – the principles may be fine but different forms of communication, just like different forms of transport, require a different approach." "We're not a great big newspaper site with 24-hour access to legal advice...We need some clarity." "In any case, notice and takedown is a pretty poor defence of the principle of free speech since, in practice, sites such as Mumsnet, confronted with a huge volume of daily postings and a defamation law which is open to interpretation, will always remove comments that are complained about, without much regard to their legitimacy. The result is that freedom of expression is being severely curtailed."

1.2.3.2.4.3 TRADE MARK INFRINGEMENT

1.2.3.2.4.3.1 Tiffany v eBay (US) 1.2.3.2.4.3.2 Google Adwords

1.3 CONTENT REGULATIONS 1.3.1 ADVERTISING REGULATIONS

1.3.1.1 CAP Non-Broadcast The following is taken from www.cap.org.uk. The Committee of Advertising Practice (CAP) is the industry body responsible for the UK‘s advertising Codes. CAP‘s Non-broadcast Committee writes and enforces the British Code of Advertising, Sales Promotion and Direct Marketing (the Code). The Committee comprises representatives of advertisers, agencies, media owners and other industry groups, all of which are committed to upholding the highest standards in advertising. What we cover As well as regulating the content of advertisements in print, on posters, in new media and the cinema, we cover all sales promotions, the use of personal data for direct marketing and the delivery of mail order goods or refunds. These are the areas we don‘t cover: 

TV and radio ads (covered by our Broadcast arm)



Claims companies make on their websites

© Laurence Kaye Solicitors 2007. This handout can be used for non-commercial research or private study by UCL students only. Any commercial or other use needs our prior permission.

Page 15 October 2007



Flyposting



The contents of premium rate services and phone lines



Most ads that originate outside the UK



Private classified ads



Private correspondence (such as letters between companies and their customers)



Telephone selling



Editorial content (such as books or newspaper articles)



Regular competitions such as crosswords



Packaging, tickets, timetables and price lists

The Code The Code lays down rules for advertisers to follow. They state that advertising should not mislead or offend and they cover a range of general subjects such as privacy, prices and availability. The Code contains specific rules that cover advertising to children and ads for alcohol, motoring, health, beauty, slimming, financial products and employment and business opportunities.

1.3.1.2 The Control of Misleading Advertisements (Amendment) Regulations 2000 4A - Comparative Advertisements (1) A comparative advertisement shall, as far as the comparison is concerned, be permitted only when the following conditions are met: (a) it is not misleading; (b) it compares goods or services meeting the same needs or intended for the same purpose; (c) it objectively compares one or more material, relevant, verifiable and representative features of those goods and services, which may include price; (d) it does not create confusion in the market place between the advertiser and a competitor or between the advertiser's trade marks, trade names, other distinguishing marks, goods or services and those of a competitor; (e) it does not discredit or denigrate the trade marks, trade names, other distinguishing marks, goods, services, activities, or circumstances of a competitor; (f) for products with designation of origin, it relates in each case to products with the same designation; (g) it does not take unfair advantage of the reputation of a trade mark, trade name or other distinguishing marks of a competitor or of the designation of origin of competing products; (h) it does not present goods or services as imitations or replicas of goods or services bearing a protected trade mark or trade name. (2) In the case of a comparative advertisement referring to a special offer, such an advertisement is not permitted unless it indicates in a clear and unequivocal way the date on which the offer ends or, where appropriate, that the special offer is subject to the availability of the goods and services, and, where the special offer has not yet begun, the date of the start of the period during which the special price or other specific conditions shall apply.

1.3.1.3 Consumer Protection Act 1987 Part III deals with "misleading price indications."

1.3.2 DATA Data becomes increasingly important: Web 2.0 is all about new communication mediums This leads to aventurous advertising methods and more potential for advertising exposure/revenues Advertising, marketing, spam, viral marketing, etc...all place value on data. Data is the driving force for Web 2.0 because it's how money is made. © Laurence Kaye Solicitors 2007. This handout can be used for non-commercial research or private study by UCL students only. Any commercial or other use needs our prior permission.

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1.3.2.1 Data Protection The Data Protection Act 1998 regulates the way in which personal data can be collected, held, processed, sold, and controlled. It applies to all companies which collect personal data, and is particularly important in the online environment. Databases are protected by copyright and database right. This means that they are valuable, particularly for marketing purposes. As the major driver of economic growth in the online world is advertising, the value in databases is apparent. However, internet users need to be protected from unscrupulus use of their personal data for reasons ranging from the annoyance of unsolicited marketing (spam) to the more serious concern of identity fraud. The Data Protection Act provides such protection. It ensures that any entities controlling or processing personal data must register with the Information Commissioner's office and abide by eight principles regarding their use of such data. Every website through which personal data will pass should have a privacy policy in order to inform users of what will happen to their personal data. For certain uses, for example, selling the data on to third parties, the website owner is restricted from such use without the user's express consent. This is known as "opt-in."

1.3.2.1.1 Data Protection Principles Schedule 1, Part I DPA The principles 1 Personal data shall be processed fairly and lawfully and, in particular, shall not be processed unless— (a) at least one of the conditions in Schedule 2 is met, and (b) in the case of sensitive personal data, at least one of the conditions in Schedule 3 is also met. 2 Personal data shall be obtained only for one or more specified and lawful purposes, and shall not be further processed in any manner incompatible with that purpose or those purposes. 3 Personal data shall be adequate, relevant and not excessive in relation to the purpose or purposes for which they are processed. 4 Personal data shall be accurate and, where necessary, kept up to date. 5 Personal data processed for any purpose or purposes shall not be kept for longer than is necessary for that purpose or those purposes. 6 Personal data shall be processed in accordance with the rights of data subjects under this Act. 7 Appropriate technical and organisational measures shall be taken against unauthorised or unlawful processing of personal data and against accidental loss or destruction of, or damage to, personal data. 8 Personal data shall not be transferred to a country or territory outside the European Economic Area unless that country or territory ensures an adequate level of protection for the rights and freedoms of data subjects in relation to the processing of personal data.

1.3.2.1.2 Direct Marketing The CAP Code for Non-Broadcast communications supplements the DPA 1998. Data owners/controllers must take particular care in relation to direct marketing. 43.4 of the CAP Code provides that the explicit consent of consumers is required before: a) processing sensitive personal data, including information on racial or ethnic origin, political opinion or religious or other similar beliefs, trade union membership, physical or mental health, sex life or any criminal record or allegation of criminal activity b) sending marketing communications by fax. Explicit consent is not required when marketing by fax to corporate subscribers (see 1.3j), though marketers must comply with 43.2d in particular and, if necessary, run their databases against the fax data file.

© Laurence Kaye Solicitors 2007. This handout can be used for non-commercial research or private study by UCL students only. Any commercial or other use needs our prior permission.

Page 17 October 2007

c) sending marketing communications by e-mail or to mobile devices, save that marketers may send unsolicited marketing about their similar products to those whose details they have obtained in the course of, or in negotiations for, a sale. They should, however, tell them they may opt- out of future marketing both when they collect the data and on each occasion they send out marketing communications and should give them a simple means to do so. Explicit consent is not required when marketing business products to corporate subscribers (see 1.3j), including to their named employees d) sending non-live-sound marketing communications by automated calling systems.

1.3.2.2 "Sui Generis" Database Right 1.3.2.2.1 Copyright and Rights in Database Regulations (IS 1997/3032) Database right 13. - (1) A property right ("database right") subsists, in accordance with this Part, in a database if there has been a substantial investment in obtaining, verifying or presenting the contents of the database. (2) For the purposes of paragraph (1) it is immaterial whether or not the database or any of its contents is a copyright work, within the meaning of Part I of the 1988 Act. (3) This Regulation has effect subject to Regulation 18. Acts infringing database right 16. - (1) Subject to the provisions of this Part, a person infringes database right in a database if, without the consent of the owner of the right, he extracts or re- utilises all or a substantial part of the contents of the database. (2) For the purposes of this Part, the repeated and systematic extraction or re- utilisation of insubstantial parts of the contents of a database may amount to the extraction or re-utilisation of a substantial part of those contents. Term of protection 17. - (1) Database right in a database expires at the end of the period of fifteen years from the end of the calendar year in which the making of the database was completed.

1.3.2.2.2 Database Directive 96/9 1.3.2.2.3 British Horseracing Board v William Hill 1.3.3 AUDIO-VISUAL MEDIA SERVICES DIRECTIVE Extends the Television Without Frontiers Directive to include on-demand services. However, it expressly excludes UGC

1.4 BRANDS 1.4.1 DOMAIN NAMES

1.4.1.1 Nominet Registration Nominet is the UK registration body for domain names. Below is the advice provided on nominet.org.uk regarding domain name disputes: "The law on trade mark infringement and domain names was largely settled in 1997 by the well known 'One in a Million' case, and so most litigation since then has ended quickly and routinely with minimal reporting. There is no law which specifically deals with the use of domain names, although many laws to do with trade marks and which control restricted terms (dentists, Olympic rights, red cross and others) can have an effect on the choice of a domain name. The main cases have been based on trade mark law - both registered trade marks and unregistered trade marks (which is also called "passing off")… More generally, the courts have also had to consider the problems of jurisdiction - does a domain name infringe a trade mark in country X just because it can be seen from there - or © Laurence Kaye Solicitors 2007. This handout can be used for non-commercial research or private study by UCL students only. Any commercial or other use needs our prior permission.

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does the use have to be aimed there? The content of a website can be relevant in deciding whether a .uk registration is "abusive" under the Dispute Resolution Service, but the content of a website is generally a separate matter from the domain name. The principle that an Internet Service Provider can be liable for content held on their servers was established in the Godfrey v Demon case, but recent changes in the law have largely replaced this case with provisions on the ECommerce Regulations providing the so called "mere conduit" protection for ISPs. Certainly the fact that a website may have 'questionable' content of some sort does not generally allow the domain name to be suspended, but there is guidance available if you are in this situation."

1.4.1.2 Cybersquatting Here below is a link to a BBC news article from 2007 detailing the well-known case against a cybersquatter in relation to www.manchesterunitedfc.com: http://news.bbc.co.uk/1/hi/uk/652062.stm

1.4.1.3 Typosquatting This is where a person registers a domain name which is very similar to an existing brand name. The owner of the typosquatting site relies on advertising revenues made by visitors mistakenly visiting the site, intending to visit the brand name site.

1.4.2 TRADE MARKS Trade marks are important in establishing a strong brand and associated goodwill. This is particularly important in the context of online ecommerce and publishing as this is where value is added to an enterprise.

1.4.3 PASSING OFF The tort of passing off is an action under which anybody with an established but unregistered trade name or logo can protect the brand image.

1.4.4 PATENTS

1.5 DIGITAL RIGHTS MANAGEMENT 1.5.1 DRM Here follows an article written by Laurie Kaye on ―The UK Legal Framework for Digital Rights Management.‖ INTRODUCTION This article uses terminology which is consistent with copyright law. That is: 

―Technological Measures‖ (or ―TPMs‖ for short) – to mean hardware and/or software which control access and use of works e.g. embedded in Windows Media Audio.



―Rights Management information‖ – to mean information which expresses permissions attaching to content which machines can read. This may be used with or without TPMs.



―DRM‖ – to mean both.

QUESTION 1: WHICH LAWS APPLY? This is really three questions: 

Which individual laws apply?



Whose laws apply, bearing in mind the global nature of the medium, at least as far as online distribution is concerned.1



Which country‘s courts have jurisdiction to hear a dispute about illegal content?

This Note will focus on the first of those three questions i.e. ―which laws‖ and will assume that UK law is the applicable law and that the UK Courts have jurisdiction. © Laurence Kaye Solicitors 2007. This handout can be used for non-commercial research or private study by UCL students only. Any commercial or other use needs our prior permission.

Page 19 October 2007

Before looking at the individual laws, it is important to make some remarks about ‗hard law‘ and ‗soft law‘. ‗Hard law‘ is statute law and common law developed by the Courts. But in the area of digital media and internet law, ‗soft law‘ is of growing importance. This includes standards and voluntary codes of conduct e.g. Mobile Content Code of Conduct. And there is a relationship between the two. For example, the E-Commerce Regulations and IFRED both encourage their use. ‗Hard law‘: This is primarily, but not exclusively, Copyright law. To set the scene properly, it is important to point out other relevant legal areas which make up the overall framework. 

Privacy law, particularly Data Protection law e.g. where a DRM involves user identification or authentication.



―E-Commerce Law‖.



Consumer protection law.



Content regulation in the broad sense beyond copyright.

In almost all cases, the laws in these areas stem from EU Directives. In the case of copyright, UK copyright law fits within a supra national legal framework including the Berne Convention on Copyright, administered by the World Intellectual Property Organisation (―WIPO‖). UK statutory Copyright law is found in the Copyright, Designs & Patents Act 1988, as [relatively] recently amended by The Copyright and Related Rights Regulations 2003 (SI 2003 No. 2498). This is collectively referred to this as the ‗Copyright Act‘. These Regulations implemented the EU Copyright Directive6 which, in turn, was required to enable Member States to comply with their obligations under the WIPO Copyright Treaty of 1996. In a nutshell, these changes were designed to streamline copyright for the digital age. Whether this has been achieved largely depends on one‘s perspective. But one thing remains constant: copyright has always been a balance of rights and exceptions and limitations. So every new legal instrument in the copyright field involves a re-negotiation of that balance between all the stakeholders. It is therefore no surprise that the resulting legal instruments are full of compromises. QUESTION 2: HOW COPYRIGHT WORKS – WHAT RIGHTS COPYRIGHT OWNERS GET In essence, copyright confers certain exclusive rights on the owners of copyright works. Exceptions are not rights per se, but they are the focus of the public interest in the copyright field. We will look first at rights, then at exceptions, then summarise the DRM-related provisions and finally look at the relationship between those DRM provisions and exceptions. Rights First, three preliminary points: 

There must be a ‗copyright work‘ i.e. as defined e.g. song, artistic work, book, audio recording, film, database, software etc).



It must qualify for protection e.g. by virtue of country of publication or residence of the author.



It must be within the term of copyright – public domain works fall outside copyright protection.

The owner of a copyright work has the right to do, or to authorise someone else to do, certain things in relation to that copyright work. (The Act uses the somewhat archaic term of ‗restricted act‘). The copyright owner is the author, the author‘s employer if the work is produced in the course of employment or a successor in title by transfer or licence. In addition to economic rights (e.g. to control copying), an author has certain non-economic rights – moral rights – too. These are outside the scope of this short presentation but they can be relevant in the field of DRM. For example, the author has the rights of paternity, to assert his or her right as author. So tampering with Rights Management Information could infringe that right as well. In the context of DRM, there are two key rights conferred by copyright law, both of which were harmonised by the Copyright Directive in a ‗technologically neutral‘ way: 

―Copying‖

© Laurence Kaye Solicitors 2007. This handout can be used for non-commercial research or private study by UCL students only. Any commercial or other use needs our prior permission.

Page 20 October 2007



―Communication to the Public‖

―Copying‖ covers all forms of copying - analogue to analogue, digital to digital, analogue to digital and digital to analogue. So copying a copyright work from one digital device to another is ―copying‖ (e.g. PC to MP3 player); so is copying from a digital device such as an optical CD to an analogue tape or from a mobile phone to a PC or to an MP3 player. ―Communication to the public‖: ―Broadcast‖ means ‗one to many‘/or push‘ where a copyright work is broadcast for ―simultaneous reception or where the ―broadcaster‖ determines the time of transmission‖. This includes ‗Free to Air broadcast‘, Webcast, and Podcast. ―Making available‖ is ‗one to one‘ or ‘pull. That is, the ―making available to the public of the work by electronic transmission in such a way that members of the public may access it from a place and at a time individually chosen by them‖. This covers the typical on- demand service. Copyright infringement therefore occurs where any of these acts are done without authority and no exception applies. QUESTION 3: HOW COPYRIGHT WORKS – EXCEPTIONS The EU Copyright Directive fudged the issue of harmonising Member States‘ exceptions – it was just too difficult. As a result, it provided only one mandatory exception – in Article 5 (1) for machine- generated ‗temporary copies‘ as copyright material is carried through electronic communications networks. The Directive then provided for 20 optional exceptions, which allowed Member States to retain their traditional exceptions. That is what we did in the UK. Apart from incorporating the ‗Article 5.1 exception‘ as a new section 28A of the Copyright Act, we retained our existing exceptions. The Regulations did make certain changes to those exceptions to bring them into line with the EU Directive. For example, our ‗fair dealing‘ exception for research and private study continues to apply as long as it is for a noncommercial purpose. A similar amendment was made to exception that applies to things done for the purpose of instruction or examination. Exceptions in the Copyright Act occupy sections 28 – 76 inclusive. In addition to the ‗fair dealing‘ exceptions for research and private study and for criticism, review and news reporting, there are a range of other exceptions permitting particular acts for specific purposes, including those in the fields of education, libraries and archives, public administration and others.7 The Copyright Act does not contain, and has never contained an exception for private copying corresponding to that contained in many Continental European countries, along with accompanying levies. 8 By ‗private copying‘,we mean, for example, where a consumer copies a sound recording for private use from PC to CD – ‗ripping and burning‘ – or to analogue tape in order to play in the car or from PC to MP3 player. The Act does contain a ‗time shifting‘ exception which applies to ―..making in domestic premises for private and domestic use of a recording of a broadcast solely for the purpose of enabling it to be viewed or listened to at a more convenient time.‘ Although, as noted earlier, ‗broadcast‘ now has an extended, technology neutral definition to include, for example webcasts and podcasts, it does not apply to copying from one fixed device to another. QUESTION 4: IN WHAT CIRCUMSTANCES CAN CONSUMERS BE PROSECUTED FOR COPYING DISKS IN THEIR CARS? We have already observed that there is no ‗private copying‘ exception in the Copyright Act in the sense defined in Article 5. 2 (b) of the Copyright Directive. So if you as a consumer buy a copyright work recorded on a physical digital product – or analogue for that matter – you do not acquire any ‗inbuilt‘ rights to copy. You can, of course, lend, give away or sell the object on e-bay. That means that, technically, private copying, if done without authority, is an infringement of copyright. This is a tort on which a civil action can be brought. It is not a criminal offence. As far as I am aware, no legal proceedings have ever been taken in the UK for unauthorised private copying by a consumer.

© Laurence Kaye Solicitors 2007. This handout can be used for non-commercial research or private study by UCL students only. Any commercial or other use needs our prior permission.

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It is very important to draw a clear distinction between ‗private copying‘ and illegal file sharing. The legal actions taken in the UK in respect of illegal file sharing have focused on the unauthorised uploading of copyright material for illegal file sharing purposes, in breach of the ‗making available‘ right QUESTION 5: HOW DOES DRM FIT IN? The provisions in the UK Copyright Act have been inserted in compliance with the corresponding provisions in the WIPO Copyright Treaty and the EU Copyright Directive. In fact, the 1988 Copyright Act had anti- circumvention provisions, but they applied only to computer software. Before going into the detail, it is important to look at the definitions9: ―Technological measures‖ are broadly defined to cover hardware and software – ―any technology, device or component which is designed, in the normal course of its operation, to protect a copyright work other than a computer program.‖ Such measures are only ―effective‖ ―…if the use of the work is controlled by the copyright owner through – (a) an access control or protection process such as encryption, scrambling or other transformation of the work; or (b) a copy control mechanism which achieves the intended protection. So, for the anti-circumvention provision to apply, the TPM has to work, although it is not clear how secure the TPM has to be in order to be ‗effective‘. A Court will have to decide whether, as a matter of fact, the TPM functions as an access control or protection process. If it does not, it seems unlikely to be an ―effective technological measure‘.10 A related issue is the effect, if any, of a TPM used without any notice or warning of its existence e.g. rootkit software. Time does not allow a detailed analysis but it raises privacy and consumer protection law concerns. Section 296ZA prohibits the circumvention of effective technological measures by a person ‗knowing, or having reasonable grounds to know, that he is pursuing that objective. So, for example, if a consumer runs a software program or uses a hardware device in order to access and copy an encrypted work, that consumer is treated as a copyright infringer which could give rise to a civil action for copyright infringement. The consumer is not criminalised. Section 296ZD also gives the copyright owner the right to bring an action for copyright infringement against anyone who manufactures or supplies any device, product or component:

is promoted etc. for the purpose of circumvention of effective technological measures;



has only limited commercially significant purpose or use other than to circumvent effective technological measures; or



is primarily designed, produced or adapted or performed for the purpose of enabling or facilitating the circumvention of effective technological measures.

Section 296ZB makes it a criminal offence , carrying a maximum prison term of 3 months on summary conviction or 2 years on indictment and/or a fine, to manufacture etc. any device, product or component, or provide services, which is primarily designed, produced, or adapted for the purpose of enabling or facilitating the circumvention of effective technological measures. These anti-circumvention provisions are designed only to apply to acts (e.g. copying) which are done without the owner‘s authority and would be a copyright infringement. Also, they do not apply to the use of the work which is outside the scope of the acts restricted by copyright. 12 As regards Rights Management Information, Section 296ZG provides remedies where electronic rights management information is removed by someone who knows or has reason to believe that by doing so he is enabling, facilitating or concealing an infringement of copyright. There have been two cases relating to the legality of mod chips, both decided under the old S. 296. These are, in effect, anti- circumvention devices in the form of a computer chip which can be used to modify a games console so that it is instructed to accept any CD- ROM, irrespective of the access code, thereby overriding the console‘s programming.13 There has been one case in the UK dealing with these provisions, in July 2004, again involving Sony. QUESTION 5: WHAT IS THE LEGAL RELATIONSHIP BETWEEN DRM AND EXCEPTIONS? © Laurence Kaye Solicitors 2007. This handout can be used for non-commercial research or private study by UCL students only. Any commercial or other use needs our prior permission.

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The Copyright Act, following the EC Directive, provides a mechanism to ensure that a TPM is ‗lifted‘ so that a person cannot be prevented from carrying out a permitted act i.e. any of the copyright exceptions listed in Schedule 5A of the Act, such as research and private study. Section 296ZE deals with the situation where a copyright work is protected by a TPM, and the rightsholder does not provide a voluntary measure to ‗lift‘ the TPM (e.g. by allowing access to an unencrypted copy via a trusted third party), to permit a person to access and use the work for the permitted exception. In that event, the person (or a class of persons) can implement the procedure in Section 296ZE which is triggered by issuing a notice of complaint to the Secretary of State. This can lead to a compulsory ‗lifting‘ of the TPM. For example, a library or group of libraries might seek to implement this procedure if rights holders failed to take voluntary steps to enable them to exercise library exceptions in respect of a TPM-protected work. These provisions do not apply to copyright works which are made available on agreed contractual terms (Section 296ZE 9). These provisions are not relevant to private copying because there is no private copying exception provision in the Copyright Act. A final word about the US DMCA and fair use15. We are not experts in US law. Our understanding is that there is no clear view as to whether the fair use doctrine is available as a defence to charges arising under the anticircumvention provisions of the DMCA on the grounds that circumvention of a TPM may be necessary to accomplish a fair use. QUESTION 6: IPRED/IPRED2 – HOW DO THEY IMPACT?16 IPRED 1 and 2 originate from Part III of the 1993 Trade Related Aspects of Intellectual Property Rights (―TRIPS Agreement‖) which requires that there are effective, preventative and deterrent remedies against the infringement of IP rights. The Directive on the enforcement of intellectual property rights (IPRED 1) was adopted on 26 April 2004 and member states are required to implement it by 29 April 2006. Draft regulations implementing IPRED 1 have been issued. The Commission originally intended to include criminal sanctions within IPRED 1 but these were rejected. A proposal for a Directive dealing with criminal measures (known as IPRED 2) has been published and is currently being considered. The intention of IPRED 1 and IPRED 2 is to combat infringement of IP rights by harmonising enforcement and remedies thoughout the EU. The impact of IPRED 1 should not be over exaggerated. Much of IPRED 1 is already dealt with by English law and therefore its additional effect here will be limited to specific changes to the rights and remedies of representative organisations and some minor changes including to the Civil Procedure Rules (eg publication and dissemination of judgements). IPRED 2 consists of the original Article 20 from IPRED 1 (which was removed prior to its adoption) and aims to criminalise infringements of those IP rights covered by IPRED 1. Under Article 3, for an infringement to be a criminal offence, the infringer has to have the ―requisite intention‖. In addition, it will only be a criminal offence where the act of infringement has been carried out on a ―commercial scale‖. Whether or not infringement is carried out on a ―commercial scale‖ may be difficult to determine. Finally it will be an offence to attempt, aid or abet and incite acts of infringement. The Copyright Act already includes criminal sanctions for making or dealing with infringing articles, infringement by communication to the public, making or dealing with illicit recordings and devices and services designed to circumvent effective technological measures. In addition it is also an offence to provide, promote, advertise or market a service to enable or facilitate the circumvention of effective TMs. These offences largely require the iinfringement to be in the course of a business although certain on the offences can be commited otherwise than in the course of a business to such an extent as to affect prejudicially the copyright owner. Certain offences are punishable with up to 6 months imprisonment and/or a maximum £5000 fine on summary conviction and a maximum of 10 years imprisonment and/or an unlimited fine on indictment. IPRED 2 goes further than this, criminalising all IP infringement under IPRED 1 and widening the scope to attempting, aiding, abetting and inciting.

1.5.1.1 TPM 1.5.1.1.1 Circumvention © Laurence Kaye Solicitors 2007. This handout can be used for non-commercial research or private study by UCL students only. Any commercial or other use needs our prior permission.

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1.5.1.2 Rights Management Information 1.5.2 STANDARDS

1.5.2.1 ACAP 1.6 IS COPYRIGHT STILL RELEVANT IN THE DIGITAL AGE? 1.6.1 COPYRIGHT "PAST THE HIGH WATERMARK" Copyright under attack 

Search engines: fair use; ‗opt out‘ v. ‗opt in‘.

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EU Digital Libraries (digitisation, preservation and access)

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UK – Legal Deposit

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‗Open access‘

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Creative Commons

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Copyright + DRM = lock-up

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APIG

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Gower

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Dilution of database right

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EU Proposals to consolidate (widen exceptions?)

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Levies under attack

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Orphan works

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PC exception in UK

Options 

‗King Canute‘ strategy

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> 21st century rights management

21st century rights management 

Principles

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Execution

Principles 

Copyright is crucial

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‗Fair for all, not free for all‘

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Responsible copyright

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Stable framework

Strategy 

High level messages

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Focus on execution

Execution 

Labelling

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Fair contract terms

© Laurence Kaye Solicitors 2007. This handout can be used for non-commercial research or private study by UCL students only. Any commercial or other use needs our prior permission.

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

Search engines and machine to machine



See Gower responses

1.6.2 BOOKSELLER ARTICLE – ―Searching for the Future‖ On paper, the future for book looks good. The tactile experience of book reading is hard to replace. So it‘s tempting to look at the trade publishing world today and, compared with the music industry, to take a fairly relaxed view about the threat to book sales posed by downloadable works. Although there are a variety of eBook readers, including Microsoft‘s e-reader, MobiPocket, Adobe Reader and Iliad, e-Books have not yet taken off. In fact, the Internet is proving to be an excellent channel to market for the sale of the physical book. Google‘s ‗Partner Programme‘ (part of its Book Search project) and Microsoft‘s ‗Live Search‘ use the power of the search engine to connect publishers and consumers, leading to increased sales of physical books and even incremental benefits such as a share of advertising revenues. Amazon‘s ‗Search Inside‘ offers similar functionality to online buyers. Publishers such as Macmillan and Harper Collins are also developing their own fully searchable content repositories. But if we take a closer look, the picture becomes less clear. Web technologies and the digitalisation of content are fundamentally changing publishers‘ relationships with their authors and customers. Publishers who develop the new marketing, technology and commercial skills needed for the online world can thrive. Those who don‘t adapt will face an increasingly uncertain future. It is not that physical books will disappear. The challenge is to capture the consumers‘ demand for enjoying works in new ways. There are two forces driving this change. First, the availability of the digital file from a multitude of sources diminishes publishers‘ traditional control over distribution. Second, today‘s consumers expect to be able to ‗search, find, click and consume‘. They want choice as to how they choose to enjoy a work and an increasing number of authors want to be sure that their publishers are able to satisfy that demand. Both of these changes require new strategies on the part of publishers. Google‘s Partner Programme show how this shift in distribution is taking place and to where it can lead. Under the Programme, the publisher either gives Google digital files of its books or print versions for Google – without charge - to scan and digitise the print version. Under its Terms and Conditions, Google agrees to limit the number of pages the end user can see to 20% and to disable the ―right-click‖ cut, copy and paste functions. But Google have recently announced that publishers can choose to allow buyers to pay for access to the full contents immediately. Google invite its publisher partners to ―experiment offering rental and ownership online access models and see how your titles perform without printing, warehouse and shipping costs.‖ Amazon has also announced that as part of its ‗Search Inside‘ programme, authors and publishers can allow customers to view and search every page. It‘s important to emphasise that it is the publisher‘s choice to decide whether to allow Google or Amazon to make full content available and in both cases the work is not downloadable. But as ‗Outsell‘ put it in a recently, ―the distance between Google becoming a publisher and its existing distribution business is a few lines of computer code.‖ Whether Google harbours ambitions to be a publisher is not the real issue. Google and the other search engines are not the only show in Town. Some of the larger publishers are other technology providers are offering alternative Web-enabled services and, potentially, greater control over content. The challenge which publishers face is how to harness the power of the Web to deliver works in whatever forms and formats customers want, whilst ensuring an acceptable return on investment and an appropriate level of content protection. The physical book may remain the primary format – at least in fiction publishing – but other formats are rapidly developing. Dedicated eBook readers will gain in popularity if publishers follow the path of online availability via sale, rental, online viewing or otherwise from their own or third party Web-based digital repositories. Also, new forms of work which exist only in the online world are likely to come into being by authors who have grown up with online communities such as ‗MySpace‘ and ‗Second Life‘. So what does this mean for the traditional author- publisher relationship? I suggest that we need to start with a rethink: the work, not the book, is the centre of the trade publishing universe. The typical author- publisher agreement takes as its starting point the right to publish a book in volume form. Everything else is ancillary or subsidiary to the main right of publishing the work in print on paper form. This is changing. The Web detaches (or, © Laurence Kaye Solicitors 2007. This handout can be used for non-commercial research or private study by UCL students only. Any commercial or other use needs our prior permission.

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if you prefer, liberates) the work from its container. Putting the work and not the book as the publishing hub provides the right framework for 21 st century publishing. th

The excellent 7 Edition of Clark‘s Publishing Agreements reflects this trend by including ‗Electronic Book Rights‘ as part of the main grant of rights to publish in volume form. This is just the beginning. We are likely to see an increasing fragmentation of rights, with authors‘ limiting the scope of rights granted as well as certain authors‘ going direct to online platforms and intermediaries to make their works available in electronic form for viewing and downloading by readers. To meet this challenge, publishers will need to show that have the marketing and distribution skills in the online world to warrant a comprehensive grant of rights by authors. Looking around the publishing industry today, and seeing what some of the large and small publishers are doing, there are four core interrelated skills needed by publishers to succeed in the face of the competition posed by new and potential entrants to the market: (i) a willingness to experiment and innovate; (ii) getting the technology right; (iii) successfully creating and managing new business relationships and (iv) continuing to do what publishers have always done well. Experimentation and innovation comes in many forms. New business models are needed; those applying to the physical book cannot be exported online. This is not just about royalties for new forms of delivery, although royalty rates certainly are an issue. Authors and their agents are looking to their publishers to use search- based marketing and to experiment with new forms of marketing and advertising such as online viral ads and to build or take part in online communities. This all adds up to a revitalisation of the author-publisher relationship which is the cornerstone of the publishing industry. And innovation is not confined to the search engines. For example, take a look at Safari Books Online (http://safari.oreilly.com) and LibreDigital who have just announced a partnership with Bloomsbury (http://www.libredigital.com). Technology is one of the biggest challenges facing publishers today. Especially, for small to medium size publishers, getting to grips with digital asset management and content management systems, XML file structures and RSS feeds is no easy challenge. But whether this is done in-house or is outsourced to a technology partner, the key objective is to ensure that publishers‘ content is structured and held in a form that the work, or modules of the work, can move from its digital repository to whatever format or platform is required without the need for reformatting. Put simply, the technical platform must serve the publisher‘s sales and marketing strategy. Contracts have always been the lifeblood of the publishing industry. But in the Web-based world, new contractbased relationships have emerged. Web-based distribution channels means that the successful negotiation and management of these relationships will be vital. At the heart of those relationships are technology-driven issues such as the pros and cons of using technical protection measures, the role of service level agreements, copyright permissions and control over digital files, especially when the contractual relationship comes to an end. Boundaries between book and e-book will blur as the work moves between bookshelf, print on demand outlet, ereader and website. New skills are needed, but the traditional publishers‘ skills in editorial, building brands and protecting intellectual property remain as important online as they have been in the offline world. Publishers and authors are natural allies when it comes to safeguarding copyright. There are exciting prospects for those publishers who embrace the new whilst blending them with traditional publishing skills. One thing is clear – standing still is not an option.

1.6.3 CORE RIGHTS IN THE DIGITAL AGE

1.6.3.1 Communication to the Public Right 1.6.3.2 Making Available Right 1.6.3.3 Database Right 1.6.4 CHOICE OF LAW AND JURISDICTION ISSUES

1.6.4.1 Terms & conditions of website The terms and conditions will specify a framework of rules to adhere to in using the website. This is a contractual agreement between the user and the website owner. © Laurence Kaye Solicitors 2007. This handout can be used for non-commercial research or private study by UCL students only. Any commercial or other use needs our prior permission.

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1.6.4.2 What country will have jurisdiction to hear the action for damages? 1.6.4.2.1 BRUSSELS I Brussels I determines which courts have jurisdiction over contractual and non-contractual disputes. The court, having established jurisdiction under the Brussels Regulation, must then decide which law shall apply to any dispute under the rules determined in accordance with Rome I (if it is a contractual dispute) or Rome II (if it is a non-contractual dispute).

1.6.4.3 Which country’s law should govern the action? 1.6.4.3.1 ROME I Rome I deals with the law applicable to contracts in cross border disputes. This is not to be confused with Rome II, which deals with the law applicable to non- contractual obligations such as the infringement of intellectual property rights.

1.6.4.3.2 ROME II The ROME II proposal applies in situations involving cross border conflict of laws for non-contractual obligations in civil and commercial matters, including intellectual property rights.

1.6.4.4 How can it be enforced if the defender lives outside the jurisdiction of the court?

© Laurence Kaye Solicitors 2007. This handout can be used for non-commercial research or private study by UCL students only. Any commercial or other use needs our prior permission.